The New York herald., 1921-05-24
FRENCH BOND SALE
Is NOW UNDER WAY
Books for S100,000,000 Issue
Open To-morrow-Morgans
Caution Syndicate.
MUST KEEP AGREEMENT
Participants Reported as Max
ing Offers Contrary to It's
Terms.
MUST KEEP AGREEMENT

Steps were taken yesterday by j. p.
Morgan Co. as syndicate managers IN
advance OF the opening of books to-
morrow for the si0o.o0o.o00 71a per
cent French Government loan to insure
strict compliance with the selling agree
ment. 1t was reported that certain
dealers had offered TO pay par and in
terest for City of Paris bonds in ex-
change for the new issue and that others
had offered 10 accept other existing
bonds at a slight premium over the
moriset IN order to make Q record IN
sales of the new issue. The selling
commission OF 4 points to the members
of the distributing syndicate, It was
thought. led to the unusual methods at
tempted In order to sell additional
bonds. Cognizant Of that development,
which Is similar to offers made in con-
nection with the recent s230,000 900
Great NortherD-Northern Pacific bond
distribution, J. p. Morgan & Co. prompt
n Nnt kilograms to every member OF
tbs distributing syndicate as follows:
Instances are reported of partici-
pants offering to pay par and interest
for City of Paris bonds in exchange for
new French 71aa. This is directly con-
trary to terms OF syndicate letter with
respect to taking bonds In trade at
prices above market. Syndicate man
ayers reserve full right to consider such
transactions as violations OF syndicate
agreement IL adequate proof is forth
coming in any specific instance re-
ported"
A purpose OF the new financing Is to
provide funds to meet the outstanding
s50,0o0.00 Of Paris bonds when they
IL.
Paris bonds is somewhere between 99A
and 80 lie. Consequently any offer OF
par and interest would have been sub
stantial inducement to subscribe to the
new issue, but such offers are banned.
A market for the new 7ia was made
yesterday on a when issued basis In the
New York Stock Exchange, and the ini-
tial and only sale was made at the
Offering price of 95. The amount sold
was $4,000. The French Government
will receive $90.000.000 for the new
bring $95.000.000 all told. The large
margin is said to be due to the expense
and the effort Of selling bonds at an
average sale Of $4,000 or less.
Subscription books for the new $780,
100000 Of the French Republic twenty
year external gold loan 71a per cent.
bonds, which is expected to be the last
external loan to be placed hy That coim-
try, will open at 10 a. NJ. tomorrow.
Amounts due on aliotments will be pay
able at the Office Of j. +. Morgan & co.
on or about June 10. In the opinion OF
counsel the bonds are . legal investment
for savings banks in Connecticut, Yer
mont and California. The members OF
the underwriting syndicate are as fol-
lows:
J. P. Morgan & Co., First National
Bank. New York: Brown Brothers & Co.
National City Company, Harris, Forbes
& Co, Guaranty Company of New York.
Bankers Trust Company, New York;
Lee, Hlgginson z Co, Dillon, Read s.
Co.. Kiddcr, Peabody & Co. 7. and w.
Selignan & CO., White, Weld & Co.
Spencer Trask & Co., Kissel. hinnicutt s.
Co., Lazard Freres, Blair q Co, Inc.
Bonbright g. Co. Inc. /: f. RI. Rollins (
Sons. Clark Dodge & Co.. Halsey, Stuart
& Co. Inc; Chase National Bank. Ma
tional Bank of ommerce In New York.