New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1915-08-25
FRANCE OBTAINS
S2o,0oo,ooo MORE
CREDIT HERE
Negotiations with Brown
Bros. & Co. Completed
Yesterday.

The negotiations which have been
under way for more than a month be-
tween the private banking house OF
Brown Brothers & Co. and the finan-
cial representatives of the French gov
eminent for the placing of 100000
900 French commercial credit in this
country reached their completion yes
terday.
In the statement issued by the New
York bankers emphasis was laid on the
assertion that the purpose of the
credit is to enable American export
ers to be paid in dollars in the United
States, eliminating any risk of ex-
change and thus facilitating our ex-
ports. Regarding the loan the state
ment added:
at will also enable French buyers
of American merchandise and other
commodities who have found it diff
fcult, owing to extraordinary condi-
tions now prevailing, to obtain ex-
change with which to settle their &C
counts with American merchants.
THE credit is for a period of one
year, and is to be availed of by drafts
at ninety days sight. Care has been
taken to comply with the requirements
of our banking laws relating to COM
mercial acceptances. In addition to
the responsibility Of the French draw
ers of the bills, the credit is secured
by the guarantee of the Bank OF
France of payment at maturity IN gold
if necessary. Collateral is also depos-
tied in New York as additional protec-
ton of the credit.
"As the drafts come forward and are
discounted in the open market an OPP
portunity will be offered for the first
time to American institutions and in
vestors of buying commercial paper
drawn by firms and institutions OF the
highest character in Europe on CORE
spending strong firms and institutions
in this country, which should discount
at the finest rates. The appearance OF
such paper should go far toward Great
ing a genuine open discount market,
without which this country cannot ex-
pect to continue to play its part in
the financing of our foreign trade"
While no direct statement was made
as TO the rediscountability of the &C
ceptances at the Federal Reserve
Banks. the efforts made to Comply
with the requirements of our banking
laws relating to commercial accep-
tances" left no doubt in the minds of
bankers that this feature could be
availed of in instances where the &C
ceptors are members of the FEDERAL
Reserve system. Governor Benjamin
Strong last night declined TO make
statement in this connection, however,
owing to the fact that he had not seen
the official announcement made by
Brown Brothers.
knowledge that this firm was in ne
gotiation with French bankers for the
granting of a substantial credit was
published several weeks ago. The ar
rangements were delayed, member
Of the firm stated yesterday, owing to
the premature publication OF some de-
tails of the financing.
This transaction follows the loan
made to France several weeks ago by
J. P. Morgan g. Co., who were given as
collateral bonds of the Pennsylvania
Railroad and the Chicago, Milwaukee
e. st. Paul. The total amount placed
TO the credit of the French govern
ment here was s43 100000 About S2s,-
600 900 of this sum is to be paid off
by the sale of the Pennsylvania bonds,
which are in franc denominations.
Kuhn, Loeb e. Co, acting for the rail
road, it is understood, will put out
new issue of dollar bonds to replace
the issue originally sold in Paris.
Previous transactions involving the
financing of French obligations in the
United States include the purchase
early last spring by syndicate head
ed BY ]. P. Morgan e. Co. of $5O,O0O,0O0
five-year per cent government notes,
which were offered for public subscrip-
ton. but the offering was not the sue
cess expected In October, 1914, a
syndicate of banks headed by the Ma
tional City Bank extended credit of
$40 100000 to France through the pur-
chase of that amount OF pei cent
notes, and early last August the French
government obtained credit Of sl6,-
100000 with J. P. Morgan & Co.
through their Paris house, Morgan,
Haries q Co