The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1872-01-12

The neporved Loan OF Six Hundred Mil
lions and Mr.. BoutweIps Management Of
the. Debt. a.a- Fl. sa4
The proposal Of Jay Cooke & Co. to take
six hundred millions Of the new loan seems to
be large and bold financial movement. This
is stupendous sum, Few financial opera
tons in the history of nations-no, not even In
late times, when everything is on much
larger scale than formerly-can be compared
with that proposed by these bankers to our
government. The boldness of the proposition
is characteristic of American ambition and
enterprise and Of the greatness of the country.
But the question naturally arises, Can these
ambitious fnanciers carry such q weight?
Jay Cooke has made great deal of
money out of the government, and may be
called millionaire, but, unaided, he and
McCulloch and the rest of his American
associates, could Lift but very small portion
of this vast losn. But they say the great
house of Rothschllds, which is equal to almost
any financial Undertaking, will be party In
the transaction. We must admit this state
ment to be true, for we cannot suppose the
name Of the Rothschilds firm would be used
SO authorItatively and Enthusiastically unless
| some assurance Of that had been given. We
are not disposed to credit the rumor whispered
in Wall street that this grand talk about the
loan is merely to advertise the parties or to
produce an effect upon certain Pacific Rail-
road bonds or other speculations. Nor do we
think they would use the name Of the Roths-
childs for any such purpose.
Still, it would be reasonable to suppose that
the Rothschilds would deal directly with the
government in business of such magnitude
if they were going to be actual purchasers Of
the loan or any considerable amount of 1t.
With our present limited information about
the matter we are inclined to think the prop
osition is for an agency only in disposing Of
the six hundred millions, and that Jay Cooke,
McCulloch & Co. have had the adroitness to
get the consent of the Rotbschlds to be
party to 1t. OF course this would give char
acter to the enterprise, as well as strength and
reputation to these Americans, who have
started the project. the proposition be
simply for an agency, or-t0 use the more i'm
posing term-for q Syndicate, without an
actual purchase Of the loan, the character of
the proposed transaction is somewhat different
from what the public has been led to expect.
Still, the cooperation of the Rothschilds in
such an agency would be valuable. 1t would
be better if that famous house would take the
loan and pay for it without the cost and ma
nipulation of intermediate pa rites, but If the
terms be acceptable and good bargain can
be consummated, the government might not
hesitate to place the loan in competent hands.
The conditions for negotiating or placing
the loan in Europe are not known definitely
by the public It is said, however, that they
are to be like those for placing the hundred
and thirty millions of the five per cents which
remained out Of the two hundred millions not
taken by the national banks at home, and
which the Jay Cooke, McCulloch & Co. |
Syndicate placed abroad. These were
one-half of one per cent commission, less
the cost Of expenses in preparing the
bonds and three months interest on the hun
bred and thirty millions, amounting In all to
about two millions. This was an enormous
amount to pay for the agency In dlsposing Of
the new bonds and rich mine Of wealth to
the favored Syndicate. At this rate, If even
only three months interest is allowed, besides
the commission, the cost to the government
for negotiating the six hundred millions would
be near nine millions. But it is reported that
the new Syndicate, with which the name of the
Rothschilds is associated, require q year to
complete the bargain and the interest on the
bonds during that period. This would cost
the government over thirty millions. We do
not know II Mr.. Boutwell, entertains such an
extraordinary proposition, but, judging from
his previous lavish expenditures In placing the
hundred and thirty millions, and the whole
course of his funding policy, we should not
be surprised if he does.
The Secretary, In his report to Congress,
says that the commissions allowed to the agents
for negotiating the loan were inadequate, and
recommends more liberal allowance. This
shows that he is prepared to be more liberal.
He would, probably, grant all the exorbitant
demands, even to the amount Of thirty mil
lions, to the favored ring Of friends who are
intent on manipulating the debt He has but
one idea in funding the debt, and that is to
fund It at once, at any cost. so that he may
save his credit and get some renown for
accomplishing what he proposed to Congress.
Then, it Is fair to presume he desires to throw
into the hands of the Treasury Ring this mag
nifcent job, with all Its enormous profits. He
does not consider that the payment Of such q
vast sum to agents is equivalent to the differ
ence of interest on the debt for several
years and that the government would not save
| ANYTHING for some time to come. He does not