The Sun.
London, England, 1870-01-13 00:00:00

SMYRNA AND CASSALA.

The total traffic receipts on this company's line,
61 miles in length, for the 26 weeks ending the
26th of December last, amounted to £33,985, and
for the corresponding period in 1868 to £39,798,
showing a decrease of £Bl3.

Tll3 U. S. FUNDING HILL.

(From the Anglo-American Times.)

Secretary Boutwell's Funding Bill is now ready for
Congress. It provides for a loan of $1,200,000,000
in bonds of three classes, of $400,000,000 each ; the
first running fifteen years, when the Government
acquires the option of repayment up to twenty
years, when the bonds become payable ; the second
running for twenty years, payable in twenty-five;
the third running twenty-five years, payable in
thirty ; principal and interest in coin. Five-
Twenties are to be received in exchange for the new
bonds which are to be offered in Europe, purchasers
to have the option of receiving interest in the United
States or in Loudon, Paris, Berlin, or Frankfort as
they may elect ; but the principal will be payable
in America. The rate of interest is not to exceed
41 per cent. per annum, free from all taxes, deduc
tions, or abatements whatever, except as regards
residents in the United States, who are liable to
the same tax upon the income derived from these
bonds as the law may impose on that derived from
other investments. The Secretary carried his bill
to the Chamber for submission to the Finance Com-
mittee, but the Senate was iu one of its stormy exe-
cutive sessions, and Mr. Boutwell could not obtain
a hearing. It is of interest even to speculate on the
fate of this attempt to reduce the interest on half
the U.S. Debt. We may take it for granted that
Americans as a rule will not subscribe, for the
simple reason that although they regard the secu-
rity as about the best in the world, twice that in-
terest can be got from a mortgage on real estate
perhaps as secure. As it is, all te Bonds of the
U.S. Debt are being rapidly absorbed by Europeans,
and a financial journal, considered a good authority,
says that the whole volume will soon have crossed
the Atlantic. In Frankfort, a market relied on by
Mr. Boutwell, our correspondent asserts, as does the
correspondent of the '1 imes, that Germans will not
invest at par in U.S. or any other 41 per Cent.
Bonds, while good home securities yielding 5 per
cent. are below par. It, however, appears to have
escaped the correspondents that the absorption of a
vast sum in those Bonds has itself tended to enhance
the value of other German securities. Suppose
the English converted their 5-20's into Bonds yield-
ing per cent., and then purchased much of the
balance, the money thrown on the Frankfort market
for investment, if the German holders of the 5-20's
cleared out, would rapidly raise German securities.
Our belief is that the success of Mr. Boutwell's
financial operation will much depend on the tone of
the English market, and that is mainly influenced by
the view expressed in the limes, which has already
severely injured English investors by its remarks
on American credit. However ridiculously wrong
in all its prognostications, it still appears as im-
possible to shake the faith of John Bull in his prophet
asthat of an Indian tribe in its soothsayer or medicine
man. Had English investors reasoned the matter out
for themselves the common sense of tnost,with a little
knowledge of North America, would have guided
them aright. But they will not take the trouble,
and they are turned about like a flock of sheep by
the shepherd's dog. It is a fact that the Bonds
Mr. Boutwell will offer are a better security than
British Consols; for England might be sorely
smitten, but the Republic cannot be ; for England
is weighted with all she can carry, but the United
States is not thus burdened; for England may be de-
creasing in wealth and power, but, even if increas-
ing, still in a degree not to be compared with the
progress of the United States. The mild form repudia-
tion took in America of repaying the Bonds in
the very money the Government got for them,
which is there as legal as are Bank of England
notes in England, has been scouted and denounced
by the nation with au unanimity seldom seen on
any public question, and after a full discussion
had brought out all that could be said on the sub-
ject. There is as little chance of Americans as of the
English repudiating, or in any form mulcting their
creditors, which means that there is now no chance
whatever. England would only do so if compelled
by inability, a contingency barely possible, but
with the United States wholly impossible. Years
ago we asserted our belief in the superior security
of U. S. Bonds to that of any other National Debt,
and we think that many of our readers who then
regarded what we said as a mere figure of sl.cech,
intended to cry up the credit of the Union, regret
that they did not receive it in the plain, 11.,nest
sense meant. In the rise of some 14 per cent.
within a year, and upwards of 20 since we thus
wrote, the investor in 5.20's would have found
something more substanti .1 than in merely congra-
tulating himself sn being ahead of his neighbour
in correct information. When the elections were
progressing in the winter of last year numbers of
English holders were frightened out of their stock
by the Times and its Philadelphian correspondent.
If we estimated that the latter caused a loss of at least
half a mil:ion sterling to certain English holders,
would assess the amount at a low rate His object
then was, to forward the interest of the Dent crate
party, who desired to lower the credit of the country
to bring the rule of the hitherto dqain 144 Itepub-
.