The Sun.
London, England, 1863-04-24 00:00:00

THE CONFEDERATE COTTON LOAN,

A writer in a contemporary says—lf I understand
righ,ly, the loan offered to the Confederate Govern-
mect was £5,000,000; they would only consent to
take £3,000,000, and will not attempt to raise any
further loan here this year. The applications for
the loan amounted to about £15,000,000 in London
and £3,000,000 more abroad. It is said that only
about £1,000,000 has been apportioned in this
country, and of this a considerable amount has been
already paid up in full.

The loan pays 7 per cent. on £9O, equal to 7i per
cent., and by paying up in full, at 7 per cent. dis-
count, yields a further return, equal together to
about 10 per cent. for the first year, the first year's
dividend being retained in the hands of the con-
•ractors. There is a sinking fund of 5 per cent. per
annum drawn half-yearly, commencing March,
1864, to pay off at par. The bonds and dividends
are payable in sterling, so that no loss in exchange
can be incurred ; the price of the cotton is also fixed
in stering.

The cotton will be delivered in war or in peace.
If during war, then 8. d
The cash price of the cotton is
The insurance, at 40 per cent, war risk (valuing
cotton at is. 6d. per lb.)

The cotton would coat

If captured, then Is. 61. per lb. would be recover-
able, leaving a profit of 51d per lb. If not captured
then add, say 3d. per lb. more for cost of war freight
and other charges, thus making the cotton come to
ls. 32d. per lb.; on arrival here the value of said cot-
ton being ls. 9d. to 2s. per lb., would leave a profit
of 5 id to fild per lb.
The cost of cotton in the Confederate States be
ing (for this loan) about £lO per bale, it is
worth about £6OO per bale in the Northern
States ; about £35 to £4O here. I know not
what is its worth in France and on the Continent.

It would be a good investment for the North to buy
up the cotton (as far as this loan could do so)
through English or foreign houses, and hold it for
their account. The export duty is only to be one-
fourth of a farthing per lb. on this cotton ; but if
'he Confederate government impose a duty of id.,
2d., or 3d. per lb. on other cotton, it cannot apply
to this transaction. In case of peace the pre-
mium of insurance would be Only about one-
t -ventieth of the war risk, and the freight
could be got at an equally moderate cost. in
the event of peace the Southern States will re-
quire foreign loans ; were they to repudiate
this small loan of £3,000,000, what capitalists
would contract with them for ten times the
amount ? Assuredly their interest is to keep
faith. In case of war with France or England, or
with both, the fleets of these powers would speedily
open the ports and release the cotton. If one-half
the stock of cotton in the hands of the South be
destroyed it will enhance the value of what is left.
If the South would give in they would be received
back by the North on their own terms, even making
Jeff. Davis next President of the Union, the North
only fighting for empire and a non-disruption of
the Union.

As the Southern States possess about 800,000
square miles of territory it is not likely that the
North will be able to destroy all the cotton. The
North want cotton as much as we do; the French
still more so.

As an investment or as a mercantile transaction,
it is very desirable to understand the true value of
this Joan. If the contractors publish from time to
time the amount fully paid up it will be seen how
much is entirely withdrawn from the market;
otherwise they alone possess such information
against the public.
If the stock rises to a premium of 10 per cent., the
fundholder or speculator might think it a good re-
turn and realise, but the cotton-holder might not be
satisfied to do so, 10 per cent. being only about *d.
per lb. on the cotton ; he would no doubt hold for
several peoce per lb. advance.
The manufacturer may probably be glad to
know that in holding this loan he is in alt proba-
bility securing a supply of cotton for future manu-
facture, and the cotton speculator may be glad to
get into stack at 6d. per lb., to ease his possible loss
or any stocks held by him ;here. in case of a fall it
price from any sudden termination of the struggle.
Some persons represent this as a loan to encou-
rage or promote slavery, instead of its being a mer-
cantile transaction ; if so, do not all these persons
encourage slavery when they lend their money in a
more indirect way—that is to say, by purchasing
or consuming slave-grow❑ sugar, coffee, rico, to-
bacco, snuff, cotton, fabrics, rum, molasses, Indian
corn, &c. ?

Do we not lend monies to Brazil and:the Spanish
colony of Cuba ? Do we not even lend our cash to
the infidels ? Why, then, if on favourable terms,
to the Southern Confederated States ?