New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1915-08-17
Problem of Debt to Amer
lea Puzzles London
FinanCierS.
STERLING EXCHANGE
AT LOWEST RECORD
Government Urged to Bring ou'
$5OO,OOO,OO0 Loan in u s.
TO Avoid Income Tax.
fBv Cable to The Tribune.l

fBy Cable to The Thbune.l
London, Aug. 16.-Important hnanc'a'
interests are bringing strong pressure
on the government to try to check the
downward sweep of sterling exchange
in the American market by issuing
there a large amount of short term hlsn
rate bonds.
The exchange rate continued down
ward to-day. at one time touching the
lowest known record-4.64
George Clare, head Of a Leading eA-
change house. said to-day that IN ms ms
opinion an issue of short time D0hu VI,
81 AN attractive rate for the New ioLA
market was the best solution OF the SIT
uot;on and he believed it would nave
70 he adopted. He pointed out that the
remedy found in selling American Sc
cnrities held here had been Vlrtualy
oSbeusted He estimated that these
saies had reached S20,000,OoO weekly
for some time, and had aggregated
abort $500. 600 900. which was about all
the relief feasible from that source
New York Loan Best.
"The best course now" said Mr.. Cisre'
ais one | understand is under cohsieeI
alton. 1t calls for the issue OF ion
cign loan, principally IN New ON, ~
such a rate as TO be attractive 70 tn ni.'
icor hanks and investors. frooaoly
ner cent two-year bills free from IN
ro1,o tax would appeal strongly TO Dig
American investing concerns. ~ 80.
he the first time on record that urea'
Britain had placed a loan in a foreign
countrv and this may raise the ques,
ZION of dignity, but Germany, japan ana
ether countries have placed such ioahs
in New York, and the time has come
when we should DO the same, as th1
surest means of relieving the abnormal
situation growing out Of the ADVERSE
balance Of exchange against US -
Tho house of Morgan, Grenfell Co.
-oforrod injuries to Marshall sons
and MIR. Clare. but they stated also Una ~
a means of relieving the exchange SIT
rotion was understood TO be under CON
e;deration either through loan or by
tho nlacinr Of a big credit in New orK
as advocated by +. f. Davies. chairman
of the committee Of foreign bankers'oh
exchange problems.
Debt to America Great.
Rvrnards Hooper, a financial author
49, -itinC IN "The mes" says:
~ is common knowledge that owing
20 verv large purchases of food ana
munitions from the United states TOT
onr own use and that Of our allies we
have become indebted to American mer-
cbants and manufacturers for very
largo sum
Discussing remedies. Mr.. Hooper re-
iects the idea of paying cash tor every.
thing out Of the proceeds OF the recent
This he says. would be very in
convenient and might leave us danger
ousIv short of cash for equally lmpor-
tant purposes 49,, .;..
MIR. Hooper suggests "the creation
of something by means OF our creol'
which will liquidate the debt In other
words we must issue British govern J.
mont security Of a kind which will be
marketable in the United States.
MIR. HOOPER proceeds: ANY direct
ALLEGATION Of the British government
would surely be readily taken up in the
limited States provided that the weld
from il were high enough relatively to
the level of interest there and CON
slant -Four and a half per cent, the
rat, Of interest on the war loan JUST
issued would, in the opinion or Ihost
good Judges, nearly fulfil the hrst OF
these conditions, but it would not full
N the second because the interest on
the war loan is liable 70 the income
tax -,
"Tne type Of security required will
have 70 he a loan with interest free
from income tax and issued abroad
The type of security to be issued must
be decided by experts and its form
must derend q good deal on the amount
we shall ask for. The amount we may
need to borrow i'm the United States
is. [ am told. about S5O0OOO,OOO.
Bond Issue S5OO,OCOGOO.
"We could issue bond which ] be.
Iicve would meet he requirements oil
America and not compete with our own
war stock. We might arrange TO issue
in New Yor. and Boston, and II neces-
sarv in other American cities, Az per
,cnf fvc-vcar bearer bonds for $500
GOO 600 or $500. 1000 at 9Saa per cent
which would give an approximate yieid
over the five years Of -. per cent and
would be somewhat more desirable IN
roiUt of safety even in the jealous
ives Of the American people than the
large proportion OF bonds now held as
savings bank investments by Ameri'
tow