They were enabled to do this because their London branches were
independent institutions whose independence was recognized by the
British government. The London branches were thus liquidated,
collecting in and meeting their obligations at maturity, so far as
possible.

Liquidation in acceptances is one of the keys to the success of the
English loan. While England had the ability before the war to discount
$2,500,000,000 of acceptances, and with the present expanded base of
the Bank would, without war, have the ability to discount
$3,000,000,000, or three times our national debt, there is now no large
business offering. The discount credits can therefore be measurably
turned to the war-loan account. One of the biggest acceptance houses
in London told me that the post-moratorium bills, or the new
acceptances made after the moratorium, could not amount to more than
80,000,000 pounds, or $400,000,000.

With the liquidation on account of pre-moratorium bills and the absence
of new business I should estimate that the London money market was able
to take care of the 350,000,000 pounds loan put forth in November by
the government without much regard to the investing community.

With expanding trade and confidence, English investment interests can
absorb the major part of this huge loan before next summer, when
another loan of about equal size must be put forth, according to
present calculations. This second loan will probably be for three or
four hundred millions pounds sterling, bear 4 per cent, and issue at
par. The November loan was issued at 95 per cent and it was announced
in Parliament that the Bank of England would loan the issue price at
one per cent under the Bank rate.