The sun. [volume] (New York [N.Y.]) 1833-1916, 1916-06-18
FRENCH HOLD FAST
TO US. SECURITIES
Willing to Lend Them to the
Government. hut Not to
Sell Them.
LOAN TERMS LIBERAL

Specia, Correspondence 10 TR1 suS.
PARIS. May 3t.-The French Govern
ment's borrowing operation in foreign Sc
curities Is taking on important proper
ions In tho American as In the other
foreign lists. One institution alone has
already secured 2 5000. 900 franc
N2. 400. o00) In Americans. and II Ia
possible that the NAL total will run
to a handsome figure. Bankers have felt
that the French holder Of Americans
could not now be induced to sell In
large proportions. for the most vehe-
ment efforts to drive him into the mar
ket have not resulted In a liquidation
Of more than n NTH. 'and perhaps less.
Of the total held in the country.
The reasons for this rc%ticence are too
obvious TO require explanation-fear ~
a long European crisis Immediately af-
ter the war. the relatively high degree
u certainty In American ~ compared
will European prosperity for the next
ten years. exchange advantages. the
widespread habit OF scattering family
, fortunes In various fields In anticipation
Of wars and waves OF bad times. 81.
The loaning OF securities IL another mat
ter. however. No one can accuse the
French investor OF lack of patriotism;
he was patriotic enough to sell some
OF his Americans even when he thought
II was pure folly 20 do so: now that he
has the chance OF loaning them on good
terms he is ready to ZONE forward.
The Governments terms are excel
lent The theory is that the lender shall
receive his interest or dividends plus
% per cent. melons included. plus what
ever advantage there may be in the
exchange. The loan IL FOR three years.
with a right to renewal by the state
probably two, In case OF force ma jeure.
because II is not practicable for the
state TO borrow against its securities
unless they can readily be marketed II
is sl.clfed that the State shall have
the right to take over itself the loaned
paper at prices which are arbitrarily
fixed by the Ministry Of Finances or.
II the loaner prefers. at the highest mar
kei price achieved during the three
months preceding the date OF purchase
by the state from him. which In some
cases might be a better bargain than the
arbitrarily fixed ministerial prices. II
Is understood. though. that this matter
OF purchase by the state II purely for
NAL. TO reassure the bankers with whom
II Will deposit the securities against
oans 10 assist exchange.
The posted American l!st includes all
the gilt edged bonds held in France
except a few which had been previously
bought up by the big French credit in
st!tu,ions for the State. Central Pacific
notably. The list OF shares Is relatively
shorter. exception being taken TO any
thing but the very best securities. which
are more or less readily marketable in
France. either through existence on. the
Bourse list or through widespread good
standing among investors.
The negotiations between the Ministry
OF Finances and the bankers represent
ing or advising for the American Inter
est are not quite completed, however,
and 1t is possible that there may he
some changes in the list and in the
terms before the lending process !s
started. The Credit l.yonnais. FOR ex-
ample. is not Yet taking on the Aineri-
can offering on account Of possible
changes In the terms, II Is naturally
impossible 90 guess accurately as To
whether tho loan will run To 50 large A
hgure AS n billion francs, First, because
We do not know precisely how much
! paper there IL to draw from. and sec
ondly. because we cannot anticipate the
: public's real sentiment a. regards how
FAR II will pay to go IN the matter.
Much less can II he estimated how great
the effect on exchange will he, for tho
factors to he taken INTO account are
too many and too vast for present
measurement
enders receive q certificate on pro
scnting their securities. and this ccrtln-
cate Is negotiable on the Paris Rourse
for securities quoted on that Bourse.
For American securities not quotcd on
the Paris I}ourse certificate holders can
At any tine demand. by q I'm their
certificates. hat the corresponding shares
shall he sold for their account on the
New York stock Exchange. They will
receive In francs the corresponding value.
calculated according to the average rate
OF the dollar at Paris. on the day OF
sale. for the net amount produced I'm
dollars by the sale.