The Birmingham age-herald., 1915-12-14
Government Will Undertake to Gain Control of Cana dian and U. s. Securities Held in England
WILL BE USED TO
 MEET LIABILITIES INCURRED HERE
The Holdings Will Not Be Dumped on Market. Value Between S1, 300, ,000,- 900 and $4,000,000,0 900

London. December 13.--After an expla of the exchequer, and short debate. the House of Commons tonight passed the second reading of the bill empowering the government to mobilize American and Canadian securities, by purchase or by borrowing them, to be used primarily as collateral for loans, or if necessary, to be sold to meet Great Rritain's liabilities in the United States.
 The scheme is an entirely voluntary one and the chancellor explained that the gov ernment had no intention of swampng the American market with securities. which would be unfair to holders here, as they were to be paid for at the mar l ket price.
 Mir. McKenna explained that the usual trade balance in favor of Great Britain had been exhausted by the huge demands l upon America for goods for England and her allies and the amounts paid in inter- est on foreign securities held here, or earned by British shipping, were not suf- ficient to set this right Consequently in order to meet liabilities in the United States they were obliged to go outside the ordinary course of trade and had to borrow or sell securities.
 He estimated that the securities held here were valued anywhere from 300,00O,0oo pounds sterling to soO,o0oooo pounds ster- ling (sl5oOooo0oo to s4.oeo.oOoooo. and ex pressed the hope this would be sufficient l ...L r. Ist -l .f.s4 .t.. exchange in the United States for the period of the war.
 1 BILL GENERALLY APPROVED | The bin met with general approval al : | though David Marshall Mason doubted whether the scheme would affect ex- change, while Frederick IT. Booth hoped the government would assist traders who
 had to meet liabilities in America and that these transactions will not lead to New York replacing London as the finan- cial center of the world' 1 Replying to the question of Sir George
 Younger as to whether the government i intended to confine itself to borrowing | In America upon the securities 1t would acquire, Edwin s. Montagu. financial sec
 retary to the treasury speaking for
 Chancellor McKenna. said that the gov ernment certainly did not propose to con- fine itself to either borrowing or selling. Regard must be had to the position of affairs Tn America and the government proposed to do in every case what seemed
 most advantageous for the object in view
 ! Asked if securities to the amount Of { E100.000, GOO were offered in the next fort night would the government purchase them, Chancellor McISenna said that the government would be prepared to do so. | but he did not anticipate anything of the
 kind.
 Mr McKenna assured the House that | whatever steps were taken under the
 mobilization plan every care would be ex-
 ercised to avoid anything that would af- 1 feet the American markets inimically or
 be detrimental to American financial in- terests
 ! 'T have conferred with insurance and trust companies which are large holders | of the desired securities he went on.
 They fully approved the plan. X
 PURCHASE PLAN Purchase seemed the simplest and best
 course where the holder of American or Canadian securities was in position to | sell outright
 | The chancellor said the government had | gone over the ground fully and believed the securities available would be suf- ficient to meet all liabilities and give the needed support to the exchange market as long as the war lasts. He was un- able at the time to give the total amount of available securities now held in this country or the length of time necessary to bring about their absorption in the United States.
 In the case of unquoted, or unlisted se- curities or of any whose current quota tion might not be regarded as repre- sentative of the true value the chancellor explained the price will be fixed by agree ment with the person offering them The | New York dollar price will be reckoned in sterling on the basis of the exchange rate of the day.
 MOVE NECESSARY I Anticipating criticism of the scheme as too generous, Mir McKenna said "The offer to give British credit in ex- change for American securities Ut cur rent market prices can only be justified by the absolute necessity for mobilizing our American securities in order to make them of the utmost value to the nation as whole.
 While American securities today have a good price. it Is true that British se- curities-owing not to any failure Of credit but to our having such large demands to meet-are comparatively low
 Mir. Mc<enna turned to the details of the second part of the scheme. namely, 1.-the provisions for borrowing securities whose owners were unable or unwilling to sell.
 "'rhe treasury will accept such securl- ties on deposit subject to the right of lpurchase," he said. "The securities will
 be transferred to the treasury for . period of two years from the date of transfer and the lender receive all in-
 terest plus one-half of one per cent caf- lculated on the face value of the securi- ties The treasury will sell the securi-
 ties at any time on a request from the ldepositor and pay the proceeds in sterline at the exchange rate of the day. or the lender may make his own arrangements for the sale on condition that the pro (COntinued on Page Nin@