Evening star., 1926-11-09
1926 LOANS ABROAD
TO EXCEED BILLION
Great Flow of Capital Shows
U. S. Replacing Britain as
Money-Lending Center.
By the Associated Press.

By the Associated Press.
NEW YORK. November 9.-The
great strides, which Wall Street,
financial seat of the United States,
has made in supplanting London as
the worlds money lender were meas
ured today in an estimate by bankers
here that well over one billion dollars
in gold will he lent to foreign bor-
rowers in 1926 by the American
people.
This golden stream. which once
seeped principally from sources along
the Atlantic seaboard. now flows in
large volume from the reservoir OF
savings in the great Midwest and
Pacific Coast.
Out of this vast sum Europe will
fashion a financial crutoh to support
the final work Of restoration from the
World War. American loans to the
world are now said to exceed $1o,oOo,-
600 900 and 1t is this pecuniary inter
est that Is fast giving the people OF
the United States what bankers call
the interna tional mind. Nearly S4,-
600 900 900 has been lent in AMEN
lands the last three years.
France Likely to Borrow.
France is expected to come into the
American money market early next
wear for large sums to AID IN pegslns
tho frac at some undetermined STAB
i,ization point and to replenlsh work
inr capital for her industries. and
-. rkers are irving to forecast the
amount of Frances new boffo"lnss:
The total may reach several hundred
million dollars of which probably
third will be for governmental pur-
noses and the rest for corporations.
France will not be permitted to
borrow here until the debt agreement
has been ratified by the French
cha anber of Deputies, but the echoes
Of that last roll call will hardy nave
died away when Wall street peheVes
there will be offerings OF frehch
loans here.
The Morgan syndicate that noa
the recent Belgian staoil1zatlon loan
of $50. 900 900 will, 1t is anticipate teo'
handle the major financing OF 'ne
French Republic. The groundwork
for these loans has ALREADY oeen sur
veved The recent sharp rise IN
u'rench government dollar bonds IS
cold tn he something of a window
dr.esire operation for the floating OF
future loans.
the Investing class are the purchasers
of these foreign securities, the IN
terest of which is yearly returning
here in rising volume. Dealings IN
these securities on the New YORK
stock Exchange have reacned ua4i!
total of s7,oOo,ooo.
Wall Street banks and allied lnstl.
tutions in all parts Of the United
states have made millions IN the mar
keting of foreign bonds. The margin
~ this profitable business, however, Is
dir,inishinR. Borrowing nations OF
F.,,rope have had to pay stln TOLL 1or
roonev accommoda ton, for the Amer
"a ~ nuh,tc had to be educated to pur-
chase this class Of securities.
The bankers and distributors of the
recent $50 100000 Belgian loan are
renorted to have made approximately
e. soo 200 less the costs of overhead
and distribution.
Division of Profits.
These banking profits are divided
among the original terms group. made
I'm Of one or more leading banking
arms. which negotiate directly with
the borrowing government: the bank
ing group, which takes the bonds at
small advance from the terms
group and the selling syndicate com
nosed of leading banks and other dis
tributors which acquire the bonds
from the banking group.
The terms group pays the foreign
government for example. 50 for per
cent bonds: the banking group obtains
them for 80 and the selling syndicate
secures them for 91i2. The investors
then pay "a. AS members of the
terms group are also members Of the
other groups their profits are large.
Belgium is understood to have re-
ceiyed about SO for her 5O.O00 900
loa n. for which the public paid "a.