The sun. [volume] (New York [N.Y.]) 1833-1916, 1915-07-03
BRITAIN HERE FOR
~$SOO,OOO,OOO LOAN
Some Bankers Think $780,
600. 600 Credit Would Meet
More Assured Success.
INTEREST AT PER CENT.

ish loan OF between 100000 900 and
$500, 900, 900 in this market are being
conducted between New YORK and Lon
don bankers. 1t was learned In high
banking circles yesterday. The loan
VIII be foated here to offset the depre-
citation In sterling exchange. The pro-
ceeds OF the sale of the British bonds
viii be devoted to the purchase of war
munitions. foodstuffs and other supplies
in the United States. The duration OF
the loan has not been decided upon as
yet, but IL will probably DC from three
10 ten years. II will have no connec-
tion with the great British var loan
OF SIS, 900. 600, 900. which pears "A per
cent. and which was brought out re.
GENTLY.
One of the features which will make
the loan particularly attractive to
American investors Is that 1t VIII be
free Of all British income tax and. IN
addition, will not be allowed to depre-
ciate through the placing OF any other
British loan here or abroad Mt a higher
lnteTeNt rate, IL DciHs p''Ni"e' ~"
should higher rates prevail in any other
loan the one now being negotiated shall
have conversion or other favorable
privileges. The loan WILL probably bear
interest at the rate Of D per cent,
although 1t may be higher.
In some banking circles 1t Is felt that
$500, OOO. 900 may be too large a loan
to be brought out in this market at
present, and that a loan OF 500, 600, 900
would meet with n much more favorable
reception. Ii is believed that Henry
p. Dawson of ]. T.. Morgan & Co., who
sailed for London not long ago on a
mission which has been surrounded with
considerable mystery, is working out
final details of the plan with the Brit
ish bankers. 1t will be remembered
that when j. 2. Morgan went to London
. few months ago he returned with a
commission for his frm. making it the
commercial agent Of Great Britain In
this country.
The National City Back circular,
which was made public yesterday,
pointed out the probability OF the es-
tablishing OF great credits In this mar
ket and said that II was not improbable
to suppose that credits a~ggregating
$40 0 .00O. 900 might be placed here.
The BANKERS most interested in the
sOatiit6 Va t"o io"h ~ th'S >Se
understood to have sounded the bond
m Investment houses thoroughly on
what they felt the reception OF the Of
fering would be. II is understood that
the opinion in banking and investment
circles ID that the loan ought to meet
with a favorable reception, especially as
II will be issued free OF all British in
come tax. The feeling Is that there
will be a large individual participation
in the offering. but that the greatest
purchasing movement will come from in
situations. insurance companies and
trust funds. 1t Is not believed that 1t
will be a great popular loan. but that 1t
will have more the nature OF a bankers
loan.
1t is known that the bond n invest
msnt houses of the financial district are
practically marking time while waiting
for this loan. not only that they may
participate in II but also that they may
zee just what effect the placing OF n
British Government loan here at a rate
CT 6 per cent. or more will have upon
investments OF capital in the future. 1t
Ia felt in banking circles that the effect
will be to Increase the cost of capital.
Prominent bankers and foreign ex-
change men a been saying for some
time that something must be done o
to stop the decline in the rate OF sterling
exchange. II has been confidently ex-
pected the step taken would be the es-
tablishing OF a great credit. Unless the
decline in sterling exchange were
checked exporters here would refuse to
accept settlement in deprecated ex-
change and demand payment in gold or
they would mark up the price of their
commodities. Either of these steps
would injure merchants and exporters
here as well as seriously affect the pur- |
chasing owe of England and her al
lies in this country.
II Is felt in banking circles that n
three year loan would be the sort to be
most popular with the Individual in
weston. but that a loan Of from five to
ten years would meet a much heartier
reception among the banks and institu-
tions which. II Is felt. will be the heav-
lest participants in the financing OF
Great Britain in this country. Should
England agree to the terms of bankers
here and place the loan free of all Brit
ish income tax 1t will be the first Eng
lish loan not subjected to the income tax
since that tax was devised.
During the Boer war England brought
out two war loans here. The first met
with an excellent reception and the
second was heavily subscribed to. Just
about the time that the floating Of the
second loan was completed the investors
in the first began to receive their
OupOH MINUS u HedVy income tax col
lected at the source. As a result there
was a great deal OF disappointment ex-
pressed. The new loan. when placed here
free Of all income tax, will not be
negotiable or salable in England.
which will prevent English investors
from talking any part OF it and thus
escaping payment OF the income tax.
Foreign exchange rates were generally
frmer yesterday. Sterling closed at
as 5-l6 for demand. unchanged from
Thursdays Anal price. while cables were
slightly lower at 4.77L. as compared
with Az 5-l6 on Thursday. Francs
were unchanged for checks at 5.65, with
cables quoted at 5.64la, against 5.64 ON
Thursday, Marks We're quoted at 81 5-l6
for sight drafts and 81 7-l6 for cables. |
This res with 81 3-i6 for drafts
and SIX for cables on the day previous.
Italian lire advanced from els to 6.l2,
while Austrian kroner were unchanged
at 1910.