The Birmingham age-herald., 1915-09-14
Purpose to Use Straight British and French Gov ernment Notes Without Collateral
THINK WASHINGTON
 WILL NOT INTERFERE
 ON NEUTRALITY PLEA
Scores of Prominent Bank CTS From All Sections of Country Visit the Com
 missioners in New York

New York. September 1a-The present plan of the joint Anglo French financial commission, it was reported tonight, is to borrow s1 1,oOo, o,ooO 600 in the United States on straight British and French govern ment notes without any collateral. If this vast sum of money is obtained, 1t was said, it is to be spent, the last cent, in the United States for wheat, cotton, meat and other commonly ship ments, including munitions of war. It will therefore, in the opinion of finan- cial authorities be classified as a com l mercial loan.
 Whether the neutrality of the United States would be questioned, in case the bankers financing the loan should &C., cept straight British and French govern ment notes as security, has been given serious consideration. It was said finan- ciers familiar with the plan had every req son to believe Washington would not interfere .4 That was the unanimous opinion to- night of many of the scores of promi- nent bankers from New York and chief cities of the country, who have visited the commission at its headquarters here during the three days of It's stay in this city. As to it's correctness the mem- bers of the commission declined to com ment. All the commission cared to pub fish as authoritative was voiced by Lord Reading. the chairman, who said:
 Studying Conditions We are not in position to make a statement at present, because we are studying the conditions in New York and elsewhere in relation to American ex- change on London and. Paris. We have received considerable number of per- sons, prominent bankers and other gen. tlemen interested in the stability of ex- change.
 The one thing that is very striking about it is that everybody is agreed, as one would expect in the great import ancc to be attributed to regulating the exchange so as to provide more stable conditions
 The sudden and considerable drop in the exchange naturally disturbs and must disturb commercial relations between the countries-the United States and Great Britain and France-ina smuch as it makes 1t so difficult to see ahead what the rate of exchange will be; and, more-
 
 material difference in the prices to be received by the American and the prices to be paid by the Englshman and the Frenchman.
 There is a consensus of opinion that it is eminently desirable that some step be made by which stability of this ex- change can be secured You have here in the states very large surpluses of foodstuffs and other material which you want to export. We, on the other hand, want to import these goods, and to the commercial man nothing is more diff cult than to arrange fixed prices when there is the instability such as we have had recently in exchange.
 We cannot say more than that at the present but that generally reflects our views on the situation"
 Aside from the financial situation, Lord Reading announced that this mis- sion to the United States had nothing whatever to do with the adjustment of any legal questions between this country and Great Britain, as had been reported.
 To Establish Credit
 The outstanding feature of the situa- tion that overshadowed by it's tremend- ous importance everything else that has influenced the foreign exchange rates since their recent slump began. was the reported plan of the commis-
  here without offering any collateral. Some financiers who called on the com mission with vague or pronounced ideas that Great Britain and France would not only give their notes for whatever sum they would borrow. but would put up huge collateral, dollar for dollar of the loan, composed of approved American securities, were startled by the radical proposal that the money should be borrowed without collateral.
 Other financiers were more than startled. The novelty of the plan is said to have so taken them by sur prise and so quickly shattered their idea of passing the proposed loan on American collateral as to have re- quired time for consideration before they could express their views. Others were prepared for the proposal
 These bankers. reflecting the re- ported views of the commission, pointed Britain and France would be back of the bonds given for the loan--a credit that for generations past has been re- garded as good as gold. With the gov- ernments of both nations standing back of the bonds. why, 1t was asked, should there be required additional security?
 Financial World Shocked
 Generally. the commissions reputed  financial world. In all the talk that has preceded the commissions arrival here and in all the gossip that has fol- lowed it, there has been only whisper, now and then, that there would be an attempt to finance loan of such man. moth proportions. or, in fact. any loan at all, without offering collateral. FL nanciers even have gone so far as to say what collateral would be accept able and to express doubts ds to whether anything but approved Amefi- can securities. now held abroad and to would suffice.
 It is to be a loan without collateral of any sort or no loan at all-that is the present plan of the commissiop. at least so far as the American financiers visiting-it have been able to learn.
 Here Is the reported attitude of the commission, as gathered by bankers
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