The Sun.
London, England, 1854-08-11 00:00:00

THE TURKISH LOAN.

The result of the new negotiations fora Turkish loan
will be' watched with interest. Former circumstantial'
have 'damaged its prospects, but more from the confused.
impreseione they.have.left than from any clear -ootieep.
tion of their precise nature. These, however, should
be understood. It was nearly three years back—vis.,
on the 31st of October, 1851, that Turkey first attempted
to become a borrower. . For some years the currency of
the country-had. experienced depreciation, and, to te•
store it, the Bank of Constantinople was anthorieed' by
the Ministry to contract a loan of 2,000,0001. The
terms arranged at London and Paris were for a Six per
Cent. Stock at par, guaranteed by the Government, And
to be reimbursed. in 23 years at 1201. Consols at that
time were at 100, and the reliance upon the honour of
Turkey was such that the scrip of the new bonds, in the
course of a few weeks, advanced to 11; premium, with
the
Prospect of a-further rise. Rumours, however, be-
came prevalent that the terms were considered too one-
TOUR at Constantinople, and that they would be dim-
vowed on the gronnd that the Turkish Plenipotentiary
at Paris had exceeded ids authority, and that the scrip
bad been issued without the final warrant of an Lupe-
tarhibaeeliyrfialurnmeoean,ne
y.buttFoi
tt:
the
wes
aOssmc
reei
vpmehnootinudtaehlr
els?
shweeti
tqt
iheu
de
as
bt
bonus
ontuhrueesm oaii
returnna e:do
about
3 per cent. After this, no further proposals were heard
of until December last, when Namik Pasha visited Paris
and Loudon, and arranged the details of a loan of
2,200,000/., one half of N both was to have been subscribed
by the Credit Mobilier, with the sanction of the French
Government, and the other half in London. To the as-
tonishment of every one, however, the proper firman ap-
peared again in this case to be wanting, and the nego-
tiations were broken off. Finally, on the 2gd of March
last, little more than four mouths ago, Messrs. Roth..
child announced the completion of terms comprising a
loan of 2,200,0001. in a Six per Cent. stock at 85, re-
deemable in 15years. Console at that time were at 891,
and on the following morning hasty quotations of the
scrip were made at 3 prem. It soon, however, declined
to 1 to 2 preen., and the declaration of war, which ap-
peared five days afterwards, having sent onsols in a
panic down to 85k, the public withdrew from euteserib.
ing, and the affair was nut carried further..
It is by the light of these circumstances
that the pro-
pose's now about to be put torth must be considered They
involve two points. First, the extent of discredit inflicted
by the disavowal of the original contract in 1851; and next
the present position of Turkey, as regards her ability to
fulfil any engagement she may contract, compared with
what it was at that period. In respect to the first loan,
there is no question as to the correctness of her asser-
tion that it was issued prematurely, so far as concerns
the absence of the firman which was necessary to its
ultimate validity: But the charge against her was
that, although the contractors might have been to
some extent wanting in 'vigilance, they committed
no error, except as they were misled by all the high
functionaries of the Sultan ; and, moreover, that no
notice was given to them of any irregularity until the
loan had been many weeks in the market at a large
premium, and part of the proceeds had absolutely been
received by the Turkish Government, and applied to the
exigencies of the State. The hour for cancelling the
bargain on any other terms than that of paying its full
value to the holders, namely, 11 per cent. premium, had
therefore passed, and it was contended by those who
most sincerely desired to see Turkey sustain at any cost
her traditional honour, that nothing short of this would
satisfy the requirements of the case. Instead of 11 per
cant. premium, however, she limited herself to the pay.
ment of 3 per cent., returning at the same time princi-
pal and interest in full. To the extent of that allowance
the English public were clear gainers by the transaction,
although individual holders who had purchased at the
highest quotation sustained severe loss. This, however,
is no justification, any more than if a man who had sold
Consols to an agent at 90 were to deny the power of that
agent, and to refuse to deliver them after they had for
some time risen to 94, offering one per cent, in settle-
ment of the speculation.
But it must be remembered that the charge, :even
under any aspect, is not that Turkey dishonoured any
direct and legal debt, but that she failed, at a moment
of great internal perplexity, to act up to the highest
construction of a novel and peculiar question of
financial equity. The disavowal of the loan is well
known to have been the work of the reactionary party
who soon afterwards came temporarily into office, and
who had evidently acted under the demoralising in-
fluences of Russian intrigue. It is also known that in
the absence of Lord Stratford the Porte received even

English advice to the effect that the step it proposed
was all that could be fairty required, while there were
pottiona of the press in this country who were likewise
disposed to consider that the Stock Exchange were
attempting an exaction. That those were the real
Erie ds of Turkey who pointed out the stern conditions
she owed has since been fully proved, the result of her
imperfect course, by which she saved a few thousand
pounds, having inflicted more damage on her _credit
than Russia has ever sustained from her daring confis-
c,ition of a large portion of the debt on her paper cur-
rency. It is one thong, however, to look at the question
in an abstract form, and another to test it b) -com-
parison. All that can be said of Turkey is, that in this
instance she was,untrue to her own reputation. Com-
pered with, ,whal tonight have been expected, under
cirountbtanc,esf from most foreign countries, the
transaction is one:thittj,kill stand high. Mississippi,
Michigan, Florid,i, and
„Arkansas, four of the most
thriving States Of: the American Union, dispute the
technical form in which their, loans Pere contracted,
and, instead of discussing nice pennts as to the terms on
which they may cancel their bargains;, retain both prin.
cipal and interest.
With this glance at the moral points of her case, it
only reinains to consider the change in the political pro-
spects of Turkey, since the date woeu her securities were
:o ,ked upon as worth a premium of 11 per cent. At
that moment the Emperor of Russia was not alone in
regarding her as a dying patient. She is now victoriots
in the field, arid, at the same time, has introduced those
changes in her institutions upon which alone her rege-
neration was considered to depend. It has been shown
also that whatever eusvillsions may take place in Europe,
the one point on which all the Powers are united is that
Turkey shall not become the prey of any one of them,
and that thus, as far as external forces can operate, her
independence is more secure than that of any other
country. Filially, there is the fact, that she is almost
alone in the advantage of being without a public debt.
Doubtless there is enough in the heterogeneous elements
of her population and' other circumstances to inspire,
even when the whole of these things are estimated, a
lull amount of that caution with which all foreign bor-
rowers, especially at this moment, should be regarded ;
but it is, nevertheless, desirable in every sense that she
should not, in her financial operations, have to contend,
among other difficulties, with the consequences of pre-
, judice or misrepresentation.--Times City Article.