Foreign Loans

The low 3 1/2% re-discount rate decreed by the Federal Reserve Board has had two effects: 1) to cause U. S. capitalists to send gold out of the country to foreign countries where a higher yield is possible; 2) to cause foreign borrowers to come here and take gold credit out of the U. S. where it is cheap. In either case the gold is going.

Poland, through the Bankers Trust Co., announced a U. S. offering of $47,000,000 in bonds bearing a 1% interest coupon, maturing 1960.

Brazil, through a group headed by Dillon, Read & Co., offers in the U.S. $41,000,000 of an $85,000,000 issue. The rest is to be offered simultaneously in Europe. These 6 1/2% bonds constitute one of the largest international loans since the War.

A German bank, the Central Bank of Agriculture, offers through the National City Co. between $40,000,000 and $50,000,000 in 6% bonds priced between 95% and 96%.

Another German bank, the Commerz und Privat Bank of Hamburg and Berlin, through the Chase Securities Corp. offers a $20,000,000 loan.

The Free State of Prussia, through a syndicate headed by Harris, Forbes & Co. announces a $30,000,000 offering of 6% bonds.

The Agricultural Mortgage Bank of Colombia, through W. A. Harriman & Co., Inc. and the Equitable Trust Co. of New York, offers a new issue of $5,000,000 guaranteed sinking fund gold bonds at 6%.

Negotiations now under way with Germany include the following: German Main Bank for Mortgage Protection, $25,000,000: United Westphalian Electric Works, $15,000,000; Girocentrale, $20,000,000.

Other German territories seeking additional loans: Berlin, Hanover, Saxony, Prussia, Baden, Munich, Breslau, Frankfort, Hamburg, Chemnitz, Leipzig, Mannheim, Essen, Dusseldorf, Hagen.

Still other negotiations under way: $10,000,000 loan to the city of Bucharest; $8,000,000 Hungarian Mortgage Land Bank loan; 86,000,000 Silesian Landschraft Bank loan; $5,000,000 Deutsche Bank and Boden Bank loan.