and may be accomplished, provided there is the proper degree of cooperation on the part of the stock-exchange interests, our bankers and our corporations. We must bear in mind that our stock exchanges are working on a basis of minimum prices. We have already seen, in a modified form, the efficacy of this device. A heavy selling movement will force a stock down to the minimum price, as, for example, was the case on several occasions with Steel common. When this occurs, selling ceases or must be limited to the ability of the market to absorb the stock at the minimum price. In other words, the buying movement determines the amount which shall be sold. The seller can not offer his stock at lower prices and force the financial interests, in self defence, to purchase. It is altogether likely that minimum prices will continue to be readjusted, some advanced and others lowered. The existence of minimum prices will be of the greatest advantage in controlling unwelcome liquidation. Should additional checks be found necessary they can be speedily devised and applied. Stock exchange members could be required, for example, to guarantee that securities sold by them are not for the account of citizens of belligerent nations, that at the time of sale the brokers actually possess or control the securities (which can be made effective by requiring the broker to give the numbers of the stock certificates or the bonds at the time of the sale). Most of these devices are successfully used in London.
When it becomes certain, as it should speedily appear, that the fear of uncontrollable liquidation of American securities is groundless, so long as we manage our affairs with intelligence, the investment situation in this country will rapidly improve. It is idle to presume that the amount of money available for investment in new issues of American securities will be as great as heretofore. It is altogether likely that the amount of European capital in this country, entirely aside from the resale of securities to us, will markedly decrease. It is estimated that the outstanding funded obligations of the leading railway and industrial corporations of this country that must be met at various dates throughout the next three years are $1,241,573,536, of which $764,424,289, or more than one half, is due in 1915. Our first task is to make provision for refunding or extending these maturing obligations. A certain percentage—no one seems to know how much, although the percentage is probably comparatively small—is held by foreign investors. It is altogether likely that part of the liquidation, so much feared, will consist in a demand for the repayment of these obligations as they mature. Most of them were sold at a price below par. The issuing corporations are obliged to redeem them at par. It is obviously more advantageous, to demand the payment of these securities at par than to sell us other securities at prices much below par. We have already seen something of the working out of this proposition in the recent refunding of the City of New York's obligations, where this tendency was strikingly apparent.
