The Telegraph-courier. [volume] (Kenosha, Wis.) 1888-1946, 1924-11-27

merchant buys goods, for the purpose
of selling them, and sell them as
quickly as possible in order to be in
a position to repeat the operation.
This issue of bonds was paid off at
maturity, October IS, 1920, the British
Government paying one half in full,
and the French Government floating
new loan of $100,000,000 AS these
payments were made to private hold
ers it is evident that the United States
Government never had any paritici-
patton in this loan.
The loan to which the above letter
probably refers was demand loan held
by smaller group of bankers at the
time the United States entered the
war, April, 1917. This loan has had
some publicity through a reference
made to it by the late Walter H. Page,
at that time United States Ambassador
to Great Britain, in Volume II of his
Life and Letters" PIP. 2o1, 272-273,
as follows:
And we came in in the nick of time tor
then-in very truth. If we hadn't, tneii
exchange would have gone down soon ana
they know it. shall never forget the
afternoon I spent with Mr.. Balfour and MI.
Bonar Law on that subject.
The matter that was chiefly pressing at
the time of the Baliour visit was the tact
that the British balances in the New YORK
banks were in seroins condition. Il
should always be remembered, however, that
Great Britain was financing not only herself,
but her Allies, and that the difficult con-
dition in which she now found herself was
caused bv the not too considerate demands
of the nations with which she was allied
in the war. Thus by April 6, 1917, Great
Britain had overdrawn her account with j.
P. Morgan to the extent of $500 900, 900
and had no cash available with which to meet
this overdraft. This obligation had been
incurred in the purchase of supplies, both for
Great Britain and the allied governments s
and securities, largely British owned stocks
and bonds, hid been deposited to protect
the bankers. The money was now coming
due; if the obligations were not met, the
credit Of Great Britain In this country would
reach the vanishing point Though at first
there WIS slight misunderstanding about
this matter, the American Government finally
paid this oyer-draft out of the proceeds OF
the first Libery Loan. This act saved the
credit of the allied countries; it was, OF
course, only the beginning OF the financial
support that America brought to the allied
nished from the American Treasury made
possible the purchases of food and supplies
in enormous quantities.
AS this Bank was a participant to
an important extent in this loan, we
are in position to know how its was
handled and how it was liquidated Mr..
Page was not attempting to write a
detailed or exact account of the trans
action, nor we're his informants attempt
ing to give him such an account, oand
the statement as given is not complete
or strictly accurate. In the first place,
the loan was not in the form of an
overdraft, which is common form of
loan in Great Britain but not permitted
by American banking law. 1t was a
demand loan, secured in the ratio of
two to one by the deposit of high class
American securities which the British
Government had bought or borrowed
from British owners. Mr.. Page. refers
to this collateral.