Henderson daily dispatch. (Henderson, N.C.) 1914-1995, 1937-04-07

American bills for war supplies, sterl-
ing exchanges always was soft. From
the beginning of 1915 Morgan's had
been pegging it with a $4,000 900 de-
nland loan made by them to the
Bank Of England. The support began
to fail of its effect early in the sum
ner of 1915, and when in August the
British failed to provide for continu-
ance Of the Morgan bolstering of the
pound, Morgan got out Of the sterling
market.
All financing of Allied purchases
was in the air in August, 1915. Nc
Adoo, Lansing and others asked the
President to take the lid off loans.
Finally, Wilson consented to a
Franco-British loan in an oblique
way:
THE WHITE HOUSE
Washington, Aug. rs, 1915. 49,.
The Secretary of State.
My dear Mr.. Secretary:
My opinion in this matter, com
pendiously stated, is what we
should say that parties would
take no action either for or
against such a transaction" but
that this should be orally convey
ed, so far as we are concerned,
and not put in writing.
hope that this is also your own
judgment i'm the matter.
Faithfully yours,
w. w.
The First Loan
The first Anglo-French loan in 1915
was denounced by DR.. c. J. Hexamer
as "nefarious plot" to rob the Anne
rican people of thei savings" and
defended by James J. Hill as "of far
far more Importance to the United
States than to England Banking
houses engaged in underwriting the
loan agreed with Hill that it's fail
can prosperity.
A $500,000,000 flotation of five per
cent, five-year, unsecured bonds was
decided on. The underwriting was
at SO, and the bonds were offered to
the. public at SO. The syndicate made
a profit of 100000 on the undertake
ing.
In this case, as in succeeding loans,
little if any, of the money borrowed
by the belligerents left the United
States. It was paid directly by the
bankers to munitions makers, food
manufacturers to subscribe. Loans
and purchases were interwined every
where. Some $89,000,000 of the first
Anglo-French loans was taken up by
munitions firms and others supplying
the Allies.
Pressure was used on them because
the American security market, un-
usued to foreign loans and worried by
the war, was distinctly leery of Allied
bonds. In spite of the careful effort
to "set the stage" by propaganda and
other means, the investing public was
not anxious at first to subscribe, nor
did it do SO. Fortunately for the syn
dictate, John Shelton Williams, comp
troller of the currency, had given it as
his opinion that the loan was a legal
investment for national and Federal
Reserve banks
Morgan himself made one speech to
help sell the issue. At a meeting of
bond house representatives, he said:
This bond, in my opinion, is not a
war bond. 1t is giving Americas Gus
toners time: the best customers that
.,
ask for time to pay what they are
buying here. It seems to me that a
country which is starting out to be a
world power in trade must learn. that
1t must give its customers time, wise
ly, properly, when their credit deserv-
es IT, as a bank has to do, and, there
fore, this is not pro-Allied affair or
anything else; it is a pro-American af-
fair, and that only"
MOrgan-SpOnsOred Loans Repaid
All MOrgan-Sponsored loans to
the Allies were repaid. About 400,
600 American investors bought Al
He'd bonds prior to American en-
try into the war.
Not Morgan, whose interests lay
with U. S. Steel, but Charles M
Schwab, was the master salesman
who made the United States the chief
source OF Allied munitions. Sir George
Arthur, biographer of Kitchener. tells
the story:
I'm October, 1914, the Bethlehem
Steel Co., offered a few hours ontion
on 1leid gun ammunition, to be de-
livered In IL months, Within four
hours the offer was accepted, and Mr..
ScnauD crossed the Atlantic to see
Kitchener. This war Kitchener said
to him, is not going to be short one.
| foresee five years of it at least. I
want you to pledge that control of
the Bethlehem Steel Co., will not be
sold by you and your associates under
five years from now. The agreement
was made on the spot and the i'm
mense capacities of the plant secnr-
ed for the Allies for the rest Of the
war"
Morgan Uses Pressure
Bethlehem and other companies had
difficulties with British authorities
of one kind or another. In the fall
of 1916 the British attempted to can