New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1916-12-31
BRITAIN ASKS
COLLATERAL FOR
LOANS TO ALLIES
Belgium Pledges Congo
Properties and Revenues
as Security

The demand OF American bankers
that Great Britain and her allies put
collateral behind loans Aosted in this
market has provoked more or less crit
icism in those countries, especially in
England. II now appears that Britain,
in making future advances 70 her allies
for financing the war, is preparing to
exact security similar TO that asked OF
herself by the bankers here. This new
phase Of Allied war finance is discussed
By Sriniyas r. Wagel in his bankers
bulletin.
A marked change, he says, is taking
place in the nature Of British advances
to the Allies. Up TO recently Great
Britain and France had to advance
funds to Belgium, Italy, Russia, servia
and Rumsnia, in order to carry on the
campaign. Now that military operations
have come 20 deadlock and the main
efforts are those Of France and Eng
land, advances OF funds are getting TO
be on a business basis. Mr.. Wsgel con-
tinues:
"The Belgian Minister Of Colonies
has been authorized TO contract loan
with Great Britain for 2O,OO0,oO0 This
loan is repaysble in ten years, and all
the properties and sources of revenue
in Belgian Congo are pledged as Sc
curity for interest and redemption OF
the loan. This is the first instance OF
a collateral loan among the Allies, and
has special significance in view of the
fact that the demand for collateral on
the part of our bankers was severely
criticised both in England and the
United States. There is no doubt that
loans on collateral have certain draw
backs. but from the point OF view OF
banking and business they are prefer
able to loans which have no other sup
port but the note of governments which
are already heavily in debt.
British Loan TO Italy
ar the war should continue for a
long while, the British government has
practically decided to grant advances
to her Allies, at the rate of s2,OO0,OOO o
day. on a business basis. The country
that needs money most at present Is
Italy; England is supplying funds at
the rate of about $50, 100000 TO 100000
600 a month. It has been practically
settled that Italy will pledge Italian
Somaliland in the first place. II the
advances should exceed s250,OOO, 900,
certain trade privileges, as we'll as
mortgages of property in Tripoli, will
be granted by Italy TO England. Spe-
cial efforts are being made to encour-
age British commerce with Italy, and
the British Italian Corporation and the
Compagnia Italo- Britannica have been
formed 20 conduct the financial busi-
ness formerly done by Germany. But
the hopes of capturing German trade
in Italy are not as strong as in the
past especially when it is known that
German capital and investments cannot
be confiscated or repudiated. The plan
of having Italian colonies az collateral
for the loans is the best that could be
adopted under the circumstances.
Russian Loans in France
at has been often pointed out that
Russia is a borrower on a large scale
in foreign countries. British and
French advances during the last
twenty-eight months total nearly ST.
600 900. OOO-besides the credits granted
in the United States and Japan. France
had very large investments in Russia
before the war, principally in state and
railway loans As Russia has been IN
able 20 meet the charges, the French
authorities have been obliged 70 make
interest and amortization payments to
the bondhoders, and up TO November
/ payments 20 the tune Of 1904, 600
have been made on account of the Rus
sian state loans. This total does not
include the November coupons. The
principal reason for the French gov
eminent continuing the payment in
stead of suspending it is the fear that
such suspension may adversely effect
subscriptions to their own war loans.
It is very unfortunate situation. but
there Is no other way Of meeting h."