The sun. [volume] (New York [N.Y.]) 1916-1920, 1919-06-28
CANADA TO BORROW
S75,OOO,OOO HERE
Negotiations for Flotation of
New Loan to Dominion
Are Completed.
WILL BE ON 5 1-2 PC. BASIS
Issue to Be for Long Term and
to Provide for S100,000,000
August 1 Maturities.

That negotiations for the fotation in
this market Of a new loan Of s75 900, 900
to the Canadian Government have been
completed was learned in an authorize
tive quarter yesterday. The issue, which
Is expected to be long term and to be
offered on basis Of 8 " per cent or bet
ter, will be f,oated early next month. It
Is said. for the purpose Of providing part
Of the funds to meet the maturity on
August 1 OF 500. 100000 Canadian Gov
eminent two year per cent unsecured
gold notes. which were put out on
per cent basis.
Arrangements thus far contaminated
include the decision OF the Canadian
Government to borrow $75, 200, 900 here
ana the agreement OF the syndicate which
handled the issue two years ago to un-
derwrite the proposed financing. Such
details as the allotment to the under
writing syndicate, the formation Of a
distributing syndicate, the final decision
as to the term of the bonds, the rate OF
interest and the offering price must be
worked out. The assurance given to the
Canadian Government Is that the loan
will be made a success and that the cost
OF the money will not be more than ~
per cent.
J. p. Morgan & Co., Brown Bros. &
Co. and Harris. Forbes 4 Co. were the
managers OF the syndicate which SUI
cessfully fioated at the end Of July, 1917,
the 500. 100000 two year notes, and 1t
is expected that they will manage the
new issue. The rest OF the underwriting
group two years ago were the First
National Bank. the National City Com
pany. the Guaranty Trust Company, the
Bankers Trust Company. the Bank of
Montreal and William A. Read & Co.
There Is no reason to anticipate that
any OF these banks will fall to partici-
pate in the underwriting group for the
new issue.
J. p. Morgan and H. p. Dawson held
long conference yesterday afternoon
with Benjamin Strong, Jr.. governor of
the Federal Reserve Bank. and II Is
understood that Assistant Secretary of
the Treasury Leffingwell was present.
Whether the forthcoming Canadian loan
or the Dawson plan for the financing of
needs abroad and the extension Of
credits to European countries were dis
cussed or not could not be learned. but
as the approval of the Secretary of the
Treasury had TO be obtained in connec-
ton with the loan two years ago II was
assumed that the loan to Canada came
Up for consideration. II Is anticipated
that Carter Glass Secretary of the
Treasury. will give his assent to the new
loan as readily as william G. McAdoo
gave his consent in 1917.
The proposed loan to Canada In the
arst big foreign Government transaction
since the conclusion OF the armistice and
an official announcement is expected to
make II the first big foreign Govern
rent loan to follow the actual consum
nation OF peace. In fact there have
been very few foreign Government loans
since Americas entrance into the war
and the new loan is merely an indication
OF the scale on which credits must be
extended by the bankers and investors
OF the United States.
The proposed loan is the fourth to be
raised here by the Dominion of Canada
since the outbreak OF the war, but this
one will not Increase the amount of
Canada's outstanding debt as 1t Is
refunding proposition. The first loan
was for s45, 100000, consisting OF $685.
600 900 OF one year per cent. notes
which matured in August, 1916, and
S20,000,o00 OF two year per cent. notes
which matured in August, 1917. The
second Canadian loan was for SIS, 0O0,-
600 and It was placed in April, 1916.
II was In the form OF per cent notes.
s25,000000 maturing in APRIL 1921,
s25,O00O00 in April, 1926, and $4,000
600 In April, 1891. All of those issues
we're sold on a basis OF n per cent. or
better. but the third issue of Sl00.0oo,o00
In the form OF two year per cent notes
was offered at a price to yield approx
mately per cent.
Besides the fiotation OF the Dominion
loans mentioned above, various Canadian
provinces and municipalities and rail-
roads have sold bonds and notes in the
United States since the beginning OF
1917. In previous years all such
financing was done in London.
The Bank of Montreal has imported
81 900, 900 in gold from Canada. but so
far as could be learned II was special
transaction and had no connection with
the notes which mature on August /.
That it was a special transaction was
proven by the course of New York funds
at Montreal, which yesterday went TO
I I-39 per cent, the highest premium
reDOrted