A Popular Loan

Undoubtedly the financial "event" of the past week has been the long-awaited German external loan, $110,000,000 of which, bearing a 7% coupon, was offered for subscription at 92 by a huge syndicate headed by J. P. Morgan & Co.

There had been considerable doubt as to just how the public would take a loan from a recent enemy nation. This was, however, entirely dissipated by the trend of events. The German loan "went across big." So thoroughly had the syndicate done its work, and so attractive did the offering appear to U. S. investors generally, that the issue was very heavily oversubscribed; and more bonds were demanded than were avail- able to deliver.

The German loan was at once listed on the New York Stock Exchange "when issued" ; that is, contracts could be made there which will be settled when the actual bonds, or temporary certificates for them, are printed and ready for distribution to buyers. Dealers who had already sold the bonds to customers, but found that owing to its over-subscription their allotments had been reduced so that they would not have enough to deliver to their customers, were compelled to buy those which they needed on the Exchange. On the other hand, a few speculators bought bonds, not intending to keep them, but to sell out at a profit as soon as possible. As a result of the dealers' demand, prices for bonds on the Exchange at once went to a premium over the subscription price of 92; indeed, at one time they sold over 95. Such a premium on bonds just floated is rare, and indicates better than anything else the popularity of the issue with U. S. investors.