The sun. [volume] (New York [N.Y.]) 1833-1916, 1915-12-15
BRITISH FINANCE
PLAN CRITICISED
English Papers Doubt Wisdom
Of Mckpnna's Scheme on
I. :. Securities.
TERMS CALLED LIBERAL

HoNpoN, Dec. 1.-THE Governments
terms in the scheme for mobilizing
American securities are considered
generous in the American section Of the
stock market. 1t Is believed That many
trust companies and insurance Arms will
seize the opportunity to sell their hold
ings at the present high level.
The opinion Of exchange houses is that
the scheme will have only an indirect
influence on exchange rates. because 1t Is
only voluntary and for the purpose OF
providing dollars for Government impor-
tation The plan Is regarded as merely
changing the method of bringing about
exchange. inasmuch as exchange has un-
doubtedly been supported during the
past year by sales of American securi-
ties. II was not thought that the plan
had anything to do with to-day's firmer
tendency In cable transfers at ne. after
an opening Of ana. and this was at
tributed to Continental sales Of dollars
here.
Newspapers seem to be waiting for
further details before p~ronouncing judg-
ment upon the scheme. and they are
asking for a clearer definition Of the
Governments plans for disposlng Of
securities obtained by purchase. The
House OF Commons will scrutinize the
whole scheme closely before giving a
hnal approval to a measure which will
put 40 much power into the hands OF the
Treasury.
Plans wisdom DOubted.
chancellor OF the Excheauer Nc
Kcnna's statement that the Treasury
docs not intend to throw a large amount
Of securities on the American market
hstt iptnpha ~ 'shprrnw nh securities
has caused inquiry TO be made as 10 why
securities should be bought outright II
the only intention is to borrow on them.
The Post says:
This is an argument we are unable
70 follow. Certainly " the Govern
ment actually purchases securities here.
the simpler method would he TO rsell
them on the other side"
The soundness OF the whole plan IA
questioned by the Manchester Guardian.
which points out that one objection to
Government Intervention as a purchaser
or borrower is that II sends up the price
~ securities against the Government,
and that another objection Is that II
tends TO give an exaggerated impression
Of the British financial dificulties.
Sir George Paish made the following
Statement to-day In regard to the Gov
ernment's plan
Practically speaking. Great Britain
has to provide all the money needed to
settle the American favorable trade bal
ance. For 1915 the excess OF exports
wIn probably reach $3.50. 900. 900, and
after a~llowing for payment OF interest.
frcights. &c. the balance In favor OF the
States will probably reach 1880. 900. 600.
Of which about 5000. 0O0. 900 will be set
tied in gold. $500. 900. 900 by the recent
Franco British loan. and the balance OF
about $50. 000. 900 by sales OF securities.
May Have 20 ray $4,000. 900 900.
ain 1915 the balance in favor Of the
States. In view of the great quantities
Of goods already ordered. may not be
FAR short Of $4,000, O00. 900. and after
allowing for interest n other pay
ments. the net balance In favor OF the
States may he in the ne.shborhood of
-, 900. 900. 600. With such a prospect II
was essential hat Great Britain should
mobilize her American securities and
make necessary preparations for pay
ment OF so great a sum
THE plan of the British Chancellor is
designed to provide all the none that
will he needed. although possibly the
American people themselves. in view OF
their desire TO create n great interna-
.lonal money market in the United
States. will wish to invest money In
british or French loans AT the very at
tractive rates of interest which they will
afford. British investors, from the in
dividual viewpoint. nave no need to sell
their securities. and would not do so
were II not for patriotic reasons
"a great man may lend their securi-
lies In order that the money needed 10
meet the trade balance in the United
States may he paid. and II is obvious
that the demand in the States for securi-
ties will he greatly in excess OF the
mounts which Britishers are likely to
cell.
Indeed. the amount Of money which
will accumulate in the States Is likely 10
he so great that not only will there he
no difficulty In absorbing any securities
which British and French investors may
desire TO sell. but there will probably
ne a big surplus for investment In Brit
fsh, French or other Government loans
and in other foreign securities"