The Birmingham age-herald., 1919-01-23
AMERICA HANDLES |.
 BIG BRITISH LOAN
By HOLLAND

By HOLLAND
 New York, January 22-(SpeciaL)- Shortly after the departure of J. P. Nor gan for London and Paris there comes the announcement that the British gov ernment has successfully approached the American market so that in a few days formal announcement may be made that there has been floated a S100,O00,000 of British government issues. Mir. Nor gan's firm leads the syndicate that will undertake this financing
 This issue is to be represented by one Of two-year notes and the loan will command interest at the rate of 31a per cent. The transaction itself is a large one and yet it is by no means as large as some of the bankers financing yet to be perfected that has taken place be- tween the united States and our allies. The chief importance or the most signi- meant feature. of this transaction is to be found in the fact that it represents the first complete foreign government financing of a single issue at least since the United States entered the war
 Although it is the first many are yet to follow, for in one way or another SS,- o0,ooO,000, possibly sl0,Oo o,0oo which our allies owe to the United States must be taken care of and in such way that loans will be represented by long time bonds.
 Something of this kind is now under way in the new financing which the bankers will undertake for the floating of sl00,0o0,000 of British government notes. For it is the desire of those who hold these notes to convert them into 20-year 51a per cent bonds of the government of Great Britain.
 The Secretary of the Treasury holds in Snfnathfnp ika tr~,S 10 for the federal government, approximate ly S,OOoO00,000 represented by demand notes, not time notes, which our allies have deposited with the treasury depart ment so that evidence of their indebt- edness to US might be in hand. For the present these demand notes will lie se- curefy in the vaults of the treasury department They differ from the notes which the British government is about to float in the United States through the medium of the American banking syndi- cate. That is from one point of view a private transaction between the bank CTS ana Great Britain. The sanction of the federal government has been given to these transactions so that morally at least, although not legally behind them stands the authority of the United States.
 The demand notes which are in the. federal treasury are essentially the lOTnl Ol IeCGlptS, dCkIlOWleuSlnS lne Day ment to our allies of money or the exten- sion of loans or credit. When peace is actually established and proclaimed after peace treaties have been ratified, then the foreign governments will turn their attention as rapidly as possible to these obligations of theirs which are held in the United States. Men who are of in- flucnce in the government circles and who are numbered among the leading financiers of the United States are of the opinion tha. foreign nations will offer long time bonds bearing a rate of inter- est yet to be determined with which to take up the demand notes. When this transaction is completed then tho federal government will have in it's possession from $S,O0o,00o,000 to s10,00O,000,0o0 in for eign government bonds behind which stand the credit, faith and resources of foreign governments That will repre- sent an accumulation of securities of unquestioned value, greater in amount by billions than any which our govern ment has heretofore possessed.