New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1915-02-04
ENGLAND HOPEFUL
OF AMERICAN AID
Expects New York Bank
ers to Help Her Float
Big New War Loan.
f1OO,OO0,000 MAY
BE OFFERED HERE
Borrowings Growing Too faSl
To Be Absorbed in Entirety
bv Home Investors.


Recent advices received from Lon
don in the local financial district IN
dicates that when Great Britain brings
ont her next great war loan, in July,
about 500 900 900 OF 1t will bee offered
10 American investors through y. /.
MORGAN & Co.. or syndicate '"aoea
bv that firm This in spite of the
prevalent belief that direct loans 10
belligerents were put out Of the cue
ton bv the administration attitude
last August toward tie proposed
French loan Of Sl00,O00,OOO.
On January IS il was announced
in London that J. p. Morgan 4 Co.
had been appointed commercial agent.
for the British government. L.''.
since then ejaculation has run high
m Wall street over the probable scope
Of tho firms operations Bankers. DO
default Of definite information here,
have bcseiCed their London CORE
spondeuts for the facts. Lately
they have been getting some interest
inr replies.
II is pointed out now that the ad-
ministration BY no means LAID down
hard and fast rule concerning loans
10 the warning powers, when IL re-
fused to give positive support 10 inc
French loan proposal. and that since
August, when that was under discus
sion. il has sensibly modified Its
attitude. While at first Secretary
BRYAN said that loans to nations at
war were inconsistent with the true
spirit of neutrality, in the middle OF
-
mert from the administration TO the
effect that American bankers, lndiVldn-
ally or collectively, we're free to make
loans to individual nations. The re'er-
walton was made that when such
transactions we're submitted 10 the
President he would not favor them;
but that "the President would not
take cognizance Of loans that were
made without consulting him" This
last i'm recognition OF the fact that
international law and custom do not
forbid such loans, but support them.
As bankers see II, the French loan
di sous ion was a thing by itself, and
the Morgan firm, in defcrrrng 10 the
opiuion of the administration IN that
case. imposed no limitations on ITS own
future actions. The fact that the firm
was willing TO accept appointment az
commercial agent for the British
government and has already organized
a department Of about 100 employees
20 buy supplies for its principal
tends to confirm, II is pointed out,
the belief that later it will act as
financial agent and help place the war
loans.
The British war loan in December
was for f350,000000 al 2 per cent,
issued at 95. This loan as conse-
quence produced, allowing for brokers
approximately E32O,OOO,OOO
and pays the investor 3.S per cent.
II will run the government until July,
and on July 1 another loan will have
20 be made. This new loan will be
20 run the government until January J.
1916. On account of the additional
heavy expenses occasioncd by the
greatly increased army and augmented
navy, the next loan, It is calculated,
will have to produce at least
c4OO, 100000.
The first loan is already selling in
the open market below the issuing
price The next loan will have 10
bear higher interest and be put out
at lower price. The government, II
is said, hopes to be able to float a
loan for si5O,O0O,OOO at per cent.
issued at 90. As alternatives, il is
GA5O,O00.000 Az per cent
at 90; $500 100000 per cent at So;
$500, 100000 Az per cent at 30.
the main idea being to produce
$3.50, 900 goo
1t is considered improbable that the
entire loan, whatever figure Of these
may be chosen, can be floated in
london, or in one block. So Il il
planned 20 issue the new loan in two
blocks Of equal sums, the first 20 be
put ont on July / and the second on
October l. In both cases il is said 10 be
the intention Of the government to
offer any sum up 10 Gl00,000,0O0 from
each block in America. and presum-
ably through J. p. Morgan & Co.
British government officials believe
that the war will last nearer four
than three years. Their argument rs
that in our Civil War il took the
North four years 20 starve and beat
the South into submission, and that.
TO take their own case, Germany hav-
ing vastly superior resources TO those
of the Confederacv in 1860, the Allies
task. even allowing for the greatly in
creased cost Of war, must be quite
as long.
In one year Of the present war
England will more than double her
national debt. adding fS5O,OOO,OOO TO
300 100000, but it is said that she
will continue until minimum of one
fourth Of her revenues is given 70
paying the interest and amortization
of the war debt. In the Napoleonic
wars she gave one-fourth of her an
nual income in subsidies to her
allies.
At an average rate OF 4 per cent
the interest on the war debt at the
end OF this year will be s34,0OO.OOO
a year. In two years il will b.
$50 900 900 year. In four years the
interest charges on the war debt will .
be so colossal a. practically 70 wine
out budget OF last years size -
G20G, 000,000 taking into calculation
the increasing interest rate and lower
ing issue prices. This ignores any
provision for sinking fund TO
amortize the debt /
England foresees in the event Of n
four years war a budget Of az least
$500 100000 year