The Express.
London, England, 1862-08-11 00:00:00

THE EXPRESS, MONDAY

margin of profit to the original subscribers , but,
considering the volcanic state of parties in those re-
gions, the fact that Venezuela has yet to earn a
character for moral respectability, and the im-
portance of the contingencies depending on the
life of the now aged PRFSI DENT, it may fairly be
argued that a large future profit will be only a due
guerdon for bondholders who now trust a country
which hitherto has not shown herself deserving of
trust. Venezuela has betrayed her bondholders
in the past ; the present is the last opportunity she
will be allowed of redeeming her character.
The new Portuguese stock fulfils the reasonable
requirements of those who hold that a new
foreign loan ought not to be taken unless it yields
a present profit, as well as the prospect of a per-
manent one. This scrip is at about 2i per cent.
premium—a result which is probably in no small
degree attributable to the confidence inspired by the
absorption of the stock for exportation to Portugal.
A more encouraging feature than this there
could hardly be, and, in the present state of the
money market, it is not surprising that the wide
difference between British Three per Cents. at 93,
and Portuguese Three per Cents. at exactly half
that price, or 46k, should strike attention. The Go-
vernment of Portugal has only to act straightfor-
wardly
and to study the interests of the bond-
holders, and it will find that the elevation of
its credit remains, from this time forward,
entirely in its own hands. Under proper
management the Portuguese funds ought to rank
at least on a par with those of Spain, having
regard to the existing circumstances of the latter ;
for Portugal stands now acquitted of all past
accusations, while Spain still has the unsatisfied
certificates pressing like a nightmare upon her
financial repose. Moreover, a fresh proof has
been given to her by the London Stock Exchange,
even within the last week, in the shutting out
and shutting up of the Peninsular Irrigation
Company, that there is no hope for her in this
market until she does justice. Penance is not
required, but justice is indispensable.
Of the recent series of foreign loans, the only
ones that have proved real prizes to the sub-
scribers are the Moorish and the Egyptian. The
former has ruled at 10 to 12 per cent. premium,
while the latter has reached 18 per cent. premium.
These are profits worth making, and serve to show
more clearly than ever that, while the permanent
success of foreign loans depends upon the ob-
servance of numerous conditions, the most
im-
portant are a moderate price of issue, a moderate
amount of issue, and a judicious arrangement of
special guarantees on the bondholders' behalf. It
, seems evident that where a special Chan-
, nel can be stipulated and established for the
, transmission of hypothecated revenues from the
, foreign borrowing country to London, several
signal dangers, resulting, perhaps, rather from
financial laxity than absolute dishonesty, are
; avoided. The Moor has had very clever counsel
in London, and the good sense to take it, and
thus enjoys the strange gratification of seeing his
credit rank above that of many States of far
, higher pretensions. His securities (reckoning on
, the five per cent. basis) stand nearly equal to
, Russian, vastly above Spanish, Portuguese, and
Turkish, and distance Italian by no less than 20
; per cent.

Some foreign loans, as we see, prove blanks,
others brilliant prizes. The number of the latter
is not so large that the public are likely to be dazzled
and allured into danger, yet it may be useful
to call attention to a case which serves to point the
uncertainties and anxieties of foreign investments.
When the last Turkish Loan, representing
8,000,0001. of stock, was taken in England, it
was known that the proceeds were to be ap-
plied to the redemption of the depreciated
currency. But the amount of the loan, as was
also known, was not sufficient for the purpose, and
under the advice of Lord HOBART and other com-
petent counsellors it was determined that the terms
of payment to the holders should be 40 per cent.
in cash and 60 per cent. in Turkish internal stock.
It is significant of the usurious treatment to
which Turkish credit has been subjected, and
of the wretched bargains which the Govern-
ment has been iu the habit of making, that the
holders of the redeemed cabas, after being put
in possession of their 40 per cent. in specie out
of the English loan, have found themselves in a
position to sell their internal stock at a price
enabling persons who deal in this sort of business be-
tween Turkey and London to offer it here at about
33 per cent. This internal stock has of course
none of the special hypothecations or other valu-
able rights appertaining to the Anglo-Turkish
Loans ; and it needs no demonstration that a loan
raised by a foreign State in England must, in most
instances, stand at • great advantage over the
internal or domestic stock of the same
country. This superiority is strikingly observ-
able in the present instance, because
there is no satisfactory check upon the amount of
the issue of domestic stock in Turkey, and because
the holders are subject to the risk of all those
irregularities and paper settlements which have
always proved the bane of Turkish finance. The
London Stock Exchange will, oonsequently,always
be closed against the Turkish internal stock,
which can only be dealt in here privately, and,
should troublous times arise, might have no market
value whatever. Yet its importation, from the
great disparity of price, is troubling the market
for Anglo-Turkiah Bonds, and illustrates, as we have
said, the anxieties of foreign investments. There
is not the slightest question as to either the
ability or the desire of the Turkish Government
to keep faith with its English creditors, and to
pay them their just annual claim. But when the
effects of the irregularities and false system of
the Turkish administration are thus brought home
to its English bondholders, in the palpable form
of • depreciation of their property, it is natural
that they should feel dissatisfied, even though no
flaw is to be found in the security they hold,
and though their investment has shown a profit
from the very outset. We cannot let slip this
opportunity of once more pointing out that when
investors transmit their money abroad in search
of 11 or 12 per cent per annum interest, they
have no right to regard more than one-half of
that amount as net income, but ought, in pru-
dence, to put the other moiety on one aide, so
as to form • guarantee or insurance fund against
the increased risks, from depreciation and other-
wise, attaching to all investments that profess to
yield such a high rate of return.

THE hf —Most of the members of the
cabinet have quitted Loudon since the close of the paths-
' meatary sesmon. Lord Palms stop returned to town on
Saturday night from Sheffield. Mr. Gladstone is staying at
Hawards° i&ello. Sir George Grey is the minister in at-
Madame cia the Queen at SalmoraL Mr. Milner Ganes is
on board his yacht off the eastern coast. Lead finuaville re-
turned to town on Saturday from Ashbridge, Herts. The
Duke of Newcastle, the Dube of Somerset, and Sir Charles
Wood are absent from the metropolis. Vismaat Palmation
will, it is expected, shortly= to Walmer Castle,
his official maid/acts.—
WORKIWO MIEN'S COLLEOZ, 45, GREAT 011110ErD•
!frown. W.C.-11se vacation tmen of this institution
(August 4to October LI) his cominsoced. Elementary and
advanced classes ban hiss formed in arithmetic, algebra,
=b47, boot-keeping, English (rumour and history,
Latin, Gorman', botany and drawing. Class fees—
Drawing (openterm every evening for praotioe), 3a. Other
ohms' is. Ow