The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1871-08-21
| The Loan sf che Usised ssatcs and Opera
lions Of Socr etary Boutwell,.

i ~~~ 49, "a s~SS Sefp0SS~ wv -~>''~~~- -
parture of the Secretary of the Treasury with
regard TO the so-called new loan Of the gov
eminent. Upon the superficial reader the I'm
preston is made that some extraordinary finan-
cial ability has been displayed and some sur
prisng results have been attained. 1.-The
loM a success !" ''Heavy subscriptions to
the loan; ''The loan placed in Europe
and other like headings have been placed
to reports from Washington and the COM
ments of the press. Then We have heard
great deal of the Syndicate the ''Syndi-
cate of European aud American bankers
abroad, and of another sort of Syndicate" OF
bankers at home, which have taken the loan,
or promise to take it. Now, to the American
reader this sounds grandly. Without knowing
the facts or reasoning npon these spread-eagle
sort of statements he INDUCES the idea that
something great has been accomplished. Par
tisan politicians and newspapers ring the
| changes on these reports issued from Washing
| ton or manufactured by those government
agents calling themselves the Syndicate,
and make great flourish over the success
full financial policy of the administration" and
the surprising ability of Mr.. Boutwell,.
Now, while we would be first to encourage
the Secretary OF the Treasury in any effort to
fund the debt at a lower rate Of interest and to
give him credit for what he does to that end,
we must denounce anything that savors of
claptrap, jobbery or pretence. Indeed, we
would rather overlook any little weakness or
questionable advertising lodges for the sake
| of the public credit-vwould rather help the
Treasury Department to place the new debt
| than be over-critcal but we cannot counte-
nance shams. In the end the public credit
will not suffer by the statement Of facts though
| spectators may, and though the grand
Aourishes made for political effect may be
Invested of their gilded coating
What, then, are the facts with regard to Mr..
Boutwels reported financial success in nego-
tiating the new loan? By the acts of Congress
of July, 1870, and of January, 1871, to arrtho-
rize the refunding of the national debt, fifteen
hundred millions of the six per cent bonds
were to be converted, at par, into fivf four
and-a-half and four per cents. OF the first
class the amount was fixed at FIVE hundred
Millions the second at three hundred millions
and the third at seven hundred millions. Mr..
boutwell, urged with all his power the passage
of these acts Of Congress, and expressed the
greatest confidence in his ability to refund the
whole debt thus provided for. He argued that
the long time the new bonds would have to
run before redemption, together with the
exemption of them and the interest on them
from all taxation. federal and local,
would be equivalent to the difference of
interest and render the scheme successful.
The Secretary supposed the national banks,
which derive so much profit from the bounty
of the government, would at the start subscribe
largely for the new bonds and thus show their
gratitude for the advantages given to them.
What has been the result? After thirteen
months since the refundng act was passed,
after seven months since the act in amendment
was passed and after nearly five months since
books were opened, both here and in Europe,
for subscriptions to these new bonds, what has
been accomplished?
Ont Of the fifteen hundred millions but
seventy millions OF one class, the five per
cents, had been subscribed for up to the new
financial departure of the Treasury Depart
ment, with its syndicate, a few days ago.
1t is said the seventy millions had been sub
scribed for principally by the national banks.
The private subscriptions, therefore, must
have been very small. The national banks,
having near four hundred millions of bonds,
which are held by the government as security
for their circulation, did not show any eager
ness to take the new bonds or to aid the gov
eminent in refunding the debt. They have
not taken more or little more than fifty millions
of the five per cents. Under this unfavorable
state of things, after trying SO long to nego-
! tate the new loan, the Secretary of the
Treasury changes, apparently, his plan
| of operations. On the I4th OF this
month he issued a circular to the
agents previously designated by him to
negotiate the new loan. informing them that be
withdraws the loan from the market, with the
exception of the five per cent bonds as offered
10 the national banks on the 10th instant. The
bonds thus excepted and that still remain in
the market are two hundred millions out of
the five hundred millions of five per cents. All
the four and half and four per cents and
three hundred millions of the five per cents,
making thirteen hundred millions out of the
fifteen hundred millions that were to be re-
funded are withdrawn. There is certainly
nothing to boast of in this, either as to the
sagacity of Mr.. Boutwell, in originating the re-
funding scheme or in his management since.
How, then. as to the two hundred millions.
or the balance over the seventy millions al
ready taken, that is still on the market? There
has been, as we remarked before, great
| flourish Of trumpets over the reported, or
rather the expected, disposition of this bal
ance Of hundred and thirty millions The
so-called syndicate Of bankers organized for
| nlacing this balance is neither more nor less