The European war has thrown a tremendous burden upon the investment markets of the United States. In addition to the problem of making a place for new security issues of established corporations and of financing new enterprises, American investment bankers and their customers have been face to face with the necessity of purchasing an enormous aggregate of securities of American corporations heretofore held in foreign countries, and of absorbing over one billion dollars of the bonds of

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... t governments. There is a limit to the amount of securities which the investors of a country can absorb. This limit, in the last analysis, is determined by the aggregate savings of business and professional men, added to the reinvestment of income derived from dividends and interest. It is an axiom of finance that when the supply of securities offered exceeds this amount a portion of them cannot be marketed. These undigested securities, as they are frequently termed, remain in the hands of underwriters and promoters, or clog up the collateral loans of banks, frequently laying the foundation for panics and other serious financial disturbances. When the investment market shows signs of an over-supply of securities, those least favored or offered on the most unfavorable terms, are passed by. The promotion of new enterprises is curtailed. Corporations postpone entering the financial market for new capital to finance extensions and improvements. In brief, the output of securities is diminished until the market is able to absorb a larger supply.