, 1872-12-26
PUBLIC LOANS AND sYND1CATEs,

The Treasury Of France has q way Of DOING
business that might safely be adopted in this
country. The New York Ereni,.g Post COM
mends it, and we think it Is entitled to serioua
Consideration. The French plan may be best
understood by first examining our own. Mr..
Boutwell, has had authority for two years past to
borrow money upon bonds bearing interest re-
spectiyely at S, ~, and per cent, and to apply
the proceeds to the e1tinguishm Mt Of an equal
amount Of the debt bearing per cent interest.
He has authority at any time to give notice that
after certain day interest will cease on such
bonds as he may describe by date, amount, aud
number, and these bonds thus specified may be-
redeemed on demand. He is, however, prohib-
tied from increasing the public debt. In 1871,
the Secretary insisted upon exchanging por-
tion of his new 5 per cents for outstanding 6
per cents,2 and forthwith proceeded to do so
through the agency Of the Syndicate. This Syn
dicate received the $ per cent bonds, upon depos-
iting thoir own checks upon themselves for the
amount, and three months later they delivered
to the Secretary the per cent bonds to an
amount equal to the sum of the per cents sub
scribed for by them. During this three months
they received interest at the rate Of per cent
on 9130,000 900, new bonds, and also received
interest at per cent on $4,000, 900 Of old
bonds for the same period. This VAS either an
allowance Of interest for three months at IL per
cent, or was an increase Of the public debt, and
without any consideration for the same time. a
Committee ofCongreBs appointed to investigate
the proceedings, reported that there WAS no
other way to make-the exchange, and, therefore,
that the Secretary was right in doing SO.
The plan followed in France is not to offer a
bond bearing any specified rate Of interest, but
to announce that the Government will receive q
given sum. say $500 000 900, upon the best terms
that may be offered. Any person, therefore,
may offer the Government any amount, great or
small, himself fixing the rate of interest and the
time Of the bond. These offers the Government
is at liberty to accept decline, or it may accept
30 much Of the money offered as it may consider
advisable. This places the loan before the
whole country. ANY man may offer his $50, or
800, or any other sum, and state the rate Of in
terest ta 1s willing to take, and the duration OF
the bnud he desires. This offer for proposals
may be kept open al the time, with monthly
awards. The Government is not under the ne-
cessity Of paying S per cent interest 60
long as there are people willing
to lend money at less rate. It involves
no expense for agents or syndicates; when an
offer is accepted, the money is deposited and the
bond issued; there is no doubling Of the debt
for q certain period Of time, no confusion, no
deception. This process ia, Of course, objected
to by the brokers who make money by acting as
Intermediates between the Government and
those whose money they lend. It is very sim
pie proceeding, easily understood, and ino1pen-
sire. An examination Of the current prices Of
United States securities, and the prices Of gold,
will chow that the Government per cents, dur
ing the last two OF more years, have not yielded
more than 81 per cent interest on the invest
ment, and, at times, the yield has been less. To
take new bond at par, bearing per cent inter
est, and having thirty years to run, is therefore,
q better investment than to buy 6 per cent
hppd Rt Z premium, and liable to be called