New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1916-08-11
Delaware
Offering of Russian
Internal Bonds Here
To the Financial Editor.

Once the ice has been broken by the
granting of the S5O,O0O,000 credit to
Russia, it is not surprising that consld-
cradle attention should be paid to Rus
sian finance and Russian bonds. Inter-
national finance is in the air, at pres
ent, and with the several European
governments in the market for money
the public here is being educated to
understanding foreign investments. At
time like this, bankers and other
leaders in the financial world should be
very careful as to their operations and
the advice which they offer the IN
weston.
1t is a curious commentary on the
state Of mind of the financiers here
that they should insist upon collateral
for loans to England and France, while
they should grant credit to Russia on
practically no security. 1t reminds ore
Of a conversation between an lfish
saloonkeeper and his bartender. A Gus
toner had a drink and the bartender
became doubtful about the customer
ability TO pay; so he asked the saloon
keeper if he was good for the drink
The saloonkeeper asked whether the
man in question had already had the
drink or was going TO have H.. Oh
being told that he already had inc
drink. he said he was good for 1t. On
q similar kind of reasoning, because
Russia has successfully arranged Ior
a credit here It is concluded that her
bonds are good.
There is no harm in granting. new
credit TO Russia, so long as the imam
ciers have faith in her, and, II pos
sible. could obtain collateral But II
is a different question when II comes
to the sale of Russian internal wa
loan bonds, which are now Deing OF
fercd here for sale. In the case o.
these bonds, there is no collateral any
Russia is supposed to deal only win
her own subjects. The terms, aIso' arg
not very attractive. One tnousan1
ruble bonds are offered for, SSOfoV,
fiat, for immediate payment; the Donds
to be delivered as soon as they aIrEe
hero from Russia. A discount OF SOU
Is given for those who buy these
thousand ruble bonds, when the bonds
are TO remain on deposit in Russia, Tor
the account, and at the risk, Oh the
purchaser
Investors in this country are able 10
take care of themselves, and there IS
little danger of the Russian 512 per
cent bonds being bought at par-that
is. on practically the rate Of exchange
of the day; but those who offer them
here have a duty to the public, and
should have more valid reasons than
we know of 10 offer an internal war
loan bond of any country. No DOUBT
ENGLISH Treasury notes have been OIL
fered and taken by the banks IN CHI
cago. but England is known TO be the
strongest nation, financially, and, for
2ll that we know, is still creditor OF
this country, in spite of the enormous
purchases made during the last two
In this connection, a few facts may
be Of interest to the public. Early IN
1915 Japan refused TO supply ammu-
milton TO Russia unless there was pay
ment on delivery and proper guarantee
of credit. England had to go to the
help Of Russia, and guarantee the pay
ment for the purchases IN Japan. Rus
sia has issued paper money for even
the smallest denominations, and there
are ten-kopek stamps, which people
are forced by law to take. Another
poirt Is that il will not be as easy as
neople here believe to capture Rus
sian trade after the war. Russia owes
France over 1900, 100000, and to Eng
land, at present, about t4OO,OOOVOO
These countries will have the hrst
claim on Russia, and whatever accom-
modation the United States may ofer
to Russia at present can hardly De
fraction of those of France and Eng
land. ,o,. W. D H.
New York, Aug. 9. 1916.