The sun. [volume] (New York [N.Y.]) 1916-1920, 1919-10-21
BRITISH TO FLOAT
HUGE LOAN HERE
Morgan syndicate Will Place
S250,000,000 Three and
Ten Year Bonds.
WILL BENEFIT EXCHANGE
Part of Proceeds to Be Used to
Retire Issue Maturing on
November 1.

The British Government has arranged
for the sale in this market Of new
,,sO 600 900 loan, according to announce
mani made yesterday by II. P. Dawson
of the firm of J. p. Morgan & Co., fol-
having an exchange of cablegrams with
IN. Chancellor of the Exchequer and a
conference of local bankers. who will
,srticIpate in the underwriting syndicate.
The announcement appeared as a COM
nlete surprise to the financial community,
The market for sterling exchange, which
will be benefited to a greater or less ex-
tent. showing an easy tone, with the rate
close to the extreme low record.
The new securities take the form OF
three year bond and ten year bond
hearing coupons of 5 u per cent, and j.
p Morgan & Co. will determine the
amount of each class which will go to
the investors The bonds are to carry a
conversion privilege at fixed rate Of
exchange, which will give the investor
what amounts in effect to call on ex-
change on London. In other words. the
Offering comprises a British Government
obligation, not only yielding an attrac-
tive rate OF return in dollars, but carry
ing also the right of conversion into a
of profit commensurate with the return
Of the exchange market to more normal
conditions.
The Morgan firm has formed a coun-
trywlde distributing syndicate, and It
sent out last night letters to participants.
public Offering is scheduled for Thurs
DAY morning The full details OF the is
sue, covering offering price, yield and
conversion right, are to be announced to-
day. For days the partners of the Nor
gan firm had been questioned by the
holders of the s1S5,00o.0 900 British Gov
eminent ~ per cent. notes, which ma
ture on November l, and others relative
10 the possibility or opportunity to in
vest in a new long term British Govern
ment security. But the reply was that
10 new issue was contemplated at the
present time.
To Have s11O.OoO.O0O at Disposal.
J.P Morgan, head of the firm, is in
London, and II was said yesterday that
he had a large share in devising the
new method for British Government bor-
rowing in this market. No detail OF
that method was communicated to this
country until yesterday when the word
by cable caused unprecedented activity
in local offices Owing to depreciation OF
was difficult to find a long term security
that would be attractive to the Ameri-
can investor and OF minimum cost TO the
British Government. Another note issue
was dismissed from consideration and
the difficulty at present of placing a LONG
term bond issue was fully canvassed
Hence came the issuance of a three year
and a ten year bond, the former carry.
ing the conversion privilege Throughout
It's life and the latter carrying 1t for al
but the last nine months of it's existence
BY means of the new loan the British
Government, after the retirement of the
outstanding balance of about sl35.000,
600 British Government notes, which
mature on November l. will have more
than s110, 900, 900 at its disposal in thi,
country for its own requirements or fol
those Of British merchants to whom dol
lar exchange may be sold. 1t is a It'd,
sum for the British importer who de
sires 10 buy goods in this country, Civ
ing an Increased buying power to Grea
Britain for American exports. It re
lieves the exchange rate for sterling al
expressed in dollars at once and lift
from the market the exchange which 1
had been expected would have been solo
to meet the November maturity.
The official announcement follows: