The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1915-09-14
ALLIES ASK BILLION.
Propose. Gigantic Loan With Bonds as
Only Security.


New York, Sept. 14.-The report
that the Anglo-French financial COM
mission contemplated borrowing a
billion dollars here without collateral
of any sort and solely on government
overshadows all other topics in the
financial section today.
Heretofore the opinion has pre-
vailed that Great Britain and France
would secure the proposed mammoth
loan by American securities, dollar
for dollar, or by some other accept
able form of collateral All calcu-
to the commissions arrival here had
been based on that assumption.
The reported plan of the commits
sion providing for straight loan,
sensation of the year in the New
York financial district. 1t was the
consensus of financial opinion that
the commission would find its task
tremendously more difficult than
would be the case were the proposed
credit loan secured by collateral of
American bonds and stock, as at first
suggested.
q. S. Neutrality in Question.
Whether a strict Interpretation of
American neutrality would permit the
issuance of a straight commercial
loan on bonds of two of the allied
siderable conjecture. The belief pre-
vailed that the administration at
Washington would not interfere.
While this opinion was almost uni
versally held, no one could be found
to stand sponsor for a public an
nouncement to that effect, nor was
anyone apparently willing to say
upon what the opinion was based. In
brief, the reported plan of the COM
mission, so far as it could be called a
plan in the present somewhat nebu-
lous nature of the commissions pro-
gram, was as follows:
The establishment here of a
mammoth credit loan, from the
proceeds of which would be paid
all bills for exports to Great Bri-
tain and France, and probably
Russia.
To fix the amount of this loan
at as nearly billion dollars as
possible.
| The commission itself declined pos
itively to discuss the report that this
was it's plan. Lord Reading, its chair
man, in the only statement he has
made since he landed here, did not re-
| fer to it, but confined his remarks to
a general review of the situation as he
t saw it and to a recital of the reasons
why an adjustment of the present for
| eign exchange market was desirable.
Can Buy Elsewhere.
In case the commission should fail
| in it's plan, it was said wholesale cur
tailment of American exports would
ensue. There is nothing, it was said,
that Great Britain and France buy
/ mere lQdl la6y COulO not OBTAIN elSe-
where with the exceptions of NUM-
lions of war. These they were pre-
pared to pay for in gold, if necessary.
The outstanding feature of the stu
alton that overshadowed by it's ire
lnendous Importance everything else
| that has Influenced the foreign ex-
| change rates since their recent slump
began, was the reported plan of the
commission to establish its hoped-for
credit here without offering any col
| la VI n a
ciers who called on the commission
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
a huge collateral, dollar for dollar, for
the loan, composed of approved
American securities, were startled by
| the radical proposal that the money
should be borrowed absolutely with
| out collateral
Some Financiers Startled.
Other fnanciers 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 basing the proposed loan on
| American collateral as to have re-
quired time for consideration before
they could express their views. Still
other financiers were prepared for the
| proposal and were not surprised.
/ These bankers, rejecting the reported
views of the commission, pointed out
that the entire credit of both Great
Britain and France would be back of
the bonds given for the loan-a cred
| it that for generations past has been
regarded as good as gold. With the
governments of both nations standing
back of the bonds, why, it was asked.
should there be required additional Sc
curity?
Bold Plan Shock.
Generally the commissions reputed
plan came as a distinct shock to the
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 whis-