The Birmingham age-herald., 1915-10-04
ENORMOUS LOAN ID FOREIGN POWERS ID QUICKEN AMERICA Every Dollar Will Remain |. Here to Pay Debts of Foreigners to Us GREATEST LOAN OF
 KIND IN HISTORY Action of Commissioners Must Be Ratified by Two Parliaments Be-
 fore It Becomes Actually
 Binding
By HOLLAND


 James J. Hill said for publication, when the negotiations for the Anglo French 1 loan began, that the proposition really 1 involved an arrangement by means of
 which the commercial and agricultural l interests of the United States would be | able to protect their trade, maintain | it and receive in convenient form pay ments for the commodities they sell. 1 This remark by MT. Hill is report ed to have concentrated attention throughout the country upon the fun damental purpose of this negotiation. Reports reached this city that the inn pression at first prevailed in some parts of the country that England and France sought to obtain hundreds of millions in this country and that hav- ing secured the money they would withdraw it. Even in New York some persons were apprehensive that this was the purpose. Now in the statement made by J. P. Morgan & Co. after ne- gotiation was finished the idea which was conveyed in MT Hills comment Is expressed, although in somewhat diff ferent phraseology. Many persons who have been greatly interested in these negotiations have pointed to the Nor gan statement which is in these words:
 The proposed loan may in fact be con- sidered as an arrangement made by American agricultural and commercial interests with their regular customers to accept deferred payment covering commodities purchased. From this point Of view the proposition is in line with all modern financial methods As one and another discussed the ne- gotiations various suggestions have been brought forth some of them in- volying historic comparisons. More and more 1t is being understood that from the international point of view this is new method of materializing credit so that 1t may be made available in the purchase and sale of commodities. Research. so far as it has been possible to make it. does not disclose any other transaction in which two nations, or even one, secured from their creditors in foreign lands funds with which to pay their debts to these creditors, This aspect of the negotiations was un- , doubted1y first brought to the atten- 1 tion of France and England and to the l leaders of finance on this side of the | Atlantic shortly after the visit of Sir ! George Paish to the United States, as l representative of Great Britain, in the l fall of last year. During Sir Georges s | visit to this country momentous l changes began The banks of the Uni- 1 ted States had in cooperation, per- l fected two pools, the aggregate of l which was about two hundred million l dollars in gold and exported the money to Canada. American importers mer- chants and the city of New York were debtors at that time, that in that | sense the United States was debtor to l England and France, and especially to l England. We lent the money whereby this indebtedness could be liquidated. l If the banks of the United States could | within a month raise two hundred mil : l lions in gold to enable American debt : | ors to pay their foreign obligations it must have occurred to Sir George, and ! it undoubtedly occurred to Henry B, l DaVison, who went to London with Sir | George, that if the swift and enormous increase in our exports which began | when Sir George was here was to be | continued it would be possible for the banks of the United States to aid Eng land and France or Russia in financing ] payment for these exports.
 | After MT. Davison's return from Lon . 1 don in midwinter and after J. P. Nor | san's return, he having gone to Lon : don shortly after Mir. Davison came | back, and then once more after MT. | Davison's return from his second visit to London in the spring. many rumors prevailed-so many that it seemed | probable that some truth was con tained in them-intimating that Eng | land and France. either together or
 individually. might find it eXpedient
 to approach the United States with a
 view of establishing some method
 whereby there could be such speedy
 and satisfactory liquidation of indebt- | edness for commodities purchased here
 and such sufficient credit perfected as
 to make it possible to obtain bills of
 exchange, the favorite medium of pay | ment. at an approximately normal rat e
 There is now no doubt that the confer l ences at London and Paris in which thes,
 two representative bankers took part wer, the initial steps toward the consumma
 tion which was reached last week
 Another point of view suggested b,
 those who have been discussing thes
 negotiations is the historic feature of i
 or it's relation to the history of other grea
 transactions. It overmatches any one O
 the great loans made by the Rothschild
 to any of the nations of Europe. It il
 with single exception a loan greate
 in amount, much greater than the United
 States has ever secured at home. In Civi
 war days the government fioated loans
 some of them in excess of S100, COG, ,0O0 ant
 at somewhat frequent intervals If tn
 people of the north were able in abou
 three years time to absorb national loan
 aggregating about 5000 0OO. 900 then, it ha
 been suggested there seems to be no req
 son why the people of the United State in these days, when our resources ant
 wealth vastly exceed those of Civil wa days. should not conveniently and easil, absorb a joint and several loan to Eng
 land and France of $500, 100000. with whicl
 England and France will pay for com
 modities bought here.
 The government at Washington dit
 force a loan of approximately $450. 600 00
 in Civil war days. It was represented b,
 the so-caled greenback or legal tende
 note. John sherman, years later, sait
 of 1t that enormous this forced loai
 was greatly appreciated in it's relation to gold as it became, it nevertheless wal
 the turning point in the par and led t,
 the extraordinary industrial. commercia
 and agricultural activity which was on, of the striking phenomena of the latte years of the Civil war. It is the com mon opinion in the financial district tha the loan made to England and Franc, and subsequent loans which are likel, to be negotiated will, notwithstanding
 their great cost. prove of inestima bl commercial and industrial value to thos,
 countries as it certainly will to ou