New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1916-08-12
JAPANESE LEND
S30,oo0,ooo TO
GREAT BRITAIN
Buy British Treasury Bills,
rendering New York
Funds in Payment.

Japan has come to the assistance OF
her ally, Great Britain. in financing
the huge purchases OF war materials
in this market, il became known in
Wall Street yesterday. The transac-
ton, just completed, will, it is believed
in banking circles, enable the British
financial authorities to postpone for
time the hotation of the proposed
5000, 100000 British government col
lateral loan.
The japanese government, it is
learned authoritatively, has advanced
to Great Britain approximately $780,
100000 in New York funds out of the
reserve which the Mikado's government
has been building up here since the
latter part Of last year. On the other
side, the British government is under
stood to have placed s30,000,00O of
British Treasury bills to the credit Of
Japan in London. In other words, the
Japanese government has invested $780,
100000 in British Treasury notes and
has paid for them by transferring that
amount of money from its own New
York deposits to the credit of the Brit
ish government.
The Loan Postponed.
Bankers said yesterday that the
funds obtained by Great Britain
through this arrangement with its
Eastern ally would probably help
greatly in stabiliZing the sterling ex-
change situation until the projected
new British loan could be arranged.
The big loan, that has been much
talked of in New York banking circles
ever since the s1O0,OOO.OOO collateral
French loan was brought out. has so
far only entered upon the preliminary
stages. While these negotiations are
being carried on between here and
London, the 100000, 900 borrowed from
the japanese, taken in conjunction with
a continued influx of British gold
from Canada, ought to be sufficient TO
sustain sterling exchange, bankers say.
Japan's Account Here.
Japan began building up her reserves
here near The close of last year. In
the early part Of the war the ex-
changes favored the United States and
some japanese gold came this way. But
later the situation shifted and the
balance of trade swung around in favor
Of japan As result funds to the
credit Of the Japanese began to ac-
cumulate here. Rather than GO to the
expense and inconvenience of shipping
the gold received on balance to Toxic,
the japanese government thought it
better to keep the funds here as a sort
OF reserve. During the last six months
the balance steadily increased until it
exceeded s5O,OOO,OOO. 1t was distrib-
uted among local banks on interest.
From this fund the British now have
withdrawn s3O,OOO,OOO. The remaining
500, 700, it was learned yesterday,
is still on deposit in this city to the
credit of the Japanese government.
Whether further transfers will be
MADE to the British is not known, al
though it is considered unlikely that
Japan will exhaust all of her funds
mere in this manner.
The transfer of the 100000 just
announced has saved the British
great deal OF trouble and expense. in
that it has made unnecessary the ship
mcnt here of that amount of gold,
which otherwise might have had to
come forward. Bankers here view the
operation as one more evidence of the
splendid manner in which the British
financial authorities are employing
h.,