The sun. [volume] (New York [N.Y.]) 1833-1916, 1915-09-27
FINANCIAL REVIEW
OF THE PAST WEEK
Foreign Loan UppermOst in
Considerations Of Wall
Street.
BROAD RISE IN STOCKS

bbAN NV III ~ I
banking and business activities. Slower
progress seemed to he made last week
toward the arrangement OF an agree
ment with the Anglo-French finance
commission thar had been expected at
the outset of the week, but there was
no warrant for the continuous circula-
ton OF reports about bitches In the
negotiations, much less for the unscru-
pulous Misrepresentation OF attitudes In
our banking community toward the con-
templated operation.
Explanations of the deliberate course
o. the negotiations were furnished by
the immensely Of the undertaking itself.
No other money market. even ainong
the markets accustomed to the fotation
OF foreign loans, has ever been called
upon to consider such a vast single
transaction on a sheer business basis
As though this were not novelty enough,
the project under consideration Involved
from the start q great departure from
American finance. whioh has always been
a heavy borrower abroad and until very
recently a lender only on the most
trivial scale and In the most rasual
manner. Ignorance, prejudice and pro-
vinclalism on our side offered obstacles
which the ncgotiators have had to
eckon with and overcome. Not al. the
conferences and consultations have by
any means been concerned directly with
the points TO be settled in making such
a bargain as the visiting finance com
mission came here to propose, and
understanding could hardly be reached
on these points without protracted de-
bate.
our acceptance n week sgo or the
principle of an unsecured loan was fol-
l-.al t.n, 800 hNs "a ~ nhnfanNnnf IN Tho
part OF the foreign nesotiators In re-
spect to the amount, 80 that the under
taking could b. brought more within the
ompa of reasonable success. The
question OF price could not fail to cause
much argument. hut differences here
were not irreconCllable. The standing
Of British and French credit, conceded
In a loan without security other than
the joint and several obligations OF
the borrowing Governments, could not
fairly he taken TO mean that those ma
tons could place an exterior loan on
as favorable terms as their domestic
loans.
Little or no meritorious opposition to
the loan disclosed itself IN the last few
days. although there was al outbreak
of noisy ard violent a~ntagonlsm. prac-
tlcaily nil Of which evinced Interior mo-
tives by utter disregard OF our business
conditions and requirements. Much OF
the campaign Of obstruction was mani
testify and avowedly pro-German INC
mott OF the rest OF II was a response
to political ins!tgat!ons OF foreign origin
or association.
Attacks on the loan as a grant of
favor 20 the Allies were a simple absurd
ity. The provision Of credit TO some
OF our best foreign customers must be
chiefly n matter OF favor 10 ourselves.
Clamor against the loan as a c%Ontribu-
tion 10 the ~prolongation OF the war veiled
thinly an effort to facilitate a pax Ger
manica. but intelligent surmise would
not be wide OF the mark In assuming that
our failure to extend credit to such bel
ligerents as have access to our markets
must operate for a more protracted con-
nlct. II would merely compel them to
rely more on their own resources or the
resources OF markets less well equipped
than ours.
Some endeavor has been made to pa
rade the projected loan as a most hazard
Gus venture, but II there Is anything GER
tain II is that all the bell!gerent nations
will. at any cost TO themselves. strive TO
keep their international credit good so
that after the war they may have access
TO available funds for the reconstructive
tasks OF peace. This is the only country
1 " NV ~ iAs ~ - o nv IIA'' NAAAh
ing power in the future when credit, al
ready well established with us, will help
much. Incidentally, II might be pointed
out hat in the quantity OF our bonds and
stocks which will still be held abroad
after the war. there Is fairly definite Sc
CURLY for the grant OF foreign credit
wen though It does not figure directly
as collateral in any loan.
All examination OF the foreign loan
rAcnlxsAa tfQnlS dnu~n tn thu fant that -
will augment foreign buying power. The
stupendous figures OF the new British
budget, including the heavy tax burdens
which are to be assumed, suggest hat
the practices OF economy In the warning
countries will be increasingly enforced.
This economy will be less expensive 20
us II we do not encourage It by illiberal-
ity in our trade dealings. In turn our
exporters will be helped to trade II for
eign exchange is made more stable. and
the banking provision Of credit 20 carry
on part Of our external commerce must
have some such stabilizing result in the
foreign exchange market. II Will not
change the influence for weakness in eX-
change which is the consequence of a
diminished demand all over the world
for sterling bills, but II will work out
TO a smaller volume OF such bills and so
regulate the exchanges.
In order also TO remove some mis-
taken impressions the statement may be
made that the foreign loan negotiations
were not inaugurated to arrange for the
payment OF outstanding Indebtedness. De
spite our colossal export balances the In
debtedness OF our foreign customers II
all paid up. The recent trade statement
showed net gold importations Of s2l3,-
600, 900 this year TO the end OF August,
and such an extraordinary movement OF
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