The Birmingham age-herald., 1916-08-20
NEW BRITISH LOAN |. ID BE ATTRACTIVE AS AN INVESTMENT
To Be Amply Secured and to Bear High Interest Rate for Securities of
 This Nature

Details of the plan by which Great Britain is to negotiate loan of $250,- 900, 900 in this country within the next few days were received in Birmingham yesterday in a letter from William l Solomon & Co.,, large New York imam | cial house. The loan, which will run for | two years, will be secured by American
 and Canadian securities, and those of other enutral countries owned in England, and in addition will be in the i form of a bond either of Great Britain or of the corporation handling the loan ins this country.
 l This loan Is considered an excep- | tionaIly attractive form of investment and being sold at 99, will yield ap- proximately 5k per cent. Government bonds of a nation like Great Britain are considered the highest class of se- curities and with the added guarantee of the best of American and other se- curities. It is expected that the entire amount will be hastily taken up. Such favorable interest rates and security are made possible only because of war conditions, declare Solomon & Co., l The letter follows:
 Tt is reasonably certain that in a | few days subscriptions will be invited
 to the new British loan. amounting to
 s250, 900.
 | Although the exact terms of the loan are not definitely stated at this
 time. it is understood that the loan
 will run for two years. and will be
 secured by American and Canadaian
 securities, as well as those Of other
 neutral countries, owned in England, 1 in an amount necessary to provide an
 ample margin of security for the loan. The offering price, it is stated, will be 1 s9, which will make the yield approxi-
 mately 5A per cent.
 IN FORM OF BOND
 | "The forthcoming loan will be either | in the form of bond of Great Britain
 or that of an American corporation
 formed for the purpose of placing the
 loan, resting upon the credit of Eng
 land, nation which has an unequalled
 record of financial integrity, strength
 and achievement, and further secured
 by the pledge of securities of corpbra-
 tions of the highest credit in this coun-
 try; all of which makes this an event
 of the greatest importance in the finan-
 cial history of this country
 | AS sort resume for comparison,
 you will recall that about two years
 ago, at a time of great financial de-
 moralization. incident to the beginning
 of the war. New York city sold its one,
 two and three-year per cent notes in
 order to secure gold to liquidate its for
 eign Indebtedness. Later Norway, Sweden, Switzerland and Argentina
 borrowed here. at a time of high money
 rates, for periods varying from three
 to five years at approximately per
 cent. Subsequently, France made one
 year loan on 5k per cent basis.
 More recently the Anglo-French bonds,
 which run for five years, were offered 1 to American investors at approximate | ly 96, yielding about 5.94 per cent. The Dominion of Canada sold its five. | ten and fifteen-year obligations on a
 5.10 to 5h per cent basis. Each of these
 bonds was simply the obligation of the issuing government, and was not se- cured by collateral. few weeks ago
 the French government, through an in-
 termediary American corporation. bor- l IOWCd lOl eHiSO SHAS NP"ii -A"eSf s~A l Gall but small part of which con-
 sisted of bonds of neutral countries),
 to yield 5% per cent. These extraordi- nary investment opportunities just re-
 ferred to are due to the exigencies of war finance and have made available
 what has always been regarded as the strongest form of investment security | the government bond--at unprecedent- lily high interest rates.
 TO PAY FOR GOODS "The purpose of this loan is to make advances to our largest European GUS | toner, facilitating the payment for goods which we are selling to them. To jthe extent of the amount of this loan, l the effect will be to postpone the iQui- dation of American and Canadian se- curities, thereby relieving the money market of any immediate pressure to 1 sell our bonds and stocks by England. At the present time unsecured notes i of the strongest American corporations for similar period, namely two years, are now selling at prices to yield less than per cent.
 The obligation of one of the strong | est countries in the world, protected by the pledge of we'll known and realizable securities approved by American bank CTS, constitutes an investment which
 may be regarded as impregnable.'