Bismarck daily tribune. [volume] (Bismarck, Dakota [N.D.]) 1881-1916, 1915-09-16
Support of Normal Exports
Is Object Of British Credits
Payment on War Contracts Is Incidental in Negotiations With
British and French Finance Comm1ssions-kxpo1t OF Gram,
Cotton, Provisions and General Manufactures the
Great Consideration.
COUNTRYWIDE PARTICIPATION
ESSENTIAL TO SUCCESS OF THE PLANS

~ 0ONN00o w AK A0&3@SA
ment o., value bills drawn in sterling
and franc exchange.
War 1aint Hazardous.
II the loan goes out az an Offering
OF the war agents Of the British gov
eminent, j, IS pointed ont, if it is put
forward as a Wall street proposition:
or even if it has the appearance OF z
GistinctiYeiy Nex York trarsacticn
It's success is bound 10 be jeopardized
Some OF these bankers have can
vassed interior banks rather carefully
I They have found out through them
t.lat a 7oEg term loan, a twenty OF
thirty year s1o1d issue OF either the
I-:ti.h or French government, OF
both, would not be likely to attrac,
the american investor. It would De
necessary for such a l"an 10 bear in
terest at 5 per cent OF more, be e1'
enpt from foreign income tax and be
payable in dollars. These = tenn:
that the British bankers and gov.
eminent officials, who still regard
sterling exchange as the prime me
dunn, would not be disposed to &C
cepr. But apart from their inclina-
ton the chances OF its success in this
country would be small. The loan
would bear a war faint and the bonds
he considered by conservative bank
ers as infe-i1T to a cor Of issues OF
home securities with an income yield
CT approximately s per cent
Short term obligations, that is.
Noes Issued principally for the pay
ment O. normal exports, according t.
this bankers canvass, would find a
ntic-i more willing market among IL
terror bankers and financial insticu-
tons and with the investing pubic.
Such notes might take the shape OF
two. three or five years treasury
bills, yielding at least 5 per cent and
exempt from foreign income tax and
secured ny the credit OF the foreign
governments alone. or the loan
.ria..t he trea-lry bills in part, and in
part notes Sc cured by foreign hoi>.
irgs OF American stocks and bonds.
1t mfg.lt in part consist Of short time
bills from the great joint stock banks
OF London, such as would be accept
abe here for %rediscount in all banks
of the federal reserve system. Or it
might be in Fart an obligation Of the
Dominion ct Canada, such as the Dom
inion government loan fioated in this
country in July.
a Stable, Loan.
There is a multiplicity Of sugges-
lions OF the form in which the credi;
arrangements might be successful.
But all OF them are based on the pro-
position that the credit muss be under
stood as designed tor promotion OF
normal commerce between this coun-
try, Great Britain and France; that
the amount must be grea: enough to
act as a faith cure, as die the s100O,-
100000 gold pool organized here last
year as security for our then indeot-
edness to England, and that partici-
patton in the negotiations be taken by
bankers the country over.
Result Of Failure.
The counsel of conservative bank
ers is accordingly tlat the greatest
pains be taken in arrangements for
the loan. It's Importance is greater
than that of any other financial trans.
action in this country since the re-
sumption Of specie payments, If not
the Civil war financing. The
negotiations are unprecedented, in
fact. for never before have England
and France sent representatives here
to arrange terms. Its failure, as fer
eign bankers can easily point out,
would surely be followed by imposi-
ton Of a British tariff on importe.
luxuries and restriction OF British pur-
in this country TO necessi-
ties, to the great detriment Of the ex-
port trade OF this county. i
That phase Of the situation is Wei
appreciated abroad, and is a matter
of live financial discussion. For ex-
ample, Sir George Paish says in the
latest arrived issue Of the London
Statist:
The government is expected in a
few weeks to bring in that portion OF
the budget which will indicate how
it expects to meet the deficit, and it
IL possible that the object lesson for
economy given to the country by the
discount on the American Exchange
and by the exports Of gold and securi-
ties, may be enforced by the Chancel-
lor of the ,Exchequer by means of
taxation. The effect may be an ap
preciable increase Of economy, dimin-
[shed imports, increased exports and a
much more favorable condition of the
trade balance and Of the foreign ex-
change"
The Loans 1imeIiness.
The government crop report last
week promised a record wheat crop
of nearly 1,CGo,C0oyO00 bushels, a corn
crop Of nearly 3,000,G09,C00 bushels,
and other staple and minor crops car
in the aggregate all pre-.
vious records. The production Of pig
iron in August broke all previous
records. The weekly trade reviews
reported the mercantile situation a.
According to the comptroller
of the currency the national banks
have reserves sufficient to warrant a
credit expansion Of more than $4,000
)C0,rOD.
Tie farm and trade reports slow
hat the country needs an export out
ct for its surplus products. The
bank figures show that funds are
here in abundance to finance a credit
providing that outlet. The arrival of
The British and French commissioners
could not he more timely.
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Read The Diamond IRON the Sky
in today's issue of the 1ribune.-Ady.