Evening star. [volume] (Washington, D.C.) 1854-1972, 1927-01-12
MEN AND MONEY
BY NJ. S. Rukeyser.
Copyright. 1870

The international stage Is already
being set for another huge dollar loan
by American investors to the Repub-
lie of France.
The recent marked upturn of all
outstanding French external issues in
New York gives a market background
favorable to new financing.
The unofficial step toward stabilize
ton of the franc, recently taken by
the Bank of France, constitutes an
other prop for growing confidence.
The loan is likely to be arranged
much sooner than the public realizes.
A partner of one of the foremost in
ternational banking houses in Wall
Street told me that he expects to see
a banking syndicate headed by j. P.
Morgan Il Co. offer a new issue OF
500, 900 as soon as February or March.
Such an offering will merely be the
forerunner of other credits, which will
help France to stabilize its currency
on a gold basis. This f1nancier be-
lieves that France could readily mar
ket in this country several hundred
million dollars of German railroad
bonds. created as part payment OF
reparatiOns under the famous Dawes
agreement.
Whether the prediction as to the
'nearneSs of a French operation VIII
be fulfilled depends primarily on
political factors. No British or Amer
lean financiers are likely to under
take to finance Frances need until
the French fund their war debt to the
British and American Treasures. Well
informed Wall Street bankers believe
that adoption of the pending agree
ments by the French Parliament is
near at hand.
Franc Believed Saved.
American financiers of influence be-
lieve that Raymond Poincare has sue
ceeded in the delicate task of saving
the franc, which he undertook last
July, following a panic in French ex-
change. Meantime the franc has
more than doubled in value. The de-
hation involved in Poineares stabili-
zation program has taken away from
French exporters the temporary ad-
vantages which accrue from depre-
ciated currency. The immediate effect
of the new situation is a depressing
effect on trade. Whether any gov
eminent can survive in France
through a serious industrial setback
remains to be seen, but influential
Wall Street bankers are taking a
distinctly optimistic view of the situa-
ton.
France feels isolated in being one
of the last to put its financial house
in order, and Is plainly anxious to re-
turn to the informal League of Ma
tons on a gold basis. :.
Germany was the chief foreign bor-
rover OF American capital In 1925.
Fran may be the largest borrower
in 1927.
Which European country will re-
quest and receive the largest loans in
1892? Possibly Russia. Capital is in
ternatfonal, and is lacking in senti-
ment. The revolution will not keep
ca pital from Russia when the condi-
tions of safety seem assured.
A member of great international
banking house foresees important
financial relations with Russia, but
| believes big operations are still five
years off. Nevertheless. American
financiers are already studying the
possibilities. and planning to make
contacts.
Two Chief Barriers.
The two chief barriers at present are
failure of the present Russian gov
eminent to acknowledge the Czarist
external debt and lack of recognition
of the present regime by the Ameri-
can Government.
Bankers believe that in the course of