The Birmingham age-herald., 1914-08-14
AMERICAN BANKERS WOULD FLOAT LOANS ID WARMING PARTIES
President Confronted With Problem as to Whether Action Would Be Viola
 tiOn of Neutrality

Washington. August 12.-President Wilson was confronted today with the
 problem of whether American bankers
 shall be permitted to float loans in the United States for any of the coun- tries engaged in the European war Though the President has not reached a final decision he is strongly opposed
 to the idea. The question arose through the desire of J. P. Morgan X Co. to float a loan of several hun dred million dollars for the French gov ernment. Inquiry was made of the state department by the Morgan firm as to
 whether the Notation of such a loan
 would be regarded as a violation of neutrality. Secretary Bryan discussed the subject with the President, who is studying it carefully before returning a final answer.
 Besides J. P. Morgan & Co., it is un- derstood another banking house of prominence is desirous of floating a
 loan for Austria. but the state de- partment has not yet been approached.
 so far as could be learned tonight, with
 any formal inquiry as to questions of
 neutrality involved
 Might Breed Misunderstanding While there is no provision in the American neutrality statutes against alsaning money to foreign nations and no international neutrality agreement forbds it, the Presidents Judgment Is that, if it were permitted, serious
 misunderstanding might ensue in Eu- rope as to the real attitude of the American government and people to- ward the warning nations. A loan was floated for Japan during the Russo Japanese war, but notwithstanding the precedent. it is President Wilson's be- | lief that the influence of the American government ought to be exerted so far as possible toward reducing the length of the strife rather than adding ele- ments for it's prolongation. He like
 wise is opposed to sending large quan- titles of gold from the United States at time when domestic financial
 needs are paramount
 The possibility Of stirring up i'll feel ing among the numerous bodies of cit izens in the United States of particular sympathies in the European war also is regarded by the President a po- tent reason for discouraging the float ing of loans. BS preserving strict neu- | trality he believes the position of the United States will be most secure in the present emergency and less like
 
 over.
 Commercial Transaction On the side of the bankers. how ever. the argument advanced is that the floatig of loans is a purely com
 mercial transaction in which the gov ernment is mot obligated to interfere. The bankers do not desire government aid or guarantee. but merely the as surances that their action would not be regarded as a violation of neutral lity.
 Gold like coal or any other war sup l ply, has been regarded as contraband on the high seas and subject to seiz- ure. So, if the American government permitted the Notation of loan to France, American bankers would send their hundreds of millions across the seas subject to capture by German or Austrian ships and could not expect
 help from the American government in securing reimbursement for any losses sustained.
 I The entire question will be dis cussed at tomorrow's cabinet meeting, | but those in close touch with President !, Wilson predicted tonight that the American government would try to | discourage the floating of loans to France, Austria or any of the other belligerents.
 1 ]. P. Morgan arrived here tonight to attend conference tomorrow with
 President Wilson and Secretary Me Adoo of bankers and business .inen to
 devise means for the movement of
 crops to Europe. It could not be learned whether he will discuss with 4 officials the subject of foreign loans while in the capital