British & Irish Bonds

Were a caricaturist to sketch a situation that last week developed on the U. S. investment scene, he might show President E. H. H. Simmons of New York Stock Exchange as a headwaiter of a crowded restaurant, and Chairman Charles Hamilton Sabin of the Guaranty Co. as a caterer serving with his own hands a new dish to his gabbling, gobbling customers.

Mr. Simmons as head of the Exchange suddenly announced the listing of the Kingdom of Great Britain & Northern Ireland 4% bonds and Mr. Sabin's investment company was already prepared to sell -L-2,000,000 ($10,000,000) worth. Buyers demanded more than the Guaranty Co. had to sell. But -L-386,777,664 ($1,933,888,000) more of the same issue have already been sold by the British government and conceivably, but not probably, U. S. investors may freely trade in them through the new permission of the New York Stock Exchange.

Results. These bonds are listed in the Exchange in pounds sterling, a -L-200 bond being treated as though it were a $1,000 bond. This is no innovation. Yet it does give impetus to the centering of world finance in the U. S.

Another result is that the way has been made for listing another and greater British security, the -L-1,950,000,000 ($9,750,000,000) 5% British war loan. If that is listed it will be the greatest bond issue ever offered to U. S. investors, exceeding by $3,500,000,000 the Fourth Liberty 4 1/4% loan.

Another result is the further enhancement of Mr. Sabin's prestige in international finance. His handling of one-half of one per cent of the British & North Irish issue was as weighty as Albert Henry Wiggin's deal the week before. Mr. Wiggin's Chase Securities Corp. formed the $10,000,000 Finance Company of great Britain and America Ltd. with Sir Alfred Moritz Mond's Imperial Chemical Industries (TIME, April 23). Both transactions enable U. S. capital to flow to England, and thence farther afield.

Still another result was the immediate rise of the pound sterling's exchange value. It went to $4,884 (par is $4.86), almost the point at which it becomes profitable to ship gold from the U. S. to England.