The Sunday Oregonian., December 02, 1917, SECTION FIVE, Page 4, Image 66

THE SUNDAY OREGONIAX, PORTLAND, DECEMBER 2, 1917.
WILL NEW YORK OR LONDON DOMINATE FINANCIAL WORLD?
Free Trade and Heavier Scheme of Direct Taxation "Necessary Says Sydney Brooks,
If English Center Is to Retain Its Former Position Against Wealth of Wall Street
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The Unbeatable Game" Scene on the New York Stock Exchange During
the Height of a Lively Trading Hour.
BT STDNTTT BROOKS. .
LONDON. Nov. 17. Will London
after the war continue to be the
center and clearing-house of the
world's finance? Will a bill on London
remain as it was, the foremost instru
ment of international trade? Will the
London Stock Exchange end the war as
It began it. "the biggept bourse on
earth? Or is London destined to see its
trreat position pass away and to yield
its old- supremacy to New York?
Questions such as these are crossing
the mind of every Englishman, whether
lie is "in the city" or a mere onlooker
at the financial game. They admit, of
course, at present of nothing but spec
ulative answers.- Before attempting- a
precise solution of these and similar
riddles one would have to know not
only the date of the peace,' but its
character. None the less, it is worth
while setting forth some of the rea
sons why good judges in England look
forward to the after-war conditions
without any great dismay. They be- I
lieve that London will survive with its
power and prestige relatively undimin
ished. .
Look at the map and you will see
that the capital of England, situated
near the mouth of the Thames, adapted,
therefore, for commerce with ail the
northern ports of Europe, was almost
bound to be the center of the Western
trading world. Nature and history em
phasized its advantages. While the
Continent was distracted with wars,
while America was still undeveloped
and Asia still dreamed, - Great Britain
enjoyed an insular and inviolable se
curity. Her great wealth of coal and
Iron put her at the head of the indus
trial revolution that began In the lat
ter half of the 18th century. Her ship
ping and manufactures towered over
all rivals. In banking and the use of
credit and capital and in understand
ing of the problems of currency she
Was easily the first nation In the world.
But 60-odd years ago her ascendancy
was threatened from two quarters.
France was a formidable competitor
in finance and the United States
in shipping. But three great events
warded off the menace to British su
premacy. First, England adopted the
policy of a free market for gold and
all commodities, and her trade went
forward in a succession of huge leaps.
Secondly, the Civil War broke out in
the United States, and when it was
over America went in for a fiscal sys
tem which disabled her manufacturers
from competing in neutral markets and
dealt an almost fatal blow at the Amer
ican merchant marine. Thirdly, during
the Franco-Prussian War the Bank of
France suspended specie payments and
so lost its position as a European set
tling house.
"Thus by a concurrence of natural
and fortuitous circumstances with the
restrictive and artificial regulations
Imposed by potential rivals, the num
ber of international bills drawn on
London incalculably ' surpasses those
drawn upon other centers. It is the
greatest shop, 'the greatest store, the
freest market for commodities, gold
and securities, the greatest dispenser
of credit, but above and beyond, as well
as by reason of all these marks of
financial and commercial supremacy,
it is the world's cleat-ing-house." So
wrote F. W. Hirst, a careful and any
thing but a flamboyant economist, a
year or two before the war. Will he
or anyone else be able to write again
of London in the same strain when the
war ends?
"Pnraxites" on 'Change.
It was. of course. London's position
as bullion broker and arbiter of credit
. and lender" and exporter of capital that
made the London Stock Exchange the
leading market in foreign securities
As such it had and still has no rival.
There is hardly a country, from the
gilt-edge rentes of France to the paper
of Honduras, -whose stocks before the
war were not dealt in freely day after
day in London. Backed by the sound
est currency and banking system in
tiie world, incomparably the most
catholic and cosmopolitan counter for
the buying and selling of stocks and
employing a high reputation for integ
rity, coolness and common sense, the
London Stock Exchange, in August,
1914. was still the chief of bourses.
Yet long before the war those who
were in close touch with its atmos
phere and workings were aware that
all was not well witn it. it was be
coming more and more difficult for
the small man to make a living. Far
too large a proportion of the members
of the exchange were mere parasites.
the products of the "booms," but not
always disappearing with them. An
enormous number of transactions for
merly the monopoly of London were
being conducted through financial ex
changes or by .outside firms or by
banks and insurance companies.
Host of the' big business in the few
booms that occurred in the decade pre
ceding the war was done outside the
house altogether. The public was show
ing an increasing disinclination to use
the services of the London Stock Ex
change. This was very clearly proved
when the Dalit Mail started in 1912 an
exchange of its own. on terms that
were much more favorable to its clients
than any that could have been had
through a regular broker, ran it with
extraordinary success and in the first
four months of its existence booked
over 10.000 orders.
Where lay the trouble? The root of
It, in my judgment, lay in the distinc
tion which is still preserved between
the broker and the jobber. No other
exchange in the world maintains this
distinction. On every other bourse in
the English provinces or abroad the
member who receives the order to buy
or sell is the member who deals with
the actual seller or buyer without the
machinery of the Jobber.
Contracted Markets.
But on the London Stock .Exchange
the public has access only to the
broker, just as a would-be litigant In
England has access only to a solicitor
and not to the barrister who will argue
his case in - court, and no broker is
allowed, to deal with the clients of an
other. When he has received, how
ever, an order from a client who has
been properly introduced the broker
calls in the Jobber to assist in its ex
ecution, the latter's function is to buy
stock from or sell stock to the broker
at prices leaving himself a margin of
profit.
Two persons thus do the work that
everywhere else is done by one, and
each of them is paid for his services
out of the public's pocket. Inevitably
their respective operations from time
to time overlap or are in conflict. Thus
a broker with .several orders in a se
curity could and did usurp the jobber's
privilege of making prices, and the
Jobber frequently ignored the broker
and traded direct with an outside
house or a provincial exchange. Hence,
of course, recurrent outbursts of wran
gling and jealousy.
Now the London Stock Exchange is
something of a club, something of a
corporation and something of a trade
union. Its committee naturally desires
to keep the peace among the members
and to see that neither the brokers nor
the jobbers encroach on one another's
sphere. To this end they framed a
variety of rules and regulations a year
or two before the war broke out.' Os
tensibly, of course, the new rules were
introduced for the better protection of
the public, but their real intention
was to adjust the- proportion of busi
ness more equitably between broker
and jobber and thus run another fence
round the London Stock Exchange preserve.
What has been their effect? Their
effect has been to drive business away
and to make it more expensive to the
public. Under the pretext of distribut-
ng trading as widely as possible they
have discouraged it. Markets which
formerly were free have become nar
row and contracted, and in some se
curities have virtually disappeared.
Much business that used to come to
London from. Manchester, Liverpool,
Glasgow and so on, because London
was the best and easiest market, 1
now transacted direct between the pro
vincial exchanges without London s in
tervntion. Outside houses of stand
ing and repute have developed a large
business direct with the investing pub
lie, which appreciates the elimination
of the Stock Exchange middleman's
profits.
The mistake made by the committee
Was the old mistake of the trade
unions. It acted as though the public
depended on it and not It on the pub
lie; as though there were only so much
business to go round, as though this
business could- be forced to come to
London; as though the members of the
Stock Exchange could then monopolize
it and as though the function of the
committee was to see that each mem
ber got his fair share. But the result
of almost every attempt to coerce
trade in any given direction is either
to turn it to some other point of the
compass or to kill it altogether. , Both
results have followed in this case.
Some markets have been lost, all have
been less active, the margin between
the buyers and the selling priee has
grown greater and business in conse
quence has fallen off and been diverted
to other channels.
Conservative Regulations.
A great many members of the London
Stock Exchange feel that the policy
and general attitude which now direct
it are bad and that business must in
evitably contract unless it is allowed
to find its easiest and most natural
channel. They would like to see all
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'The New Channels of International
Finance Which America' Has De
veloped Have in Part Been Opened
Up at the Expense of London.
differentiation between broker and
Jobber done away. Moreover, they
point to many other old-fashioned and
obstructive methods that still encum
ber the great institution in Thropmor
ton street. For instance, members of
the Stock Exchange are forbidden to
advertise. Issuing' houses, therefore.
find it virtually impossible to dp busi
ness and retain their membership of
the exchange. Thev have accordingly
of late years withdrawn from It in
considerable numbers, while for large
sections of the general public, and
especially for the small investor, it re
mains a constant puzzle to know
where and how to obtain the services
of a member of the London Stock Ex
change. So long as they cannot .ad
vertise, the most effective method that
has ever been invented of bringing
brokers who want clients and clients
who want brokers in touch, with one
another is denied to them.
Then, too. the hostility of the com
mittee to the telephone and the ticker,
the system of fortnightly settlements
which regularly clog the wheels of the
exchange for two or three whole days
and are a standing Invitation to just
that kind jot speculation by members
and the outside public which it is most
desirable to discourage and the need
for a quicker system of transferring
stocks and for an effectively regu
lated curb market are all points which
are coming in for a good deal of dis
cussion. .
What especially the ' longer-sighted
members fear is that London after
the war will not be able to hold its
own against the less-fettered pro
vincial exchanges and the formidable
competition of New York if the prln-
of
ciples and spirit that
recent years
Outside the , London Stock Exchange in Thropmorton Street, Once "the Big
gest Bourse on Earth."
"Many Old-Fashioned Methods Still
Encumber the Great Institutions in
Thropmorton Street.
have guided the committee of the
Stock Exchange are persisted in.
There is no sign, however, that they
are going to be abandoned Just yet.
The committee is still following the
old track: its latest regulations
have been anything but of a liberal
and liberating character, and it wllL
be a tough Job to modernize Its way
of thinking and bring the London
Stock Exchange up to date.
But the greater question of Lon
don's general strength in finance after
the war is in the main one of rela
tivity. There '. can. of course, be no
discussion as to the immense financial
power which Great Britain has shown
and is still showing throughout the
war. She bore Xor two ' and a half
years the main burden of financing
the allies; 9he accomplished this with
out destroying her unique position as
a free gold market; she has shipped
well over $ 1.000,0 00,000 in gold to the
United States.
Two Vital VrrnaHln.
But has this glgajitic effort ex
hausted her? The answer is that with
one exception London has suffered less
from the war than any other financial
center, and that, if we leave New
York on one side for the mome-nt. her
reserve of strength is, therefore,
greater than any of them. Ciypital
will still flow to London after the war;
London will still be able to lead: for
eign trade may for a time decrease,
rates of interest may be higher, but
there is absolutely no reason why
these conditions should affect London
more adversely than any other mar
ket. Two things, however, are vital if
London is to hold her own. One is
that free trade, the source of all her
power, should not be tampered with;
the other is that the Government
should enforce economy by a far
heavier scheme of direct taxation than
It has yet ventured to propose. Far
too many Treasury notes are now in
circulation, the currency Is needlessly
inflated and prices are correspondingly
high and this faulty finance If per
sisted in until the end of the war will
terri'jly handicap the national effort
to recover from its effects. It will be
a handicap, but it will not be fatal,
whereas an abandonment of free trade
and -the resort to protection would deal
London a blow which could hardly be
survived.
It is quite obvious that when peace
returns London, as compared with
New York, will be found to have gone
backward. The war will have en
riched America; it most certainly will
not have enriched Great Britain. The
new channels of international trade
and finance which America has devel
oped have necessarily In part been
opened up at London's expense. Amer
ica's dependence upon London for
credits against the shipment of goods
will have been very greatly lessened,
if not altogether a. thing of the past.
A large .part of American foreign
trade in the future' will be financed by
bills drawn on American banks and
houses in dollars instead of on Eng
lish banks and houses in sterling.
But whether New' York will seri
ously rival London as the world's
financial center is much more doubt
ful. She will no doubt eventually, but
for the present that Is for the next
half century or so the work to be
done In developing and financing the
resources of the United States will
be on so enormous a scale that Wall
street may not bother Itself much
with the riskier and far less profitable
business of international finance. It
Is a business that is done on very
finely cut terms, such as Americans
rarely trouble about. Moreover. New
York can never possess the immense
geographical advantages of London as
A financial center.
Apart, from New York there Is no
rivAl that London need dread. The
war has knocked Berlin out of the race
for tirany decades to come and though
Franoe may again show her marvelous
power trt recuperation Paris can hardly
hope to challenge London yet awhile.
Compared with New York, therefore,
London's position will be weaker, but
New York may find the domestic de
mands upon her so imperative and in
satiable that Jhe will relinquish the in
ternational fUiance. Compared with
any other center, London's position will
be stronger than It ever has been.
If freedom of rvade is not only re
stored, but its artvi enlarged; if th
Stock Exchange proves able to adapt
Itself to the new conditions; , if gov
ernmental control is removed; if na
tional finance is so conducted as to
strengthen instead of impairing the
gold standard and if Great Britain as
similates from the war its lessons of
efficiency and hard work, Loudon will
be a bigger factor than ever in the
world's commerce and finance. Nor, in
my opinion, are these "ifs" as large
as they look.
METROPOLITAN OPERA SEASON OPENS WITH
FEWER DIAMONDS BUT MORE APPRECIATION
(Continued From First Pa?e.)
fredom. resonance. and complete mas
tery over every detail that makes for
purely artistic singing. She is a great
actress and in figure she was truly
magnificent. Her freedom in the high
er range and her rich lower tones give
her a compelling ascendency and at
tractiveness. Amato and Miss Muzlo
made a thrilling moment out of the
Nile scene and the baritone gave forth
some of his most beautiful tones in the
duet. Madrones as Ramfis was im
pressive in voice and in bearing and is
a d-ecided acquisition to the base-baritones
of the Metropolitan. Huysdael
was equally grateful in his role and a
word must be said for the exquisite
Rosina Galli. who, although a trifle
heavier in weight than she was last
season was equally lithe and fairy-like
Jn her movements with the ballet, which
in number, in costume and in grace
Kwere decided improvements over the
ballet of last season. The choruses
show that the master hand of Giulio
Settl has lost none of its power and the
staging, new in every detail, was of
the rarest craft possible to Richard
Ordynski, . whose art is not unknown
in New York.
A stirring feature of the perform
ance was the singing of the stars,
joined later by the chorus and the audi
ence, o "The Sar-Spangled Banner.".
After the fall of the curtain on the
coronation, scene it was raised to dis
close silk flags of all the allies over the
thrones of the King and Amneris, while
these were joined by Caruso. Amato,
Muzio behind whom the great chorus
and the band on the stage joined In the
triumphant uplift in the National bymn.
If the-re was one voice above all others
that carried words and song to the fur
thermost corner of the auditorium, it
was that of Mme. Matzenauer, while
the English of Caruso filtered through
he being the only one in whose hands
was a sheet of the music. The sight of
that great audience standing, thrilled,
eager, delighted, the appreciation and
Joy of the stage people in their con
tribution to the patriotic outburst is
something that will never be forgotten.
Following the brilliant opening
night, the rest on the first week at the
Metropolitan was thoroughly in keep
ing in the matter of interest and grade
of performances. Morcnzonl seems
well established. Judging from his
treatment! of the Saturday night "La
Travlatk." which was particularly
brilliant. Pierre Monteux, who made
his first appearance as opera con
ductor in Gounod's "Faust" Saturday
afternoon, gave a highly interesting
account of himself and showed his un
derstanding of routine and also of the
essentially charming- thing that can
hardly be described, but which is felt
to be a French warmth and grace. G.
Papi, whose services were much in de
mand already last season, was allotted
three of the week's operar and Richard
Hageman gave -one of the most bril
liant -Sunday night concerts that have
been offered to the patrons of the Met
ropolitan. There has been a great gain
in the standard of the Sunday night
concerts since they have been entirely
given over to Mr. Hageman, whose
orchestra has come to know him as a
symphony orchestra knows its conduc
tor, and the artists achieved individual
triumphs. These were Mischa Elman.
who has no peer either In the hearts of
the people- or In his art; Sophie Bras
lau, one of the most artistic members
of the company, and Ruth Miller, the
young American soprano who made her
debut on the Metropolitan stage Fri
day night as Musetta.
The direction assured a brilliancy on
the stage on its second night that was
almost equal to the "Aida" of Monday,
when It presented Moussorgsky's "Boris
Godunoff." which has proved its mu
sical and dramatic value. The Russia
of the opera is one of gripping interest
and is far away from the unrest of
today. Nothing could be more Impres
sive than the National color, both In
picture and in music, and the folk of
the stage is dellciously woven Into its
measures. Adamo Dldur was again
the towering Boris, having lost none of
the superb mastery of every detail of
one of the most tragic roles of the
Btage. Paul Althouse as Dimltrl
brought a superb voice to the part this
season a voice. Indeed, which has few
equals on any stage and he has grown
to be master of technic in the scene as
well. Sophie Braslau as Teodor, Le-,
norar Sparkes as Xenla, Rothier as
Brother 1'lmenn repeated their suc
cesses of previous seasons, as did Kath
leen Howard as the nurse.
The one change which brought not
only a great , singer to the role- of
Marina was effected through Madame
Matzenauer. She was in a sense an
other Delilah, as she should be, and
gave the 'audience a clear understand
ing of the part she was playing in
behalf of Poland as she worked upon
the emotions of the over-ambitious
young DImitrl. She gave a few mo
ments of glorious singing to the
picturesque scene. Even under the
grotesque make-up of Varlaam. De
Segurola showed the polish of his art,
as well as the unction of his humor.
The rest of the cast, as before, in
cluded Marie Mattfeld. Angelo Bad a.
Reschiglian, Audlsio. Albert Relss,
Giulio Rossi and Carl Schlegel. The
choruses for which hat master, Settl.
is ever responsible were admirable, and
the staging and costuming were of rare
excellence.
Two of the greatest favorites of the
Metropolitan had their first perform
ance of the season Thursday evening,
when Donizetti's charming little bit of
lace and color, "l'Ellslr d'Amore," was
brought forward under Mr. Papl. These
were Miss Hempel as Adina and Scottl
as the dashing Belcor, exquisite In
bearing and in attraction and still sat
isfying in voice. Miss Hempel has al
ways been a sihger of the very first
quality, but whatever she may have
done with her voice since last she ap
peared on the same stage would be In
teresting to know, for she accomplished
some of the most finished, most flaw
less vocalism one could wish to hear.
Sprightly, lovely to the eye, a skilled
actress in the most subtle sense, her
presence on the Metropolitan is a Joy,
and her Adina was a lovely foil to the
splendor of Caruso's ever-sonorous and
warmly colored voice and the polish
of Scotti's art. Caruso wrought the
audience Into a veritable fever of de
light with his superb singing of "Una
Furtlva Lagrlma." Didur was as sat
isfying In the comedy of Dr. Dul
camara as in his serious roles, and was
responsible for many laughs. Lenopa
Sparkes as Giannetta also showed a
vocal gain, and for personal charm it
would be difficult to outrival her
charm. She may always be trusted to
keep an artistic balance In whatever
she does. The chorus was in the spirit
and heightened the effect by supple
menting the artists in sprlghtliness and
character.
'
"La Boheme was the first Puccini
work In a season which may be for
tunate enough to have revivals of all
the favorites of that great Italian, including.-
perhaps, "The Girl of the
Golden West." Mme. A Ida. always at
her lovliest as Mimi: John MacCormack.
in his first appearance as a "guest"
member of the Metropolitan Opera
Company, and the debut of a young
American singer. Miss Ruth Miller, all
lent zest to the performance on Friday
night. In addition to these artists,
Giuseppe de Luca. as a delightful Mar
cello, de Segurola in one of his best
roles Colline and Robert Leonhardt as
Schaunard supplemented tne artistic
cast which also included M. Malatesta,
Reschiglian and Audlsio. - The chief in
terest centered naturally In the Rodolfo
of MacCormack. although It was not
unknown in these parts, he having
sung it a number of times at the Man
hattan. The tenor ince that time has
made a vast following for himself and
has established himself in a unique po
sition vocally. He Is so all-satisfying
on the concert stage that the trappings
of grand opera do not enhance him
very much in any direction. He at
tracted a large following to the. opera
and his presence was the signal for
great enthusiasm. Mme. Alda's Miml
Is one of the lovliest things she does
and In the third act she arose to u de
gree of vocal beauty which might bs
the envy of any artist in the operatic
world. Miss Miller was entrusted the
difficult role of Musetta fori her first
appearance on that great stage and al
though in the morning she had not been
able to talk above a whisper she hus
banded her resources sufficiently to
give a very good account of herself as
to personal charm and beauty, ease of
stage manner and excellent routine in
the French school, while from the
standpoint of the singer she revealed,
not to its fullest, but enough to show
that she has a well-schooled voice even
In range and pleasing In quality. She
evidently pleased the audience mightily
because she elicited rounds of spontan
eous outbursts throughout her perform
ance and the waltz song brought hearty
recognition. De Luca. one of the finest
voices and one of the best actors of
the organisation, gave a repetition of
the Murcelro. which already last sea
son was a delight and had there been a
little more life in the second act. the
performance would have left little to
desire.
i
Not until - Saturday afternoon did
Geraldine Farr;ir face her admirers at
the Metropolitan, and then she appeared
In a role which many have praised and
enjoyed. Miss Farrar has long since
taught her public that she has neither
feeling nor respect for tradition for
hlch reason there was no reason to
reproach her for. her individualities in
the part of Marguerite.
Rothier's Mephistopheles was the out
standing feature of a highly pleasing
performance of Gounod's "Fuust."
which was given under the direction
of Pierre Monteux. the French con
ductor who was hejtrd last Summer in
symphony concert, but never until Sat
urday in-opera. He shiowoH understand
ing and treated the t'ork with affec
tion not always manifested toward this
time-honored masterpiece. Thomas
Chalmers, the young" American bari
tone, made his first l.Ietropolltan ap
pearance as Valentin and sang the role
with great vocal beauty, an easy stage
bering and depth of feeling while the
title role gave the first performance
of the season to Martltielll. a gracious
intelligent interpreter of a romantic
part and the possessor of one of the
most pleasing tenor voicos on the oper
atic stage. Raymonde lelaunols as &
fetching Siebel. Kathleen Howard as
a true commedienne in the part of
Marthe. and Louis D'AngeJo as Wagner
completed a cast that had three mem
bers formerly of the Ccuitury Opera
Company." while the nw staging
brought into play Joseph . Urban's art
and the "Walpurgls Night" gave an
other opportunity to see lvosina Galli
at her most enchanting surrounded
with an elaborate ballet.
Frieda Hempel gives promise of the
most brilliant season of hen American
career as for the second time in the
first week she sang fwc i capacity
house,
f