THE AMERICAN LOAN

Evening Post, Volume xc, Issue 79, 1 October 1915, Page 7

THE AMERICAN LOAN

ITS TERMS CRITICISED. EFFECT OF HIGH INTEREST. LONDON, 30th September. Stock Exchange and financial circles are relieved that the United States loan has been arranged, but are not 'enthusiastic over the terms. They point out that it is a good bargain for the lenders. The interest, with the premium for redemption, is 1 per cent, above the British war loan. This is very high, considering the benefits that will accrue to American trade. Moreover, it is doubtful if one hundred millions sterling will be sufficient. The terms will be a, handicap if another loan is necessary. The Manchester Guardian hotly criticises the distribution syndicate receiving one million sterling, and the fact that the issue is free of British taxation, and hesitates to believe that the British Government authorised such terras. Instead of France getting credit for Britain's better credit, we are suffering from France's worse credit. The interest^ is practically 5| per cent., representing a decline from 4^, which will depreciate the second British war loan to the extent of £125,000,000, or more than the whole amount received from America. The financial papers declare that the Americans have driven a hard bargain. " If the loan succeeds in restoring the exchange rate," they say, "the national gaiD will be a ' valuable set-off to the stiff terms. Thib is the paramount consideration.^