Evening star. [volume] (Washington, D.C.) 1854-1972, 1915-10-10
American Financiers Assemble
Halt Billion of Surplus
on Short Notice.
EXPECTED TO STIMULATE
FOREIGN TRADE OF U. S.
Wall Street Takes Steps to Guard
Against Unrestrained Speculation.
Business Conditions.

last week official announcement was
made that the American investing pub
lie would be invited to participate In
the largest security Offering ever nego-
tiated by an American banking syndi-
cate. Tuesday morning of this week,
at 10 o'clock precisely, the subscription
books closed with a bang, subscriptions
having been received for the whole
amount. Thus has been ushered in
what might be considered the new era
of American finance, the Significance
of which will extend far beyond the in
vestment of half a billion dollars in
the securities of foreign governments.
We have discovered that we could
bring together s500,000,000 of surplus
capital, for a specific purpose, without
apparent strain on our domestic eco
nomic condition, and the proba bilities
are that we shall have other occasions
to prove our resourcefulness in a SINH
lar manner. We are protecting our
trade and creating avenues by which
we not only take advantage of present
opportunities for commercial and in
dustrial profits. but prepare the way
for permanent new markets for Ameri-
can products.
And we have done all this in the best
and wisest way, for instead of receiv-
Ing payment for our goods in gold, which
would have inflated and distorted our
currency, we are building up a credit
which will pay us good return on our
investment, and will assist in trade ad-
5ustments when the war is over and
when we shall again be in need of the
commodities received from Europe
prior to the war.
German Loan and Markets.
The same is true to limited extent
OF the German war loan. subscribers
Tor which have been successfully solic-
Tied in this country. While we are at
present receiving only a small fraction
OF the German goods imported in nor
NAL times. We have considered the
German market as one of our most
important sources of import, and will
market when the war is concluded
Whatever of the German war loan is
absorbed in this country at the pres
ent time will by that amount serve as
an offset to Germany's credit for goods
exported when peace has again been
restored.
Some interesting sidelights have been
shed upon the allies loan by the man
ner in which subscriptions have been
sought by some of our American multi
millionaires- According to one reliable
statement. 1T took just six subscrip-
tions to make up the first one hundred
millions of the loan. The largest sub
scription was for $4,000. 900. which is
supposed to have come from the Du
Pont Powder companies. The next
largest, supposed to be that of Charles
NJ Schwab or the Bethlehem Steel Cor
poration. was for $4,000, 900. Follow
Ing this came one for s15,00O,000 and
three for s1o.000.o00. making total
for the half dozen of exactly $780,
100000. 1t Is also understood that one
of the en-million-dollar subscriptions
was for the account of John D. Rookie
Teller, though no official confirmation
can be obtained. The syndicate has
announced it's intention to make the
first awards to subscribers Of from one
to hve and ten thousand dollars, so that
those who bid for the smaller amounts
will be sure Of allotments. II. as now
seems probable. the new bonds will
In time become convertible into long
term securities of the allied govern
reasonably expect a considerable ZAP
probation in their market value.
Individual Investors Admitted.
The number of underwriters is very
large, the bankers having permitted
individual investors to participate in
the syndicate on the same basis as the
largest banks and bond houses. This
procedure is declared to be very I'M
usual. Many Of the underwriters have
come in for amounts as small as 800,
while there are large number of $500
and $1,000 subscribers to the syndicate
Under the rules of the syndicate adopt
ed last week an underwater may with
draw his bonds by paying IS, with the
understanding that he will not resell
them until after the expiration Of the
fixed at sixty days. Underwriters max
ing Withdrawals will receive a rebate
of IN after the syndicate is closed.
Underwriters may elect not to with
w nd in hat
will be held accountable for their pro-
portionate share of the total under
writing for the unsold bonds. Should
all the bonds be sold to the public at
IS and none left for the syndicate MEM
bers, then the underwriters will receive
the profits of the syndicate represented
by the difference between the syndicate
price and the price paid by the public,
which. after making deductions for ex-
penses. will amount to s7,500.00o. I'm
derwriters, like everybody. else. may
purchase bonds from the syndicate at
IS il they choose to do So Bonds
bought at 9s directly from the syndi-
cate may be resold. while the bonds
Withdrawn by underwriters must not
be resold prior to the expiration of the
sixty days. Underwriters will have to
pay their first installment of % per
cent October 10. The second install
ment of % per cent is due November
Is, and the third and last instaIlment of
80 per cent is payable December Is.
Participants in the underwriting syndi-
cate who withdrew their full participd-
ton are relieved from any further syn
dictate liability.
Stock Market Features.
Wall street has during the past two
or three weeks enjoyed the most wide
spread and sustained interest of the
general investing public that has ever
been accorded our premier security
mart. Transactions have been large.
even record-breaking, but there Is not
even the suspicion of manipulation Or
wash sale movements, as was too
often the case in days gone by. 1t is
true that the market values of many
stocks have been marked up many
points beyond their true worth, and in
this respect there is danger of a rude
awakening for many who are already