The Birmingham age-herald., 1916-07-14
Indirect Way Devised to Provide New Fund of
 $1OO,OOO,OOO
SECURITIES PUT
 UP AS GUARANTEE
New International Corporation Is Also Using Its Funds for Placing Loans
 Abroad
By HOLLAND

New York, July 2.-(SpeciaI.) )-Ten mill lion dollars will be the capital paid in of the organization which is to under take the floating of $95,0O000O of the de- benture bonds running three years so issued as to net the investor probably a little over per cent It was really a French loan, although the American in- vestor in these debentures will put his money into an American security. Ten million dollars is also the amount
 of paid-up capital of the American Ma tlonal corporation, although the total capitalization, if it be all issued, is $50,- 00o000. Here, then, are two financing organizations, one of which is to be ex- clusively occupied with selling American | securities for the benefit of France and the othor is to be in the future as it is
 now, also occupied with placing loans in foreign countries with intent to facilitate and increase American trade.
 The financing organization which rep
 resents delicate and yet, from one point of view, very simple financing will re- ceive from France as a special deposit $125,000,000 par value of various national | securities which France has borrowed from the French people and French in- stitutions. These bonds will be held by the specially organized company as se- curity for it's own issue of debenture l bonds.
 l In 1896, when President Cleveland was sorely in need of gold with which to re- plenish the exhausted stock in the federal | treasury, the Imperial Deutsche bank of | Berlin offered to lend as much as $200, | 900, 600, of which $250O0, 900 did come to the | hon willing to take government bonds bear l ing 4 per cent interest as security, but | it was essential that these bonds be pro- | tected lest they depreciate in price. nd ward D. Adams, through whom the loan
 was negotiated, widely known as the re- organizer of the Northern Pacific Rail road company, suggested that an Amer icaE syndicate be organized which would be pledged to protect these bonds. That was done, and it is an interesting fact that the syndicate which has been or ganized to furnish the capital of the newly organized financing corporation is made up chiefly of the same men or the | same banking houses that constituted the syndicate perfected to protect the gov ernment per cent bonds 20 years ago. AMERICAN IN NAME ONLY This new loan of the par value of $100,- | 000 600 is from one point of view an Amer
 
 | made to France, for the new finicing organization will turn over to France the funds which it receives for the sale of it's own debentures. Therefore, the entire amount may be properly added to the list which describes American loans to foreign nations since the Flu ropean war began.
 The American International corporation is sometimes spoken of as the finest ex- republication of the ability of American bankers and financiers thoroughly well to meet the new and original proposi- tions which have been occasoned by the
 European war. It's scope is far-reaching,
 and even worldwide, and it's policy is
 in line with the one which was advo-
 cated by Henry P. Davidson year ago,
 when he earnestly counseled American
 bankers that in making loans to foreign
 countries they should not take undue or
 unfair advantage of the transactions so
 that the United States would gain trade
 which England or France or Germany
 would lose. The International corporation
 and its sponsor the National City bank,
 have adopted policy of absolute fair
 ness.
 For instance, the branches which the
 National City bank has established in
 other countries do not charge higher
 rate for money than per cent The Interna tional corporation seeks not to persuade Americans to settle in countries
 where the corporation has given assist
 ance It adopts the policy, now known
 to be a very wise one, of relying upon
 trade to follow the loan. It's recent loan
 of $6,OOO,0OO to China, with which to de- velop canal system, was made in all
 fairness to China, but it will undoubt-
 edly lead to increased trade relations
 with the United States. The manage
 ment of this corporation reflects the
 highest American ability and that in
 wolves capacity to forecast even for
 years. The corporation is here to stay.
 Its work will be continued when the Eu-
 ropean war is ended and through it many
 of the loans made to foreign nations will
 be accomplished.