The sun. [volume] (New York [N.Y.]) 1833-1916, 1915-09-29

to pay Of Great Britain and France.
To this 1t has attached terms which
mean a Yield to the investor OF almost
De per. cent. per annum and carry
with them "A conversion privilege cal
cnlated upon the return OF normal
conditions to prove Of distinct value
to the holder of this bond.
The interests of the small investor
are also consulted In the decision
which the commissioners have arrived
at to issue the bonds In denominations
as low as 800 and to allow sub
scribcrs to make instalment payments
on the loan. 1t is to be noted that as
the commission has stated, this IL an
external loan, free from all present or
future English and French taxes.
II Is proposed by the commission
that the proceeds of the loan be ham
died so as in no way to disturb our
W money markets. and to that end
the general plan will be to leave the
cash realized from the bonds on de-
post with banking institutions which
become members Of the syndicate
throughout the United States. This
proposed loan may in fact he consid-
cred as an arrangement made by
American commercial and agricultural
interests with their regular customers
to accept deferred payments covering
commodities purchased.
international m necessarily
Involves at times the extension ot
credit by the selling nation TO the BUY
Ing nation. The agricultural. manu-
featuring and financial interests
should welcome the opportunity to en-
tend credit to any solvent customer
where the extension OF such credit tut-
theirs American trade.
Needed to Prescry Trade.
The normal export trndc OF this
country to Great Britain and France
runs into many hundreds Of millions
of dollars annually. To preserve such
trade under the existing abnormal
conditions We believe the proposed
arrangement to be imperative and ac-
cordingly we and the many banking
Institutions and financial houses that
will be associated with us will act as
managers without compensation.
When the statement was made public
at the Hotel Biltmorc last night by Sir
II. Darlington Smith. Henry T. DAWSON.
OF j. T. Morgan & Co. was present The
British banker was disposed to answer
questions as to what had been definitely
settled. MIR. Dawson was equally frank.
One Of the first questions asked was
as to the participation Of Russia in the
loan. The reply was that Russia did
not appear as a party or a participant
Another question was in regard to
munitions. The answer was that the
money was to be used exclusively Tor
the purpose Of stabrlZing exchanges ;
that is preyentlng bills drawn on foreign
countries from depreciatirg. This meant
all bills that might he drawn. II would
include the what bills and the cotton
bills as well as bills on manufactures
1t has not yet been decided definitely
how many payments will cover the loan.
They are to be arranged for upon a cal
culation Of how often they will be
needed. 1t was explained that IS per
cent. might be required with the sub
scription, or more or less. These SUBJ
scriptions are 10 be mad at any one
OF the banking centres of the groups
In the syndicate. The money thus held
by the designated depository will draw
the usual interest of . per cant, which
Will go to England and France.
While the interest and principal OF
the loan are 10 be payable In American
dollars at New York. 1t has not yet
been definitely decided whether there
will not he branch cities designated
for such purpose. il was apparent
that this will depend largely upon the
subscriptions A great sum paid for
bonds by numerous investors In one sec
ton would make 1t advisable TO pay In
tsrest and principal direct in that 10
cality instead of through New York
with New York checks.
The syndicate which Is TO handle the
great loan Is well In process Of organi'
zation. Already II has been definitely
decided to have groups in Boston, Phil
adelphia. Chicago, Pittsburg. Bal,imor.
and st. Louis. and perhaps In New Or
leans, Minneapolis. Omaha and severa'
other cities. 1t is intended to have
group in every centre of the country
where one can be organized.
Forty Already OTcr to Join.
New York city will be the centre 81
the groups. so far forty banking institu'
lions have sIgnihed their willingness t.
Join. This includes not only nationn
banks and state banks hut powerful
private banking institutions.
The amount Of all subscriptions vii
be t~abuiated In this city.
Subsequently syndicate managers Il
carry out the purpose OF the loan on be
half Of England n France and t
carry out also the agreements of III
American syndicate managers will b
chosen by the syndicate and by the tw'
countries. These managers, according
TO the J. +. Morgan & Co. statement
will serve without compensation.
II was said In the financial distric
yesterday hat the personnel OF the New
York group would be Il great surpris'
to many who have ventured TO
various bankers as opposed to.the lean
With Russia eliminated III IRE was tn
general expression of belief In Wal
street that Kuhn. Loeb * Co. would b
members. After the visit of Pierr
Bark, Russian Minister OF Finance, =
Paris, and then to London, without ap
parent result there came a change i
the attitude of many bankers ia Ncy
York who have no love for Russia, l
was regarded as significant yesterda,
that Jacob ii. Schiff visited the banking
house Of J. 7. Morgan & Co. and ha'
a talk with Mr.. Morgan. 1t was ais
thought to be significant that Otto II
Kahn visited the Biltmore later In IN
evening after the statement was give
ont. Mr.. Kahn declined to say a WORD
1t could not be told yesterday no,
soon the first payment on the loan woui
10 available for the purpose OF settlin
! the exchange market. Several very i'm
portant steps are first to be taken.
1t will require an act of Parliament /
England and a proposition of law
France. IL was said last night tina
these measures Would be rushed throug
at once, but that even with a suspensio
OF legislative rules this would requir
several days, Thereafter the commits
sioners Of the we countries, in all like
lihood the members of the present mis-
sion, VIII have to execute "A forma
agreement with the American syndicat,
which will act through "a committe
which II will designate. For these res
o no time could he set last night 70
the completion of the ina formalitie.