The New York herald., 1921-05-16
FRANCE WILL MEET
REQUIREMENTS HERE
Bond Issue of 800, 100000 to
BE Made After ReparatiOn
Is Settled.
POSITION GROWS STRONG
German Bonds Will Not Be Of
fered Until That Country
Shows Real Progress.
POSITION GROWS STRONG

speciuI Cable to THE New YoRK HERALD.
Copyright, 1891, by THE NEW YonK HERALD.
New York Herald Bureau,
Paris, May IS.
The first financing that France Will
do in America following acceptance OF
the reparations terms win be an imme-
diate bond issue Of 500, 900, 900 to cover
all requirements In America in the way
of maturing obligations and interest for
the remainder of the year. Negotia-
tions to this effect were virtually COM
pleted to-day and formal announce
ment probably will be made Monday.
The treasury officials conferred for
two weeks with Thomas w. Lamont and
members of the Morgan-Harjes house
regarding this loan. which is designed
further to strengthen Frances financial
position In America. regarding which
there Is now the greatest optimism here
This loan Is apart from one which Is
still under discussion and which may be
issued later in the year in America for
the benefit OF the devastated regions.
Tho Government considers it's financial
position in America stronger than at any
time since the outbreak of the war, 1t
naturally having been strengthened re-
Gently by Frances rise.
To Make Issue Attractive.
Frances definite outstanding obliga-
tions are treasury notes reduced under
$1,000 900, Paris bonds totalling $780,
100000. maturing in the autumn, and va
rious other items and interest. all OF
which will be covered by the new loan.
The terms are not yet known, but in
view of the recent rise in French secu-
rifles 1t is understood that the new Is
sue will contain some attraction de-
signed for American investors and will
be close to the present market for
French obligations.
An impelling factor with the Govern
ment has been the result of the new
Burlington issue. Important financial
conferences here have covered not only
this but further initiation and German
bond prospects. The initiation depends to
a considerable extent on how the Ger
man reparatlons problem is worked out.
1t Is realized that the receipts from
Germany for the first six months will
not be sufficient to meet the charges
and some further initiation may have to
be considered.
Go Slow on German Bonds.
This question probably will remain
undecided for another two months.
Treasury officials fully understand that
for a year or eighteen months at the
least German bonds will find no consid-
cradle market In America and no early
attempt will be made to offer them until
the moment arrives when the semi
investment and semi-speculative inter-
ests In New York become convinced that
Germany Is making real progress. When
that moment arrives there will be an
open offering OF bonds in small amounts
At~-4
will be possible to market only small
amounts at the start
1t has been pointed out to the treas
ury that no American interests are
likely TO take even limited lots unless
they see a chance for handsome profit
and the bonds may be offered at big
discount. 60 being the figure mentioned
by some American experts.
1t IL also well understood hore that
the Allies must get together and work
out some common plan for marketing
the bonds so that each will get a repara-
tlons commission as otherwise one ally
could break the market.
French financial circles this week wit
messed a peculiar situation. Although
everything pointed in Frances favor and
exchange rates responded satisfactorily
to the German acceptance Of the ulti-
matum securities, both French and for
eien, showed comparatively little ac-
tivity in most cases standard groups re-
cordng a marked decrease in values.
As usual this IL explained by specula-
ton both in the home and foreign mar
kets. but high Bourse officials declare
that this was really the result of Ger
man Vaccinations. as IL is known that
German bankers discounted the excite
ment over Upper Slesia days before IL
actually arrived
Meanwhile the report OF the Bank or
France shows up more encouragingly
than last week, with a diminution In ad-
vances to the Government Of 225,000, 600
francs and reduction IN note circula-
tion Of 100000 Nevertheless pres
sure still ia being brought TO bear by
Parliamentary experts to obtain the aid
OF bankers in obliglng the state to isue
$4,000 100000 to 100. 900. 900. 900 paper
francs as needed In the event OF trouble
with Germany. which we'll informed
circles believe 90 be Inevitable.
IL is considered probable that there
will be an immediate issue OF Treasury
bonds totalling 5000, 100000 francs
These, as In the case OF the national
defence bonds. will bear 6 per cent In
terest, but instead OF being payable IN
six months will not mature for two years
The Bank Of Frances discount rate
remains ut 6 per cent, with plenty OF
money available from private bankers
al 4 per cent. on short terms. The gem
eral discount rate IS 4Js per cent