between $800,000,000 and $825,000,000 to European countries, over $50,000,000 to Latin America and from $150,000,000 to $160,000,000 to Canada which includes an estimate of foreign held Canadian bonds resold in the United States. This is certainly a large amount of money for any nation to lend and the ease with which the loans have been absorbed has astonished even those who viewed the situation from the most optimistic angle.

There is now employed in the stock market a large amount of money, some of which has heen placed in "speculative investments," but the bulk of which is being used for gambling, pure and simple. Upon a definite and sustained decline in prices of stocks much of this money would be shaken out and invested in high grade bonds. Furthermore the large accumulation of cash in the hands of investors who were in a position to invest at a level of prices below that which now prevails but did not do so, will be an important influence in checking any tendency toward lower prices on high grade bonds. In fact this very factor has been particularly noticeable in the case of railroad bonds of the best class at every recession.

Prospects for Municipal Bond Market

Prices of municipal bonds have risen steadily until they are now on the average slightly above the July, 1914, level for the highest grade and materially above the then ruling level for "general market municipals"; i. e., bonds not eligible for the closely restricted savings bank and trust fund investments in New York and the New England States or those given an artificial market by valuable tax exemption features which confines their logical absorption within the boundaries of their own States. The agitation by the present administration at Washington for additional revenue from the Federal Income Tax, from the provisions of which municipal bonds are exempt, will probably result in reducing the exemption limit now provided and increasing the super taxes imposed. Already having an important bearing on the market for municipal bonds, the exemption from income taxation, under such revisions, would make its appeal to a much larger number of investors. Everything considered it seems a fairly safe prediction that the course of prices on municipal bonds will continue upwards without regard to the market position of other classes of bonds. American Investors and the Anglo-French Bonds

The recent Anglo-French Loan has given financial observers in this country a fair insight into the attitude of investors throughout this country toward foreign loans, and makes

it considerably easier to estimate what will happen if large European government loans are offered in this country to pay off short term indebtedness now being created on such a tremendous scale and to restore the war area. In comparison with any other form of security the joint and several obligations of two of the oldest and richest nations in the world would seem to be a premier investment and without regard to how the war may terminate it is unthinkable that the bonds will not be paid according to their tenor. With a most liberal net return, a comparatively short maturity, and valuable conversion privilege and with the banks and country bulging with money unprofitably employed, this loan, if any, should have been readily absorbed. The fact that it was not makes it clearly evident that our investors prefer to keep their funds employed at home even at a considerably lower income. Moreover, as now seems likely, if the end of the European war merely marks the beginning of armed truce, foreign government loans, no matter how attractive the terms on which they are offered, will not seriously interfere with high grade domestic financing.

Mr. Oliver C. Fuller Recovers After
Operation

It will be welcome information to the many friends of Mr. Oliver C. Fuller, president of the Wisconsin Trust Company of Milwaukee, that he has passed safely through the ordeal of a serious surgical operation and is rapidly recovering complete health. The latest advice is that Mr. Fuller is in excellent spirits and expects soon to resume his active duties at the Wisconsin Trust Company.

Mr. Fuller has endeared himself to his colaborers in the trust company field because of his whole-hearted devotion to the best interests of the trust company movement. As a former president of the Trust Company Section and member of the Executive Committee, he has contributed freely of his time toward the attainment of the highest ideals in trust company practice and service.

At the recent meeting of the board of directors of this company, following the annual meeting of the stockholders, held on January 13. 1916, the following officers were elected: Oliver C. Fuller, president; Lyman G. Bournique, vice-president; Walter Kasten, vicepresident; Fred C. Best, vice-president and treasurer; Russell L. Smith, secretary; Douglas F. McKey, assistant secretary; Clyde H. Fuller, assistant secretary.

The year that has just closed has been a disastrous one for financial prophets. Viewing the wrecks of reputations which abound, one would be most rash who would assume to predict for the year 1916 anything regarding money rates, exchange or bond prices. New conditions exist, new forces are at work, new elements must be considered which the economists have never before had to take into account in their calculations and the resultant of which no one can forecast with any accuracy because historical precedent, the universal reliance, here utterly fails.

The loaning of money reverses ordinary commercial transactions. In trade the cost of goods usually and most largely determines the selling price and the manufacturer or dealer pretty closely knows his costs before he agrees on the price of his goods. The lender of money looks forward rather than backward to a known cost. If it be a broker's demand loan the price is fixed for one day ahead. If a thirty or sixty day or four months' loan be made or commercial paper be discounted the price is agreed on for that length of time in advance. If bonds are bought, the interest is in effect determined for the life of the bond, be it five or fifty years. This is why the study of interest rates is so intensely interesting to the banker. It is always a forecast, not a review; but a forecast which is made upon history and if history fails, then by what shall we determine the future?

Why Precedent Offers No Solution The financial writers are making the best possible use of history, but can the conditions prevailing in the United States after the war between the States be quoted as any parallel to the present financial position in which are now the greatest nations of the earth? Even the time of the Napoleonic wars, and the following years, most widely cited as offering the nearest parallel to present conditions and to those which shall prevail when peace shall be declared, has so many and so great differences in economic conditions-a century has seen such tremendous

advance in international financial relations and especially in the position of the United States in respect to Europe-that that time even can hardly be used for comparison in this consideration. The utmost one can do is to draw attention to a few of the most significant facts and leave to the reader his own inference as to their later effect.

Rates Will be Influenced by Foreign Capital

Demands

First, it must be assumed that Europe for a long time will be absolutely closed to us as a field for placing investment issues; that all American enterprises must be entirely financed at home. Further that the inhibition which now exists in Great Britain against foreign investment will long continue in force, if not legally, yet sentimentally, and therefore that foreign nations, especially in this hemisphere, which have heretofore found a ready market for their government and other obligations in London will be compelled to seek a market here. The same must be true in respect to Paris, Berlin and perhaps Amsterdam.

necessary.

Again the numerous purchases of munitions in this country have been heretofore paid for in such manner as to largely finance the concerns manufacturing them, not only in respect to the quick capital required, but also considerably for the additions to plants, for new machinery, etc., which such excessive orders made This has taken from the banks of this country what otherwise would have been a considerable burden or a large loaning opportunity as it might be considered. Yet, if these munitions orders shall continue to be placed in this country in large amount it can hardly be expected that the same method of pre-payment will continue or, if it does, it will probably be much more through funds furnished in this country by subscriptions to loans and in other ways, so transferring the commercial debits to the banks. Further, after the ending of the war, whenever that may be, National bond issues in Europe are likely to be made at rates so attractive and security so