The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-09-05
FINANCIAL NEWS
AND COMMENT
Bankers Arrange a Loan of
S1O0,OOO.OOO TO the city
of New York.
WILL PAY DEBTS ABROAD
An Important Contribution TO
Improvement of Money
Market.

IN a general why il came to bo pretty
definitely understood in Wall street early
yesterday what arrangements New York
city had been able to effect with bankers
10 provide for the maturity abroad az
some SSO,0V0,0O0 of city obligations be
tween now and the beginn uC OF nest
year. Most of this operation will call
for remittance TO London ether in the
form OF exchange or through the move
ment of gold. and il can hardly bc
doubted that the ARRANGEMENT for The
discharge OF the c.tys debt has been q
potent influence in. this weeks obvious
Improvement in the interna lonal money
market
Ever since tho war broke GU, the mat.
ter OF chief concern among the leading
bankers has been the coutrivtuce OF pay.
ment for public and private obligations
which this country has Incurred TO nnan-
cial Europe. The mass OF New York city
rotes calling for settlement IN the balance
of the year has been the chief item
in the category OF these accounts II
was these notes which AZ least Us much
ms anything else inspired tho rather
anxious uttcrances in banking quarters -
Few weeks ago about the imperative ne.
oessity OF avoiding anything resembling
reputation OF our foreign indebted
ness and about the necessity OF main
taining American financial honor abroad
The situation OF the international ex-
changes and the strain of banking posi-
tons here. together with demand for the
conservation OF gold resources. seemed TO
place difficulty IN the way of malSins
payments when they fell due on the city
Of l.h
persistent efforts to correct the situation
have been working to a successful con-
clu0'on. There seems reason to believe
that the action which has been agreed
upon here In respect to the city notes
may help TO relieve a considerable press
ure from abroad for the payment Of
money owed and conduce to a further
extension OF credits from London IL that
may be required. The way in which
commodity exports are moving in re-
spouse to demands occasioned by war -
making exchange rapidly, and the sup
ply OF exchange is bound to lie increased
even more rapidly when foreign conf
dence. both in our ability and our will
.ngness to pay our debts, Is promoted
by such an undertaking as that into
which bankers have entered with New
York city.
In outline. an underwriting IL being 81
fected with practically the entire New
iotS oaihHls community 10 MAKE loan
10 the city OF 500, 100000, for which the
city will give per cent notes running
for brief series OF wears The bankers
agree TO supply exchange for 50 per cent
or this amount IN order 10 enable the city
10 meet It's payments abroad. Probably
part OF the payments can he met with oN'
change, but II is reasonably certain that
some amount OF gold will he sent to
orawa, where u Will he counted as Bank
OF England reserve and automatically
available for use In the London money
market Their" can be no question that
tho arrangements between the bankers Of
the city helped to bring about the rclaxa-
ton In foreign exchange In the last few
days and encouraged London houses 10
oher TO accept American ninety day bills.
II remains 90 b. seen what further -
fects will follow from the exhibition ~
solvency which the cpurtry'S financial CEN
ire Is giving and the evidence II III dis
position TO assist In thu discharge OF dehis
incurred abroad, but unless al precedent
falls II Will go far to Increase the free
action OF the foreign exchange and the
bctterment OF Tho International money
market. which will have Il favorable retiec-
ton not only on the trade exports but on
domestic tnauccs. All the helpful innu-
cnces lrnagnablo on this score will he
accelerated II the bankers conference in
Washington called hy the Federal Reserve
Board reaches the conclusions expected in
regard TO tho Utilization of the country
bank reserves and general monetary re-
sources for the most effective purposes
These Influences will not save Ills from
paving our share OF the cost of the war
but they will contribute 10 make the
burden less. President Wilson'S message
10 Congress Oh tho necessity OF war taxes
Is forceful reminder Of the hardships
which the war viii bring upon US but IL is
tho duty of patriotic cndeavor not only to
recognize the hHrdships but to face man
fully the new conditions which have been
created 40 that they may he more readily
overcome.
One thing which Is quite advisable 10
do Is 10 muster Intelligent public opinion
against some OF the excited schemes. for
which Government aid has already been
obtained or invoked, which have been de-
signed to Hood the land with crazy quilt
currency. Nor should criticism stop with
tho projects Of financial expcrinenters.
The immediate opportunities OF foreign
trade have been exaggerated and are
leading to III advised attempts TO exploit
external commerce which are bound to