New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1915-07-04
MORGAN HOUSE
FINANCE AGENT
FOR ALLIES HERE
Millions in Loans for Rus
STA and France Arranged
in America by Firm.
S3OO,OOO,OO0 BRITISH
ISSUE UNDER WAY
Help in Purchase Of War NUM-
tons of Greatest Value to
Powers in Triple Entente.

]. P. Morgan & Co. and their affili-
ated house in London, Morgan, Gren-
fell & Co., were appointed CONNER
cial agents for the British govern
ment January &c of this year. follow
ing a visit 10 London OF Henry +.
Dawson, one of the Morgan partners.
There was at once established in the
local Offices of the bankers a purchas-
ing department, with more than 100
clerks and other employees, and Edward
K. Stettinius, president of the Dia-
mond Match Company, was placed at
its head.
Under the British governments
agreement with the bankers, the Nor
gan firm assumes no financial -espon-
sibility, but simply acts as the gov
ernment's agent here, paying out
funds as purchases are delivered and
being reimbursed by Great Britain.
To maintain its account with them the
government has sent from Canada,
where the Bank of England has a de.
positary at Ottawa, $55,0OO,OOO III gold
in less than six months.
Until their appointment TO act Tor
Great Britain J. P. Morgan q Co.'S
transactions with tho governments OF
the Allies had no formal official char
acter. A few days before that time,
however, 4 syndicate, headed by them
had arranged to give Russia credit
for S25,0G0,OO0 here, he proceeds to
be spent in the United States for mu-
nitions Of war or for any other pur-
pose. BY means. Of this credit the
Russians have been able to pay for
shells. cannon, aeroplanes and other
supplies that might otherwise have
been impossible TO procure because
of the physical difficulty of getting
gold to the United States from any
point in Russia.
In the early days Of the war. when
all the foreign exchanges ran heavily
against the United States, it was the
Morgan firm that completed with the
French government an arrangement
whereby, through an exchange OF
credits between Paris and NeI York
TO the amount of S6,000,000, il was
possible for France 70 pay Cor pur-
chases here and for Americans abroad
to get their letters Of credit PAID IN
Paris. This, because it was the first
assistance any of the warning nations
had obtained in the United States,
was the beginning OF American fnan-
cial aid to the Allies which Is now
about to run into the hundreds OF
millions.
Loan TO France Frowned On.
In August, last year, an attempt
was made by the FreLch government
TO float loan of S1O0,00O,000 here: At
that time there was great stress LAID
on the desirability of avoiding even
the appearance that the United States
and her citizens were rot preserving
strict neutrality. Taking cogn'zance
Of the administration attitude, Mr..
Morgan went to Washington and
asked Secretary Bryan what position
the government would take toward
such a loan.
Mr.. Bryan's answer was as follows
There is no reason why loans should
not be made TO tho governments OF
neutral nations, but, in the judgment
Of this government, loans BY Amer
lean bankers 20 any foreign nation
which is ct war are inconsistent with
the true spirit of neutrality"
The loan was then abandoned, and
this statement was given out By Mr..
Morgan: "The question has been
asked of the administration, not be-
cause there was any question OF the
legality Of a loan, but in order that
any action to be taken might be in
harmony with the ideas of the gov
eminent. OF course, the question IS
disposed of by the opinion expressed
by the Secretary of State. The firm
is 40 advising the French intecmedl-
aries who approached them IN this
matter"
Later the government modified its
attitude to the extent Of saying that
it would take no cocHizance of loans
that were made. but that If they were
submitted to it it would feel bound
TO disapprove them In October, 1914,
the National City Bark accordingly
advanced the French government SlO,-
100000 against its treasury no'es.
Then in February of this year
syndicate of bankers, headed by j. 7.
Morgan & Co. and the National City
Rank. agreed to market in this coun-
try what part it could Of a S5OOOOOOO
French loan. About S31 100000 Of the
bonds were sold. most of them to
banking institutions and other corpo-
ONLY ten days ngo still another
loan was arranged here for French
account. though not for the French
government, which, however, IL bene-
fiting by it through its effect on the
franc exchange market. Again it was
J. P. Morgan G Co. VINO managed the
nian in this country. the Rothechilds
acting for France. The loan in this
case il for an unlimited amount. Its
size will depend on the number and
value of American securities held in
France that the Rothechllds can de-
posit as collateral security.
Late on Friday Of this week Il be-