The Sun.
London, England, 1865-08-07 00:00:00

WOOL

The public sales of colonial wool will be commenced on
Thursday the 17th inst. The arrivals comprise 117,440
bales, consisting of 34,385 bales from Sydney ; 15,714,
Victoria; 10,477, Van Dieman's Land; 4,116 Adelaide;
501, Swan River; 34,753, New Zealand ; and 17,494 bales
from the Cape of Good Hope. The business doing in

Particulars. 1851. 186! 1863. { 1864. 1865.
Stock this day.... 52.192 30.683 41.180 ( 45,`.:90 28.334
Price of Y.C. 44,11:1 :o 1E461 so 43831 to 41591 to 42,, Od to
43s 6d 431 91 -s Cd —a Od 428 dd
Delivery lastweek 5,465 1,467 1,0`,2 8)2 1,528
Ditto from June 1 16,527 14,649 8,86) 9,3 n 13,024
Arrivals last week 1,431 2,791 1,927 980 373
Ditto from June 1 12,261 12,020 12,355 9,662 8,876
Price of Town .... 49s 3d 50s Od 41s 3d 43s Od , 44. Gd

The Conversion and Unification of the

Ottoman Debt•

TO THE EDITOR.
Sir,--The conversion of the Ottoman Internal
Debt is fixed for the first days of August.
The opposition to the measure naturally aroused
by the many disappointed interests is therefore at
an end. It has certainly delayed an operation the
soundness of which is not disputed, but it has suc-
ceeded neither financially in burking it, nor politi-
cally in shaking,,the position bf the present advisers
of the Sultan.

It is only fair, therefore, that those interested in
the conversion should be made acquainted with the
real facts of the case. These, with your permission,
I will lay before your readers, neither advocating
the cause of those who have been assailed, nor en-
deavouring to turn the tables on the assailants.
The liabilities of the Ottoman Empire are divided
into two categories—the External or Hypothecated
Debts, contracted, as their designation implies,
abroad, and secured on special sources of revenue ;
and the Internal Debt's, known principally under
the generic term of Consolides, issued at Constanti-
nople alone, and therefore dependent only on a
compact between the Porte and its subjects, and
secured on the general credit and resources of the
Empire.
The External Debts, with the exception of one
which is guaranteed by England and France, bear
an interest of 6 per cent., with a sinking fund of 1
per cent.
The Internal Debts, for the most part, bear an
interest of 6 per cent., with a sinking fund of 2 per
cent. In both cases the sinking fund is applied to
the payment of obligations at par by annual draw-
ings. _ _

This state of things was evidently unsatisfactory
to investors, and therefore damaging to the country.
The public debt of a State should be of one uni-
form value, and rest on the same security. An in-
vestor wishing to purchase French or English stock
can do so almost without inquiry. The investor in
Turkish funds meets with difficulties which one not
acquainted with finance does not care to encounter.
He finds two descriptions of securities of different
value, each description further subdivided into
unequal gradations. Thus a complicated system
depreciates public credit even where the security,
if carefully examined, would be found satisfactory.
Meanwhile the general credit of the country is
diminished by each successive hypothecation.
It was therefore the desire of the Government,—
first, to establish for the future a uniform and nor-
mal system of public debt, reposing, not on special
mortgages of revenue, but on the general faith
and resources of the State ; secondly, to reduce
such existing debts as could be reached into this
one system.

This object was accomplished by the enactment
of three laws. These laws established a system of
public debt, to be called the General Debt of the
Empire.

A Great Book is instituted, in which all future
debts of the Empire are to be inscribed, under the
direction of a high officer of State, to be called
Governor of the General Debt.

These debts are to consist of obligations at 6' per
cent., with a sinking fund of 1 per cent. The obli-
gations aro to be printed in Turkish, English, and
French, bearing a fixed value in the currency of the
language. The interest is to be paid half-yearly, at
a fixed rate of exchange, at Constantinople, Paris,
London, Amsterdam, and Frankfort.
Tho sinking fund is to be employed in the follow-
ing manner :—A sum of 1 per cent. on the original
nominal value of -the bonds issued, together with
the interest of bonds previously amortised, is to be
annually applied to amortisation. With this sum
bonds are to be purchased to the nominal amount of
1 per cent., at the market price of the day. The
difference between the market price of the bonds
and their nominal value is to be applied to a reserve
fund, which will preserve the equilibrium of credit.
This institution, perhaps, requires elucidation.
Assume a debt to be created of the nominal value
of one million sterling. One per cent. on this is
£lO,OOO, and this amount will be annually appro-
priated for the amortization. But the market price
of £lO,OOO Turkish Stock may only be £5,000 or
£6,000. Therefore, of the £lO,OOO set apart for
amortization, £5,000 or £6,000-will be applied for
that purpose, and the remainder for the reserve
fund.

Thus, if the stock remain at 50—the price of issue
—an accumulation of the reserve fund will amount at
the end of 37 years, when the debt will be finally
amortized, to a sum equal to the whole amount of
the debt. Meanwhile, if Turkish credit be bad and
Ottoman funds be low, the reserve fund increases
in amount, while it decreases only in proportion to
the rise of public credit. _ _ _

Precautions are furthermore taken for the due
administration of the new debt. By a clause in the
law no fresh inscription can be made, except after
due provision for the payment of the interest and
sinking fund thereon, either by an increase of re-
venue or a saving of expenditure ; while the opera-
tions of the reserve and sinking funds are subject to
the supervision of a council composed of leading
merchants, native and foreign, resident at Constan-
tinople.

Thus a species of debt has been established con-
sistent both with the interests of the holders and the
dignity of the empire. It is not an internal debt,
subject to compacts between a sovereign and his sub-
jects, but to an external and almost cosmopolitan
debt, negotiable in all the money markets of Europe,
and having its interest paid without deduction for
exchange, in any financial centre where the holder
may happen to reside. In fact, the coupons may
almost be considered as bills of exchange, so greatly
will they facilitate remittances between the Levant
and Europe.
This object effected, the next consideration was as
to the means of bringing within the radius of this
new debt such liabilities as already existed.
The External Debts could not be touched, as being
secured by special arrangements. The only bond-holders
to whom inducements could be held out were the holders
of Consolides, all of whom were practically in the position
of Turkish subjects, and whose income. when abroad was
diminished by the discount levied ontheir coupons, which
were only payable at Constantinople.
The annual interest on the Consolides, as has already
been mentioned, is six pounds Turkish on each 100 pounds
Turkish of stock—i. e., about £5 9s. ld. per annum. The
sinking fund was 2 per cent. by annual drawings.
It was considered by many that the advantages held out
by the new stock at 5 per cent., with 1 per cent. sinking
fund, would make it almost as valuable as the old internal
stock; the increased moral advantages being considered
an equivalent for the diminution of the payments. It was
decided, however, to give to the bondholders such great
advantages as would insure the conversion.*
For every 100 pounds Turkish, giving annually £5 9s.
Id., subject to discount when abroad, the Turkish Govern-
ment offer a bond of 110 Turkish pounds, equal to £lOO
sterling, and further a bond of 11 pounds Turkish, or £lO
sterling, thus adding 21 per cent. to capital, while giving
the same or a slightly additional income.
In exchange for the other advantages given to the bond-
holder,
the Government only takes the 1 per cent. saved
on the amortization:

Against this saving a now loan has been issued of
£4,000,000 Turkish nominal, which has been placed, and
is now quoted in all the great Exchanges of Europe. It
must here be remarked that this loan has been obtained by
the Turkish Government without any addition to its an-
nual burdens.

The reader may himself judge of the value of the advan-
tages held out to those bondholders who convert.
The conversion of the debt is a further proof of the good
faith for which Fund Pasha has been distinguished in all
his dealings with foreign or native capitalists, as well as
of his confidence in the resources of the Turkish empire
as he has thus voluntarily placed the debt on a footing
which requires as punctual and regular a payment of the
half yearly interest as in the case of the most civilised
European Governments.—l am, sir, your obedient servant,

CONSOLIDE.

* Mention is hero only made of the Consolides, the bulk,
of the Internal stock. There are one or two other descrip-
tions, small in amount, principally held in Turkey, with
which it is unnecessary to encumber the present statement.

Madlle. Adelina Patti is expected at Florence.
It is said that there will be Opera in English at
Her Majesty's Theatre during the winter.
POPULATION OF THE KINGDOM.—The population
of the United Kingdom is estimated at the General Register
Office at 29,772,294 hi the middle of the year 1865.
THE OLD WALL OF LONDON.—Those who take
any interest in Old London may like to know that a portion
of the old wall which once encircled the city is to be seen
in Jewin-street, Aldgate. Some old buildings have been
removed, and the ground is at present cleared.