Loan Floated

In the U. S., there was floated a loan to France of $100,000,000 by J. P. Morgan & Co., the First National Bank (Manhattan) and Messrs. Brown Brothers & Co.* According to M. Etienne Clementel, French Minister of Finance, the money is to be applied "to the reduction of the Government's indebtedness to the Bank of France, which will hold and use the proceeds as it may deem wise for the protection and stabilization of the franc. The Government's indebtedness to the Bank has already been materially reduced since the peak of such borrowings, reached at the end of 1920." The loan was issued in the form of 25-year sinking fund gold bonds. The price of issue was 94; interest at the rate of 7% on the par value, making a net return of 7.53%. The operation of the sinking fund, however, makes the interest much larger. Each year, the French Government will pay monthly instalments to an annual sinking fund of $4,200,000, a sum sufficient to return the debt in 25 years at 105.

* This year, the U. S. has lent Japan $150,000,000, Germany $110,000,000, Canada $90,000,000. The amount of foreign bonds purchased by Americans amounted to $1,136,506,000 -- the highest amount ever bought.