Evening star. [volume] (Washington, D.C.) 1854-1972, 1915-09-20
HUGE SYND|CATETO
UNDERWR|TE LOAN
viii Comprise Banks and
Trust Companies From At
Iantic to Pacific.
ENGLISH POUND STERLING
BOWS TO AMERICAN DOLLAR
Many Prominent Bankers Claim
Loan Should Not Cover Munitions
Purchases by Allies.

largest underwriting syndicate the
western world has ever known was In
process Of formation today to handle
the proposed "billion-dcllar" credit loan
to Great Britain and France. which has
now shrunk, 1t was reported to q sum.
yet to be determined between $500. .000,-
900 and $so0.0oo.0o0.
This mammoth syndicate, according to
tentative arrangements said to have
been agreed upon. will be nation wide in
it's character and comprise national and
state banks and trust companies from
the Atlantic to the Pacific. A number
of so-called pro-German hnanciers, 1t
was reported, will join the syndicate II
it be finally agreed tn: the proceeds
of the big loan shall be available only
for commodity exports and not for mu-
nitions of war.
Mortgage on France and England.
The price at which this syndicate will
put out the British and French govern
ment bonds which will be issued to Sc
cure the issue will be par. The bonds
will pay per cent interest and will
be a first mortgage upon the entire
British empire and France and her col
onies. All other obligations OF the two
nations will be subordinated to the pro-
posed big bond issue here. Even the
staggering sums raised by bond Issues
at home, with which the war has been
carried on. will come second to the loan
to be loated here when the time comes
to pay the principal
Bonds Payable in American Dollars.
For the first time in history the Eng
fish pound sterling has yielded first
place in international finance to the
American dollar in this respect The
whole big issue of bonds will be pay
able in American dollars. principal and
interest. For generations past Great
Britain's bonds have been payable only
in sterling.
The bonds will run five years, or ten,
it is not yet known which.
In agreeing to have the issue handled
by an underwriting syndicate. the
Anglo-French financial commission.
loan. apparently has deferred to the
views of American flnanciers, the orig
na1-fntentiou of the commission hav-
ing been reported to provide for gem
era1 subscription to the bonds without
the underwater as middle man.
n Many Banks to Form Syndicate.
AS soon as the definite terms of the
proposed loan shall have been agreed
upon in their entirety bank and trust
companies throughout the country. 1t
is understood. will be invited by gem
eral announcement to become parties
to the syndicate Of underwriters.
1t is not known how many such
banks will be asked-possibly as many
as care to come-but it Is regarded as
certain that the membership Of the
syndicate will consist Of hundreds OF
institutions. and possibly thousands.
Banks to Receive Small Profit.
These banks will be given a small
profit on the transaction, somewhere in
the neighborhood of one-half Of / per
cent, 1t is believed. Upon this point there
had been marked divergence of views,
the commissioner previous reported
attitude having been that bankers and
investors should pay the same price Tor
the bonds.
A great many American bankers, it is
said, demurred to this on the ground
expense in handling the bonds. and that
reasonable return Tor their trouble was
no more than equitable.
Conference Continues Today.
The next big question to be settled,
it was said, was whether munitions of
war should be paid for out of the pro-
ceeds of the loan. The commission is
said to believe that the loan should
cover munitions: q great many Ameri-
can bankers think 1t should not. The
merits of the often-discussed matter Of
whether it is right or wrong to ship
munitions abroad do not, 1t Is said,
enter into the question. What does en-
ter vitality into the consideration OF the
matter it is reported, Is the attitude OF
certain banks which would oppose the
loan should it cover munitions ship
ments, but whose opposition would be
converted to support in case the big
fund provides payment only Tor COM
modities other than munitions.
Upon this and other minor details the
commission and American dnanciers
continued their conferences today.
Still in a Tentative Form.
CHICAGO, September 20.-George M
REYNOLDS, .esident Of the Continental
and Conn b ial National Bank. who
was in New York last week in con-
nection with the loan which France
and England are seeking in this coun-
try, returned to his desk today.
II don't know whether the loan will
20 through or fail: / don't believe J.
Pierpont Morgan himself knows" said
Mr.. Reynolds. .The deal is still in
tentative form. IL 1t may be said to have
assumed any form at all SO far. The
sentiment when I left, gathered from
informal conversations with other
bankers. was that II loan. were made
dollars, and that 1t should be applied
to the purchase of products other than
straight munitions of war"