Evening star., 1930-05-23
PREPARATIONS LOAN
!. RATES DISCUSSED
Bankers Are Settling Final
Terms Before Marketing
$500, 600, 900 Issue.
BY JOHN r. SINCLAIR.

the George f10tel IN farlS the Dauk-
ers Of 10 nations are writing down the
final terms of the first German repa-
ration loan of $300,000.000.
In this hotel, where the Young plan
was conceived, three questions will
come up for settlement: l. How much
of the loan will Great Britain under
write? 2. Will the loan and interest
coupons be payable in gold or In the
local currency of the various countries
subscribing? 3. What will be the sale
price (a) to the syndicate and (b) to
the public9
Philip Snowden, British chancellor of
the exchequer, seems determined that
Great Britain shall not take any more
of the loan than is coming 70 & ner
out of the total issue. mo British
money shall leave Britain" appears to
be the attitude of the British banking
and political leaders.
As to the second point, many bank
ers feel that If the coupons are payable
In gold instead OF in the money OF
the various countries, most OF the issue
will be absorbed finally by the United
States. and this will destroy its In
ternational import. SO suggestion 10
pay the coupons in local money-1or
10 years-haS been put forward 10
meet this difficulty.
The third question-what Will the
bonds be sold for?-is of paramount
Japan's recent issue in the United
States sold on $40 per cent OASIS
to the public. Can these reparation
bonds be sold at any better rate?
Money. is q drug on the market today,
with hundreds of millions lying IDLE; q
low interest rate may be expected.
When the Paris conference clears up
these three points the issue will be Of
fered in the various nations almost I'M
mediately.
Business is rolling in." said T. B.
Macauley, president of the Sun Life AS
surance Co, to me the other day In his
office in Montreal.
Never was our business more active
nor the volume SO large as 1t has been
since the beginning of this year. Other
lines may be quiet and even dull, but
life insurance, from our records, Is not
even hesitating."
Rubbing his hands together in his
characteristic way and pacing the moor
Of his private office, this Canadian, full
of enthusiasm for modern business,
beamed with pride in telling how their
new head Office in Montreal, now under
construction, will be the largest build
ing In the British Empire.
Much has been written about this
company's insurance assets, especially
as they relate to common stocks. "A re-
cent estimate has been made IN COM
pairing the yield of the Sun Life in
vested assets with the Yield on 60 dif-
ferent high-grade bond issues. 1t has
been found that while the bonds return
not quite $50 per cent the yield on the
Sun Life assets now stands at exactly
2 per cent.
The Sun life assets have undergone
O revolutionary change since 1920. In
that year the company had 3.3 per cent
of its assets in common stocks and IN
1929 it had 54 per cent. Ten years ago
it had 239 per cent In government and
provincial bonds. as against 4.8 per
cent last year. It had 8.3 per cent in
municipal bonds in 1920 and only 2.3
per cent in 1929.
Other bonds held by the Sun Life to-
tai 31.4 per cent Of the assets in 1920,
as against 11.6 per cent in 1929. Pre-
ferred stocks moved down. These stocks
figured at 11.8 per cent of its assets in
1920 and only 81 per cent in 1929.
Mortgages, real estate and policy loans
were about the same In each case.
But 1t has been in the common stocks
where the big increase in the yield has
taken place.
Conservative stock in well managed,
high-grade, well tested American and
Canadian companies offer the finest OPP
portunity for the life insurance COM
pany We have tested this out for the
past decade and we are thoroughly sat-
isf1ed with the experiment." said Mr..
Macauley.
Not since the first of the year has the
stock market been so dull and listless.
No leadership-no short interest to
speak of-no strength. Some observers
believe that it will remain so for sew
eral months, until business has taken
Q definite upturn.
DR.. Julius Klein of the Department
of Commerce, estimating the average
daily expenditure of the American tour
ist at $40, suggests that Americans
spend their money in the United States
this year instead of abroad, and thus
help to strengthen American business.
The New York Journal of Commerce
opposes this point Of view and says, in
substance, that the Assistant Secretary
of Commerce has got the cart before
the horse-that the ability to spend Is
a consequence and not a cause Of pro-
ductive business activity. THE luxury
trades and the businesses that furnish
amusement and diversion can only
thrive when industries that supply the
basic needs are fourishing," says the
journal.
Tourist trade abroad has been one OF
the saving factors in American export
business expansion. 1t cannot be ignored.
Says the Journal again:
LAS our tariff walls rise, and make
increasingly difficult the entrance OF
foreign goods from countries In our
debt, dependence upon American tour
ist dollars to help redress the one-sided
balance of trade has constantly grown
in importance"
Now If Americans in large numbers
decide to spend their vacations In the
United States and not in Europe this
Summer. many European countries will
find their sources OF income sadly re-
duced and their ability to buy American
goods still further impaired"
The difficulty with the "Spend-at-
home" doctrine Is that 1t raises new
problems far more difficult to solve than
the original one-the cure Is worse
than the disease.
But the chances are that Americans
able to 60 to Europe this Summer will
60, and leave the play OF economic
forces to those who wish to wrestle
with it.
Important American department stores
are buying furs direct from the Sovle,
government. Raw furs come into the
United States free of duty-al except
silver fox.
what will be the popular furs Of the
coming season." I asked Murray M
Singer, the Bergdorf-G Goodman execu'
tive, who has just returned from Russia
"Broadtail and caracul, and for eve.
ming wear ermine, mink and sable" wa
his reply.
what about Russian women-art
they wearing much fur?"
"No-very little. Their women seen
to be more interested in their school!
and their government. Material mat
ters do not concern them much at TIT
moment" he replied.
"Another thing-many short evening