The New York herald., 1920-01-22
WARBURG TO HEAD
INVESTMENT TRUST
Former Reserve Board Men,
ber Said To Be Backing
Company.
PLAN s5o,ooo,ooo CAPITAL
Corporation Is Third Projected 10
Deal in Foreign Securities for
American Market.
!. PLAN s5o,ooo,ooo CAPITAL

One OF the most ambitious projects for
company to promote foreign business yet
conceived is being discussed by group
Of local bankers. Il was learned yesterday.
This proposed company, which is en-
tirely distinct from any others recently
discussed in Wall street, will have a
capital OF possibly So,oooooo. 1t is under
stood tnat the group which purposes or.
ganizing the new company is headed by
Paul M. Warburg, formerly member OF
the Federal Reserve Board and prior to
that time q partner in the firm of Kuhn,
Loeb 6 Co
The business Of the proposed corporation
will be TO purchase securities Of foreign
countries with view to establishing
credits here. II will follow the lines OF
English investment trust companies which
make such investments and either resell
their foreign securities to British investors
or issue their own debentures against
those securities
AS the American public is not familiar
with foreign securities, especially such as
are issued by private corporations. IL is
likely that in the beginning at least the
new investment company will content it.
IN it's treasury and selling its own de-
bentures to the American public.
News OF the impending organiSa ton OF
*o,uoWO investment trust company yes
terday followed announcement this week
that two other smaller companies of sim.
liar nature are being organized. One OF
these is the New Issues Finance Corpors.
ton. which has received its charter under
he laws Of the State Of New York. ant
ultimately will be capitalized at SO tf0, 90
Another company Is to be formed with
a somewhat larger capital. It has not
yet received its charter
These recent fornations are the latest
in new field of banking for this country.
One OF the first to enter this field was
the firm of j. p. Morgan g. Co. Some
weeks ago that firm announced that the
Foreign Finance Corporation had been
chartered to do a foreign investment busi-
ness. This company has offices in the
Bankers Trust Building. Messra. Nor
gan & Co. subsequently organized an
other corporation for foreign trade known
as the Foreign Commerce Corporation Of
America. It's field will be distinct how
ever. from, the Foreign Finance Corpora
ton. The latter will do a. banking busi-
ness while the Foreign Commerce Cor
poraton will engage in q strictly COM
mercial business.
Further organizations OF investment
trust companies arc likely to follow these
pioneers in this new field of interna tionaI
banking because of the unusual oppor-
tunities to do business in foreign securities
created by the extraordinary foreign
credit position. bankers said yesterday
The Investment trust business is an es-
tablished one in England and has figured
largely III the favorable foreign position
which England occupies in the world.
II is an entirely new banking enterprise
in the United States. but bankers believe
that. after the American public becomes
more familiar with the unusual oppor.
tunties for investment il offers, it will
become as firmly established in this coun-
try as II is in Great Britain. They point
10 the rapid growth of the acceptance
business in proof of this prediction. a few
years ago the acceptance was an unknown
credit instrument in the United States.
To-day the acceptance business has reached
daily volume of many millions of doll
lars and is still In it's infancy.