New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1914-09-05
CTTY'S FOREIGN
DEBT TO BE PAID
Banks Agree to Take
S1OO,OOO,OOO Issue OF
New Notes.
WILL PROVIDE 80 PER
CENT IN CREDITS
Appeal to Patriotism of Bankers
Answered-Ease in Foreign
Exchange May Follow.

After an all-day conference in the
financial district Yesterday between
Controller PrenderRast, acting mayor
McAneny and prominent bankers, Ioi
lowing n series Of such dairy Uiee'inso'
il became known that dehnlte P'a'
for meeting the city's debts ABROAD 70
m.;:ofc within the next four months
had been made. This provides Ior thf
issuance of Sl00000,0OO OF new notes
TO bear interest at per cent "hlch
will be sold to the banks OF the Guy:
Its success is assured by a promise d
cooperation by the leading members OF
the Clearing House Association, whlcR
will, in effect, be an underwriting o.
the issue.
All the New York banking institu-
tions will be invited to participate N
the issue. The working agreement pro-
yides that they shall stand ready to
provide $40 100000 Of foreign exchange
as wanted in the course Of the next
few months. though it is considered
more than likely that the actual re
ouircments in exchange TO meet the
city's maturities will fall far short OF
that amount.
One of the bankers most interested
in the undertaking said that in agree
ing to back up the city the banks were
taking stand of high patriotism
"The banks are not at all anxious to
increase their commitments just now
he said. land though the rate OF IN
terest on the new obligations makes
them eminently desirable investments,
it is only because by absorbing them
they will make it possible for the city
10 keep faith with it's foreign creditors
that they have agreed to take up the
issue and to guarantee the raising or
exchange. Too much cannot be said
for their patriotism"
It was explained that the new notes
would be in series of one, two and
three years. The total Of $l00,0OO,OOO
will cover bond interest and other
obligations of the city, besides approx
mately 1872 100000 of revenue warrants
maturing between September 10 and
the first week in January, 1915. OF the
revenue warrants there will be total
of 81 500, 900 francs payable in Paris or
New York and a total Of Gl4,5l5,OOO
payable in London or New York before
the first of the new year. By months
they fall due as follows:
September 81, 100000 and 100000
francs; October, G3,3l0,000 and l0A50,-
900 francs; November, G6,225,000 and
35,5jO,000 francs; December. c2, 1870. 900
and 8,5O0,O00 francs; January, 100000.
1t is expected, because of the high
rate Of interest on the new notes-6
per cent, as against Az on the old
and because the United States is the
safest country in the world in which TO
have investments that a large number
of foreign creditors will be we'll salts
fed to put aside the offer to pay them
cash for their holdings and will accept
an exchange of securities instead.
In any case. bankers foresee a much
easier foreign exchange market, be-
cause the willingness of the city to
meet it's debts as they fall due, regard
less of conditions abroad and the good
excuses that Nigh: be made for post
ponement Of payment, is expected 70
encourage discount bankers in London
to buy paper more freely and so, by
releasing bankers credits, greatly re-
lax the tension IN the international
money market.
Bankers said yesterday that it was
within the possibilities that gold might
be sent to the Bank Of England's depOs-
!tary at Ottawa in connection with the
payment Of the city'S foreign debts,
but expectation was so general of an
easing up Of the exchange market that
that course was not thought likely.
The money that the banks will sub
scribe for the new issue will not be re-
CURED from them all at once, but Will
be withdrawn gradually, as occasion
arises, to meet the several issues. Some
Of the maturing warrants are held oY
New York institutions, b't the number
is said to be small in comparison with
the foreign holdings, most of the war
rants having been put out in the carly
summer as renewals Of other warrants,
in order to avoid the payment Of ex'
change rates then considered high, but
now far exceeded.
1t is understood that formal defnitiVe
action has yet TO be taken on the agree
ment by the banks, which will really
form the underwriting syndicate, but
the promises which have been made
will be regarded as binding. The presi-
dent of one of the largest Wall Street
banks said late yesterday afternoon
that the plan could be regarded as an
accomplished fact.