The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1916-08-16
Money Again to Be Used in
Payment for Goods Pur-
chased in This Country
AMERICAN SECURITIES
MAY BE USED AGAIN
Public Understand Financial Problems
Much Better Now Than When
Allies Made First Big Loan
in This Country
BY HOLLAND

|
United States is about to lend millions
of money to England so that payments
| can be made for exports from the United
States to that country. Today the public
| understands transactions of this kind
much better than 1t did when the Anglo
French loan of half billion was ne
gotiated. 1t was one of the great serv-
| ices of the late James j. Hill that at
a time when it seemed likely that the
underwriting syndicate would be COM
PEELED to carry this loan he told the
American people just what the transac
ton meant. We were lending money he
| said, England and France SO that they
could pay the bills they owed to the
| United States. The security was the
honor, good faith and resources of the
two nations. And in Mr.. Hills opinion
| there could be nothing better in the way
| of security than this.
! Now in all proba ability the half billion
which England and France secured in
the United States nearly a year ago
has been paid over to American farm
ers and to the managers of American in
dustries. So far as they are concerned,
q,
| England and France must take up the
obligations they gave on account of this
| loan.
| The American people were educated by
this transaction SO that it was possible
| for France few weeks ago, not only to
secure loan of approximately $100, O0O, 900,
| but to feel some qualification that the
notes or bonds which represented this
loan were speedily absorbed by the
American people. All this money will be
paid, perhaps most of it has already
been paid to liquidate purchases made
by France to the United States.
THE NEW ENGLISH LOAN
Various hints and comments which
| nave been heard in the financial dis
| trict for several weeks caused the fl
nancial leaders to suspect that negotia-
lions were under way which,, If COM
pleted, will create a new loan to Great
Britain. The amount was a matter Of
guessing. Some of the authorities thought
that as much as 200,000,000 would be bor-
roWed, while some put the figure at
something less than that
Our international bankers who have
| been familiar with the financing methods
OF Great Britain speak in terms of I'M
quallfled admiration when they discuss
the manner in which England has met
and solved absolutely new financing
problems, some Of them representing
greater amounts than were ever before
considered by any nation.
| At least year ago, our international
| bankers said that the financial leaders
IN Great Britain would in some way
utlize american securities which were
| In the possession of English citizens and
might, II the war were prolonged, make
| use of other securities of which England
possesses billions The estimate then
made was that the capital wealth of
Great Britain is nearly $780, O0 900 900.
There seems to be no doubt that the peo-
pie OF Great Britain are now prepared
to expend as much of this capital wealth
as may be necessary to maintain Eng
land and her allies financially during the
course of the war.
1t may be that the new loan now in
contemplation will be of especial value
with respect to the American securities
market. 1t, OF course, will be of value
to those who have sold or are about
to sell commodities to Great Britain.
Ihey will receive spot cash payment for
these commodities. If, however, Great
Britain utilities the American securities
which she has borrowed SO that thew
may serve as collateral security for the
new loan, then some of the hesitation
IA the securities market is likely to dis
appear.
The doubt which has prevailed has
been due to the apprehension that Eng
land might sell American securities in
great amounts, but if American stocks
and bonds are used to back UP the new
loan then these will be out of the mar
ket, and there will be no danger of ex
cessive offering of these securities In
the American market
A DELICATE PROPOSITION
All of the great financing in which the
united States has been one of the par
ties ever since the beginning of the war
mas entalled not only very delicate fl
nancing-some of 1t highly artificlal-but
also the solving of original problems. 1t
may be that herafter some new and diff
cult problem must be solved. but the i'm
preston commonly held now is that the
bankers on both sides of the ocean have
worked out to perfection an admirable
plan whereby loans can hereafter be
made to England and France which,
upon the face Of them. are purely Amer
lean loans.
France secured her recent loan Of $780,
100000 through the admirable working out
OF a plan which did not require France,
as government, actually to put up Sc
curities held by her citizens in order to
protect the loan. France did send Sc
curities to the United States, but these
were taken over by a newly organized
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