The sun., 1919-01-17
BANKERS TO FLOAT
NEW BRITISH LOAN
viii Be Close to S1OO,OO0,OOO
in One or Two Year Notes,
Is Report.
INTEREST AT 5 1-2 P. G.
To Be Used to Pay OFF Balance
Of S150,OOO,O0O Which
Natures February 1.

Preparations for the Rotation OF n
new British Government issue approx
mating 500, 900. 900 are near consumma-
ton, It was learned yesterday, and an
Official announcement is expected to be
made in the near future. The Issue is
expected to take the form Of one year
or two year notes and to command an
interest rate of 81 per cent The Treas
ury Department, 1t is understood, has
given It's consent to the new financing,
and all that remaiRs is the formation OF
the syndicate and the formal Offering Of
the new Issue.
Tho proceeds OF the new notes are 10
he used to pay off the unconverted and
unretired balance OF $4,000, 900 two
year 5ia per cent. notes which will ma
ture on February 1. OF the notes issued
in January, 1917. approximately ST.
100000 has been retired through the
sale OF collateral security and approx
,nately s5o.000.000 has been converted
into twenty year bonds. The balance to
ne converted between this date and Feb
ruary l or TO be retired through a new
note issue of about 92.500.000.
This is the first foreign Government
financing to be done since the United
States entered the war, and 1t suggests
that the policy Of meeting the needs OF
foreign Governments through the is
suanco of credits by the United States
Government is nearing its end. BY the
financing the British Government will
get little new money. as the chief prob
len, to be solved was to refund the ma
turing notes without any call upon the
United States Government. The imme-
diate contamination of this financing. the
Treasury Department is understood to
old will interfere in no wise with the
fotation of the forthcoming Victory
loan. II is further understood that local
bankers can have the financing field I'M
Ill March /. when direct preparations
for the fifth war loan must crowd all
other financing from the market.
other Large Financing Under Way
In addition to this foreign Government
financing there is under negotiation in
local financial circles the financing of
the Cuba Cane Sugar Company, which
requires a minimum of 81 900, 900 the
Hooking Valley financing. which requires
100000, a proposition TO extend the
notes now being before John SHELTON
Williams OF the Federal Railroad Ad-
,ninistration. and the financing OF s22,-
mature February l, and which are left
20 the tender mercy OF the War Finance
Corporation.
The new foreign Government financing
IS receiving primary consideration at the
hands of local bankers, who anticipate
success for the issue notwithstanding
current financial conditions. 1t Is ex-
pected that the new British Government
notes will be secured by redeposit of
the collateral. which remains In back Of
the notes which mature on February !.
That collateral must have a market
value OF 90 per cent. in excess OF the par
value Of the notes. In case that the Sc
curities depreciate In value because OF
the change in market price or In the rate
OF exchange to the extent that the 90 per
cent. margin is in danger Of impairment
the British Government. 1t is understood.
will continue the agreement to deposit
additional securities.
The collateral back OF the notes Is still
divided into three groups, the first COM
prising stocks. bonds or other securities
OF corporations organized In the United
States; the second bonds and other OBJ
legations OF the Dominion OF Canada, and
stocks and bonds OF Canadian railroads
guaranteed by provinces or by the Do
n.n!on itself: the third. bonds and other
obligations of the Governments Of Argen-
INA. Chile. Norway. Sweden. Denmark,
Switzerland, Holland. Cuba and other
neutral Governments, and also New
Zealand. and probably a certain amount
of dividend paying securities of British
railroads.
The work of forming the syndicate,
il is understood. is going ahead rapidly
nd the financial district expects that
he syndicate will be made UP largely
., those institutions which participated
IN tho original offering of the notes In
,9l7. Some OF them were ]. p. Nor
ran & Co. the First National Bank,
Brown Bros. & Co, Kidder. Peabody
& Co. Klssel. Knncutt & Co.. the Bank
crs Trust Company. Harris, Forbes &
Co, ] & w. Seligman &c Co.. Lazard
Freres, the Guaranty Trust Company,
William A. Read & Co, the National
City Company. Lee. Higginson & Co.,
White. Weld & Co. and the Farmers
Loan and Trust Company m New York
md important institutions in other
cities.
Would Convert Maturing Notes.
While the new issue IL planned for
maximum of 100000, 900. the bank
ers desire to have as many OF the ma
turing notes converted into long term
bonds as possible. In that connection
the following prepared statement was
issued yesterday = a statement of fact:
some interesting figures were oD-
iained yesterday as to the conversion
Of the United Kingdom two year 5 per
cent notes which will mature on Feb
ruary |. The holders of the notes have
he option OF converting them on or
before maturity into twenty year bh
Per cent. bonds of the Government OF
Great Britain, the Government having
waived It's right to require ten days no
tice OF intention TO convert. Interest on
fhe twenty year bonds Is payable free
from deduction OF any British income
taxes. present or future, although the
bonds are not free from the British In
come tax In the hands OF an English
man liable to such tax.