The sun. [volume] (New York [N.Y.]) 1833-1916, 1915-08-18
BRITISH WAR LOAN
a BE FLOATED HERE
Experts Say This Is Necessary to Pay for Supplies
Curtailment of Travel and Income From Tourists
Creates New Financial Problem.

LONDON. Aug. 1.-THE trend of opin-
ion regarding the proposal for a British
war oan In the United States Is almost
universally favorable. Practically all Of
the authoritative financial papers admit
that such a loan will have to be nego-
tiated. At the head OF these advocates
Is Sir George Paish. editor Of the Sfdttst,
who goes so far as to a. that II will
be practically impossible for Great
Britain to pay for necessary purchases
in America unless an American loan is
fioated and Hoated quickly.
While various schemes for afrording
immediate relief to the ~unfavorable con-
dition Of exchange between Great Britain
and h United States are offered from a
variety Of sources Il liz known that
Reginald McKenna, Chancellor OF the
Excheuuer. Is in constant touch with
leading financial men in London who In
turn are In constant communication
with the financial leaders in New York.
or the suggested mean for affording
this RELIEF IL seems tonight that The
shipment to the United States OF a huge
sum OF gold. probably $3.50. 900. 900. Is
most favorably received by prominent
bankers and the Government. Not only
Great Britain. but her allies as well.
would participate in the shipment Of
this enormous sum OF money. while
simultaneously the British Government
would undertake to foat a dollar loan
Of $500. 900. 900 IN New York.
The apparent determination on the
part OF the Government to relieve the
situation by quick and drastic meas
ures does not. however. seem to have
RhgNkaI tho fnn t.. IT, .asA
change.
The income tax is one OF the chief
difficulties connected with arranging a
loan In New FORK. II Is contended
that u Great Britain Is willing TO place
a loan In the United States free OF
American and English taxes the solution
might be reached. Other wise II would
be hard to overcome the obstacle OF
taxation. as an English bond bearing s
per would yield after taxes In
both countries had been paid less thar
1928 per cent.
II Is the absence Of such a loan. says
the editor OF the Statist. that has in truth
caused the recent fiuctuation in foreign
exchange. The fall on American ex-
change has amounted practically to 4
per cent. and Is due simply to the great
purchases Of American products by the
peoples OF Europe. Ordinarily. Sir George
Patsh says. Europe pays the United States
for goods purchased largely by means OF
sums spent in Europe by American tour
lists. IN account of the war Europe's
means OF paying for a normal amount Of
goods has been greatly reduced. while
the actual amount Of goods purchased
has been far in excess of the normal
mount.
The fall in American exchange on
London to a discount OF about 4 per
cent" he says. lis due simply to the
great purchases of American products
by the people of Europe.
For the six months ending with
some $4,000. 600. Her exports expanded
$654.000. 900. Her tourist expenditures.
which normally are at least $500. 0O0.-
ooO a year. were practically nothing.
Thus America had "A balance in her
favor amounting in the n~eighborhood
OF $500. 900. 900 more than she had In the
first six months Of 1914.
In the next six months to Christmas
the balance of exports imports In
favor OF the United States, after maxi
ing allowance for all outgoings for in
terest and service, probably will be one
thousand million dollars II conceivsbly
moy reach a still greater figure"
obviously" this authority continues,
ut IL quite impossible for Europe to buy
upward OF $4,000. 900, 900 Of goods from
the United States in a single year unless
the American people are willing to do
what h British people always have
~done-take payments for goods In securi-
ties"
II is generally held that the fotatlon
OF a loan in New York is inevitable
All OF the commentators admit that the
rate on interest for an American loan
must be higher than for n home loan,
and. therefore. hold that effective steps
u be taken to prevent British invest
ors from taking up the new loan.
The Financial Times is one Of the
papers which kinks that the Govern
ment should have foreseen the present
situation long & and made provision
for 1t. This might have been done, this
paper suggests. by allowing foreign in
vestors to subscribe to the regular war
loan free OF the income tax. The Finan-
ctdl Times finds another cause for com
plant In that a foreign loan will be
much more difficult to f,oat successfully
now thar II would have been before the
recent German successes in Russia.
The Ffndnctcr and the Financial Netps
both agree that some sort of an Ameri-
can loan is imperative. The former
paper thinks that II should be at 6 per