The Birmingham age-herald., 1924-03-29

That France was granted extremely fla vorable terms, One moment you will be told that France has already drawn heavily upon this credit; the next you may be told that 1t has not and never has been the intention of-the Bank of France, actually to use a single dollar of the money. s.<rsss ..s
 Now, what are the facts.
 l can state authoritatively that the rate of interest is less rather than more than the legal rate of interests in the state of New York, which Is per cent.
 can state also that interest will be charged only on whatever amount the Bank of. France may call upon the American bankers to furnish.
 No s1oo oooo, 900 loaif has been extend. &ed to France. When borrower ob- tains a loan he naturally has to pay interest on the full amount Of such loan. The Bank of France is not pay interest, as already stated, only on such bart of this sum as may actually be called for by the borrower. se
 Of course, neither American bankers nor any other bankers are in business tor pleasure, but for profit. It was necessary for the Bank of France in he first instance, and for J. P, Morgan & Co. in the second instance, to offer hn tnducement to bankers, to pledge Themselves to furnish such a large emount of money. Just what 1t was ound necessary to pay I do not know, fince the lenders take the attitude that hey never publish details of their Transaction with borrowers. " I am as-' ured, however, by those in possession pf the facts, that the terms named were kegarded by the Bank of France as Rmiuently fair and reasonable. One banker associated with the trafsaction elis me the Bank of France expressed &tself as delighted" with the terms of, &ered, - N @ How much of the $1oo ,O0o 900 credit has already been utilized by the French bank, don't pretend to know. My impression, however, Is that no consid- #rable amount has yet been called for. Moreover, if the French franc should 3naintain anything like the strength 1t has maintained ever since the $1OO ,000,- 300 loan was announced, the indications lre that the American baEkers will not zpe called upon to pay over many mill Hios, of the amount pledged,
 The battle of the franc" was not von by rushing to- the firing line over vheimtng financial reserves, but by the nere announcement that a reserve of 100, ,000, 900 had been arranged here and
 
 So follow at important financial centers. 4. E .
 Said q banker connected with the big Transaction; 3~s4F ss
 eff you have child Who has been aughty sometimes it isn't necessary to &pank him. Just telling him that you Vill. spank him unless he behaves him. z3elf is often enough to make him stop sutting up.' ,~ < .i, ] As to whether J. P. Morgan & Co. nd the American bankers associated with them in the credit received a Hedge from France that she would ac- ept the terms and conditions laid own in the Dawes report, I don't now. This, however, do know: Be- ore any American bankers would gree to extend huge credit they alked very plainly to the French as to heasures which must be taken in the Fay of reducing expenditures, handling axes; curtailIng borrowine,.letc. Had France taken the stand that such mat CTS were nobody's business but her wn, then you can depend on it that here would have been no $100, 600 QUO redit. Lenders usually want to know efinitely how their funds are going To be used. ..5 -.s. ,,4sSs ', s IT, It was so in this case.
 The American public, 1t may be dded, is not to be invited to take any art of this "loan." In fact, it is not Fn any sense loan to be raised by the ssuance of securities. It takes the orm of the extension of a bank credit uch as banks constantly extend to lients. The Morgan firm itself shoul- cred a large part of the credit and Imply invited various bankers to fur ish the balance, provided tine Bank of France should actually request the honey.
 The foregoing facts should clear way widespread misconception con erning this historic international finan- ial transaction.-(Copyright, 1924, by B. C.. Forbes.)