New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1916-12-02
Withdraw Bills on IN
structions from Brit
ain and France
SECURED LOAN
LIKELY INSTEAD
Gold Payments Expected
TO Prevent Injury to
Export Trade

vs6sral Reserve Board that the com
r,.-cial banks Of the country should
not employ their liquid funds ex'
t.nsiveiy in the purchase Of British
and FRENCH Treasury bills. j. +
Morgan & Co. announced yesterday the
abandonment Of the plan to offer
"umited" amount Of such bills. begin
ming December /.
This action followed instructions
from the British and French govern
n,nts. as is indicated in the following
statement:
We have been instructed by the
British and French governments TO
withdraw their Treasury bills from
sale. We have accordingly ex-
pressed TO those institutions and
investors which had already placed
orders with us for these securities
the wish TO be released from our
obligation TO deliver; and they
have been good enough TO aceede.
Regard for Reserve Board
This action is taken because. as
explained by the British Chan
cellor Of the Exchequer and by the
French Minister Of Finance these
governments desire TO show every
regard 10 the Federal Reserve
Poard. q governmental body OF
which the Secretary Of the Treas
NV and the Comptroller Of the
Currency are ex-officio members.
VIC may add that the sale in
limited amount Of these Treasury
bills. payable in dollars in New
York. had never been an essential
part Of the Allied governments
financial plans, but had for some
time been under consideration,
with a view 70 furnishing a credit
medium that would accommodate
the American banking demand for
an instrument Of short maturity
and Of such limited volume that
the governments could always
undertake 10 lay down gold in New
York sufficient TO meet the matur-
ing bills.
IL was believed further ths: these
bills would have furnished, at the
end Of the war, an excellent
measure OF protection to the
American financial situation, mas
much As these steadily maturing
obligations of the foreign govern
ments would have tended TO pre-
vent heavy drafts of gold from
this market
Market Closes Strong
yesterdav's unexpected sequel TO the
over floating among the
commercial banks Of this country the
treasury bills of Great Britain and
France was not unfavorsbly construed
m the stock market, which closed
strong. Notwithstanding the sugges-
ton that foreign buying might be
diminished.
This seems 10 be n highly debatable
matter. Some bankers were inclined
10 emphasize the possibility that what
.hey referred to as the action OF the
federal Reserve Board would put q
upon exports to Europe
Others thought the effect would be
n.perceptible, at least for the present
IN view of the fact that the AilieS
ire buying now no more than is re-
7uired to supply their imperative
needs, and these will have TO be sup
piled so long as we have surplus
u goods 70 sell. How the goods shall
Be paid for is a matter Of arrange
nent II payment cannot be made
with Treasury bills. other means can
be found.
Gold Shipments Expected
For the present il is expected that
The Allies purchases will be financed
mainly By further shipments Of gold
from Ottawa and other sources. Ap-
ssO,O0O,00O in gold and
securities from Russia is on its way
10 New York via San Francisco, and
further large consignments Of the pre-
,ious metal will come from Petrograd.
A member Of the Morgan firm said
yesterday that there is no immediate
Danger Of a curtailment in the pur-
chsses Of Great Britain and France
In the United States, as the supply
Of the Allies gold at Ottawa is very
large, owing 10 recent heavy ship
nents from London on British war
ships. II necessary, declared the bank
er, purchases Of Sl00O0.000 a day
,ould be made for a considerable
period without resorting to new credit
New Loan Likely Soon
Il is now the belief Of bankers gem
rally, however. that, since British and
French Treasury bills are not to be
sold in this market, there will be very
soon a new secured" loan-perhaps by
January 1. IL is felt that the warning
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