New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1916-09-28
PARIS BORROWS
S50,00o,oo0 HERE
A Unique and Bloodless
Transaction with Kuhn,
Loeb & Co.

The most unique foreign loan yet
made by American banking interests
since the beginning of the European
war was announced yesterday by Kuhn,
Loeb & Co., who have closed negotla-
tions with the City of Paris for $780,
100000 fve-year 6 per cent bonds.
The bankers wish to emphasize the
fact that they have steadfastly refused
to participate in any of the foreign
loans previously made in this country
by belligerent nations because Of con-
scientious scruples.
In this case, the bankers said the
proceeds of the loan are 70 be used
for strictly humanitarian purposes.
This loan" says their official an
nouncement, "is made to reimburse the
City of Paris for very heavy expendl-
lures made by it for the alienation Of
suffering caused by the war and TO
provide for additional similar expend-
lures and for other municipal pur-
poses"
Among the uses to which the pro-
ceeds of the loan will be put, it was
explained informally, will be the build
ing Of new hospitals with the neces-
sary supplies and giving aid to the I'M
employed. American investors will be
offered the opportunity Of subscribing
to the bonds next week. The formal
statement added:
The principal and interest Of the bonds
are payable at the option Of the holder
either in United States gold coin in New
York or in Paris in francs at the fixed
rate of $50 per dollar. thus giving the
holder the prospect for very substantial
profit in exchange inasmuch "a the normal
rate of exchange before the war was about
5.lS francs per dollar.
The government Of the French Republic
is to undertake 20 furnish. if necessary.
70 the City Of Paris gold in the amount
needed TO permit the payment of the prin-
cipal and interest Of the loan in New York.
Figuring that the rate of New York
Exchange on Paris at the maturity of
the bonds will be somewhere near the
normal par of exchange, it was esti-
mated that the profit to the holders, in
addition 10 the interest. will be between
and 612 per cent. This is the first
Paris loan ever hoated in this country.
One of the reasons why the banking
house of Kuhn, Loeb & Co. has refused
to join in any of the big loans to the
Allies has been the well known feeling
of the head of the firm, Jacob II. Schf,
toward Russia. When the last S50,O00,-
600 loan to Russia was still in the
rumor stage Mr. Schif issued the fol-
lowing statement:
II the report frequently repeated recent
~ that large Russian credit is now on
the eve of being concluded proves correct.
this credit will be one Of the most insidous
pieces Of financing ever done in this coun-
try.
IL is not yet known under whose auspices
this reported transaction is TO be made, but
whoever will be responsible for it and who
ever is going to take part in 1t will have
no cause to be proud Of the help he is going
to give the Russian government.
feel quite convinced that at some time
those who shall become responsible for this
financing will have cause to regret it.
This loan to the City of Paris brings
the total borrowings of France in the
United States since the beginning of the
war up to approximately 1926, 900, 900, ex-
elusive of her share in the S5000O0,O 900
Anglo-French loan. The borrowings of
all foreign countries are now increased
TO about 81. 700 coo. 900.