FOREIGN LOANS

Evening Post, Volume CXVI, Issue 33, 8 August 1933, Page 10

FOREIGN LOANS

KEEN COMPETITION

Mr. Otto Kahn, head of the New York firm of Kuhn,'lioeb,:and-Co., the secorid biggest private bank jn the United States,' ■which is-; largely- Concerned iv railway financing, gave some striking evidence before the U.S. Senate Banking and 'Currency ■ Committee. He disclaimed, on behalf of. lys.firm, all share in what he dramatically described as the wild, undignified scramble for foreign bonds from 1926 to-. 1928, to the detriment of the investing public. "I know of my own knowledge," he said, ''that at one time in those mad years 'there were fifteen American bankers at Belgrade, Jugoslavia, bidding for a bond- issue.. "There'were times when a dozen were in the Latin-American States outbidding each oth^r in a foolish, reckless .search for business.. The price'bjd. was not determined; -by the Value of the securities, but by the "eagerness of the 'bidders to get business.'' •'• ' ' ' ' ; Questioned. on' the ethics of attempting to entice clients from another banker, Mr. Kahn said that in general the code of bankers was against poaching. / The total assets of his firm on December 31, 1931, he disclosed, were £13,395,000 at par—a decline of £10,689,000 since December 31 in the boom year of 1929. Mr. Kahn testified that Mr. Norman Davis received £7000 in 1925 for services in connection with a £4,000,000 loan to the Mortgage Bank of Chile by Kuhn, Loeb, and Company and the Guaranty Company of New York. This was the only foreign loan floated by his company which was in default.