New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1915-09-29
S5oO,ooo,ooo LOAN
SETTLED; BANKS
CLEAR S1O,oOO,OOO
Bonds Will Be Sold at 9S,
Yielding 5l2 Per Cent
to Investor.
DENOMINATIONS RUN
FROM S10O UPWARD
Mission, in Chicago. Find Middle
West Cautious Success OF
Plan in Doubt.

Sir Henry Darlington Smith, acting
for Lord Reading. chairman Of the
Anglo-French financial commission,
who is in Chicago. made the formal an
nouncement at the Hotel Biltmore last
night OF the successful conclusion Of
negotiations with American bankers
for the $500 900, 900 loan sought in this
country By the two governments. SIR
Henry made it clear that Russia would
have no part In the present loan.
The terms of the loan to the Amerl-
can investor appear somewhat more at
tractive than had been foreshadowed'
The bonds will be issued to the public
at 90, yielding approximately 512 per
cent to the investor. lr order to per-
mi. wide participation in the loan the
bonds will be issued as low as Sloo'
The .yndicate which is TO float the loan
will be centred in New York among
some forty banks and bond houses,
with ]. P. Morgan & Co. as its head
II will contract to purchase the loan
from the two governments at SO, which
means an allowance OF 2 per cent, or
S10,OO0,0OO
The issue of $500, 100000 will consist
of five-year per cent bonds, constitut-
ing a first lien on the French and Brit
ish governments. The investor has the
option, at maturity, of cashing In his
bonds or converting them into Az per
cent bonds of the two governments,
payable not earlier than fifteen, nor
later than twenty-five years.
Proceeds Employed Here.
Sir Henry read the formal announce
ment to the newspaper men in the com
missions suite at the hotel. Henry r.
Dawson. of ]. P. Morgan & Co., was
present and issued a statement for the
firm when Sir Henry finished his read
ing. The statement for the commits
sioners was as follows:
"The discussions between the Angie
French financial mission and the Amer
lean bankers have resulted in the for
nation Of definite plan for loan TO
the British and French governments, to
be issued in this country on a broad
and popular basis. The proceeds of the
loan will be employed exclusively in
America for the purpose Of making the
rate of exchange more stable, thereby
helping TO maintain the volume OF
American exports.
"The plan contemplates the issue OF
$500 100000 hye-year 8 per cent bonds,
constituting direct joint and several
obligation of the British and French
governments as regards both capital
and interest. No other external loan
has been issued by either Of these gov
ernments, apart from notes OF the
French Treasury TO a limited amount,
maturing in the next six months. The
bonds will be repayable at the end Of
five years, or convertible, at the option
of the holder. into an per cent bonds
Of the two governments, repayable not
earlier than fifteen years and not later
than twenty-five years from the pres
ent time by the two governments JOINT
ly and severally.
Syndicate to Handle Bonds.
"The bonds will be issued to the
public at 9S, yielding approximately
5h per cent to the investor. The work
of offering this loan will be carried out
by a syndicate, which Meessrs. j. +:
Morgan e. Co. and large group or
American bankers and financial houses
will at once set about 70 form. Sucn
group will include representative"
throughout the country. and all mem
bers Of the syndicate will be on pre-
cisely the same footing. This syndi-
cate. whose business it will be to ar
range that every investor shall have
an opportunity to subscribe to the is
sue. will contract to purchase the loan
from the two governments at &c."
Asked for further details in regard
to the handling of the large loan. sir
Henry said:
"This is the plan. Some Of the de-
tails. and the signing OF the contracts.
are still left open. While it will be
necessary to obtain Parliamentary ac-
tion in approval OF the loan, the con.
tracts can be signed in anticipation o:
such action, as there is no doubt as to
Parliament's approval
Tho British commissioner said tina.
England and France entered into the
loan upon an entirely equal basis.
Russia had no part in it, he said. The
dual governments will use the loan for
the purchase Of any materials in this
country. as they may deem it expedNnt
The Morgan statement read:
Denominations Low as 500.
ort. .ouuiSsion has made plain b.
its statement that 1t has determ mlned
condition in America. Il proposes to
meet these By issuing an obligation
which is without precedent-namely.
the Joint and several promise to pay OF
cA.4inu.d ON naxc 2. column