Evening star. [volume] (Washington, D.C.) 1854-1972, 1915-08-01
FOREIGN LOANS MAY
! F|NDMARKET HERE
Canadian Notes Three Times
Oversubscribed, Offering
an Incentive.
FRENCH BANKERS PLAN
TO FALL INTO LINE
Revival of Talk That Great Britain
May Follow Suit-Large Credit
Piled Up in United States.

Piled Up in United States.
NEW YORK, July 31.-The great sue
cess which followed the Offering of $40
100000 Canadian > per cent notes in this
market last Saturday has raised the ques-
ton as to the ACCESSIBILITY of attempting
similar negotiations with other foreign
countries. These are not to be considered
as war loans. even We're it consistent with
our desire for strict neutrality to furnish
capital for any of the bellgerent nations.
On the contrary, whatever financing is
accomplished for European nations
through the machinery of American bank
ing institutions will be in the nature of
credits for the two-fold purpose Of pro-
curing American commodities for civilian
consumption. and of settling existing IN
debtedness, and thus helping to balance
the exchange markets.
Such was the extreme demand for the
Canadian notes that the books were closed
within few minutes after the opening,
the volume of applications being lar IN en-
cess of the amount of notes available 1t
is understood that ailotmentS We're made
to subscribers on the following basis: To
all subscribers for all amounts In excess
of $4,000, 100 per cent: to subscribers
for amounts from 1900 to $4,000, 90
per cent, and to all subscribers for all
amounts in excess OF S49,ooe, - per cent
The notes were indeed an excellent OPP
portunity for investors, insuring them q
3 per cent rate on their investment for
one or two years, and giving them the
option of converting into a twenty-year
investment at the same rate.
French Plan Loan.
1t is understood that the American
Tod ont <
with a group of French bankers for
the establishment of a twenty-million-
dollar loan to France. this to be in the
form of credit and to be applied to
commercial purposes only. The loan
will most likely take the form of &C
ceptances. which will be discounted at
5 per cent, the bankers receiving the
usual compensation for their guaranty
of the notes, and holding as security
an equal amount of American securities
now owned by French banks or in
vestors.
There has also been revival of dis
cussion relative to the creation of a
British loan in the United States, on
terms identical with those of the
French credit loan. Some of the Lon
don joint stock banks have approached
the subject and are understood to be-
lteve that it is the most feasible way
in which to secure a loan for Great
Britain in this country. 1t is a ques-
ton. however. whether it will be pos
sible to corral a sufficient amount of
American securities in Great Britain
for the purpose. Sooner or later it is
realized that it will undoubtedly be
necessary for the arrangement of a
loan in the United States by Great
Britain. because the heavy purchases
that have been made by that country
in the United States have resulted in
piling up very large credit balance
in our favor. The manner in which
such loan can be arranged has been
the subject of discussion by prominent
New York and London bankers for sew
eral months past. Prominent bank
ers state that the necessity for such an
arrangement at this time is not i'm
minent, although if the matter could
be satisfactorily arranged AT this time
IL might be desirable to do SO.
Trade Acceptances.
The new regulations of the federal
reserve board relative to trade ac-
ceptances' published last week have
been of the greatest interest to bank
ers and business men in every part of
the United States. The inauguration
OF this new system of trade paper will
prove boon to domestic business ard
long-felt want will thereby be filled
In order to popularize the new paper it
fs also provided that district federal re-
serve banks may establish a rediscount
rate somewhat lower than that prevail
ing with the regular commercial paper
and one bank tthe New York Reserve
Bank) has already announced a special
!. per cent rate. Business men are now
advocating wider use of the new trade
acceptance as a substitute for notes, or
for the open account in commercial
transactions The European countries
have for many years adapted the ac-
ceptance system to their business transac-
tons with excellent satisfaction.
In the United States. under the sy.-
rem heretofore in most common use, the
seller OF goods has in reality been the
involuntary banker for the buyer &C
cepfing his note in payment, and assum-
ing all responsibility for the negotiablity
OF that note. Sixty or seventy years ago
domestic bills were more widely used in
the United States than at present The
change was then made to the system pre-
Saliing in recent years. which is not in
vogue elsewhere, with some exceptions
In Canada The wider use of the domestic
bill will depend, as a rule upon the attf-
tude of the bankers, who will govern the
practice by the fact as TO which kind of
paper they make most profitable 10 the
business man. The draft, il is recognized
makes a heater transaction and tends to
give the lowest rate of interest to the
borrower at the bank, as the accented
draft can be discounted at smaller in
terest- On the other hand it is found that
in some instances the American business
man likes the discount that he is able TO
get on the open-account system.
Western Business Conditions.
Quite naturally and inevitably cur
rent business conditions vary with the
prospects of the war, and this uncer-
tainty breathes hesitation in business
circles. With this qualification, how
ever. business conditions could not be
better. AT the outbreak of hostiIities
year ago everything was thrown into
panic and business went to smash
Within d few months from that time
there was very decided recovery and
mat improvement has continued stead
lily up to the present time.
Passing to financial conditions il
might be remarked that the banks. es-
peciaNy in the west are in n very
strong position with respect to de
posits and that their balances are CON
tinually increasing -~f.inlv the crou
outlook could no, ,1 better, and there
is promise of large increases through
Improvement commercially ii may be
remarked that, conditions are now
again at re normal level
Scuthern Conditions Izxp1r1ng.
g. Davies Warfield, chairman of the
board of the Seaboard Air Line rail
way, who has just ended Il trip throue h
the produce belts in the south, is not
worried about conditions in that sef-