The Birmingham age-herald., 1915-06-26

and important work was committed to
 American bankers who are under the
 leadership of the house of ]. P. Morgan
 & Go. and of Frank A. Vanderlip and others of the National City bank group. It is only a matter of inference-since not until the history of this new and great
 piece of financing is written will it be possible to tell the whole story-and yet the inference is strong that the American bankers put before the bankers or
 France the proposition that they attempt to obtain such possession of American securities held in France in exchange for
 French securities behind which stood, in | fact, if not in name France itself as would make it possible for the United States upon collateral securities of this 1 kind to lend many millions to France' | One of the reasons, doubtless, why this wholly original and highly artificial piece | of financing was suggested to the French | bankers is to be found in the attitude or | the administration at Washington for 1 at the beginning of this administrator | it put its foot firmly down upon the as 1 sociation of American bankers With great loan which was to be financed m the 1 interest of the new republic of ehlha' Later, after the war began, 1t was known that the administration would regard with disfayor the loaning of American iuros | to any belligerent nation
 | At that time. Canada was anxious to se- cure either for the dominion itself or TOT
 municipalities many millions, ana as 'ne
 London market was closed to loans ol l that kind Canada turned toward the United States. Informally, at least, prop-
 ably privately and confidentially, the oa-
 nadian authorities were told that the ao- | ministration at Washington would not | favor a loan to Canada But 1t was also said that If the terms of loans were put
 into different form, so that the trans actions would appear to be purely pahh- ling transaction, then there would pc iio difficulty about borrowing money III .ne United States. In effect the United States
 has loaned a little under $100,0Oo0oo to Canada, but in law it is the American
 bankers who have loaned In the 10TH
 of banking propositions
 Another Reason for Inference
 Early in the present war some who
 are leaders in our internauontai hhahc'
 | ing were inclined to think that sooner oi
 II later American securities which are hele n for investment by citizens of the bellger ent nations would have to be utlilzeu II liouidating permanently the unprecedenteo debts which these belligerent nations were | involving themselves in to the onlte' States for the purchase of war commodl ties There seems to have been at frs either doubt or hesitation on the par of the French bankers respecting then | ability to secure any more than trl1nnt amounts of American bonds and stock' for which French bonds could be ex changed. Our own bankers, as long as' as last fall when an attempt was mad' to learn approximately the amount O American securities held abroad were per suaded that by France alone at leas $500 COG GOO of these securities have beei | purchased. That is a larger amount thal the estimate commonly held by those wh' have only a superficial knowledge Of Eu l ropean investments in American securi ties.
 This ingenious and highly original prop l osition is. however. regarded here as O F less immediate importance than the re cent announcement that Great Brltail ! would offer to her own citizens $, 2o0ooo'W l of long-t time bonds which are to bear 4i ! per cent interest Not in recent tm has Great Britain offered to pay as larg | rate of interest as this upon bonds Whlcl l had 30 years to run. Apparently in Grea Britain there is to be the same experl ! ence, speaking from a relative point O view. as that through which the uhlte | States passed at the time of the civil wal None of the new generation of financier | who are now handling In such brilllan | manner the new propositions can reca Il the day when the announcement wa | made that it cost the United States S3, | cDOOOO day to maintain it's army in tn | field But there are a good many or tn | old generation who can easily recall tn | censternation and anxiety which this an | nouncement caused. Many were fearft | that an expense of that Kind Woui | speedily drain the north of all its re | sources so that the civil war would D | ended because there was not none | enough to pay the expenses. But Davi A Wells pointed out and Jay Cooks dem | onstrated that there were abundant rt | sources and funds in the north, and the terms were satisfactory the govern ! inent could borrow from the people all tn , money that was needed
 Last winter, when Henry P. Davison wa