New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1874-06-04
MR. RBJSTOWS OPPORTUNITY

With five per cent bonds of the Funded
loan selling at nearly three per cent above
par in gold, after deducting one months ac-
crued interest, the new Secretary OF the
Treasury issues his call FOR J6pe millions of
six per cent bonds of the loan Of 1862, to be
paid off, or converted into five per cents, in
September. This looks like five dollar bust
ness, but we are not going to "pitch in"
to the Secretary. He has done well
to commence, though in small
way. the reduction of interest on the
$3.50, 100000 of six per cent bonds which the
Government now has the privilege OF calling
in and paying off at three months notice.
But he ought not to suffer Congress to ad-
journ without getting from it some legislation
to expedite the conversion of six per cent
bonds into fves. The present law Is incura
bly, defective, as Messrs. Boutwell, and Rich
ardson have interpreted it. Let the United
States announce loan of nine hundred mil
hons of dollars on terms of payment cover
ing period of year or more, and similar
to those stipulated for by the French Govern
ment for its last great loan, with the further
option of exchanging six per cent bonds for
fives, bond for bond, and there is no doubt
that the conversion could be made an imme-
date success. Had this been done three years
ago, and the fives been sold then on no bet
ter terms than the equivalent of five
per cent discount, we should have been
better off than we are now. Funding
nearly a thousand millions of debt
at the rate of FIVE million dollars in three
months is slow business. 1t will take just
forty-fve years and six months to fund the
$3.50, O0OO 900 of fve-twenties now outstanding.
Five millions of FIVE per cents in three months,
with the market price at nearly three per cent
above par Why, the Treasury could give
forty-eight hours notice and sell that amount
in Wall Street at par any day in the week in
the present condition of the money market
Yesterdays call sayors Of five dollar resump-
ton.
We see that some over-cautlous individuals
are telling the Government to wait few
years, until it can sell four per cent bonds at
par, before doing anything further in the way
of reducing the interest on the debt. We
think five per cent is about as we'll as the
Government will be able to do for some years
to come. French credit is good, but French
fives are not yet at par, and the floating sup
ply Of them is not small. But grant that
will bring par. There will be no lack of
material for carrying on the process of fund
ing at that rate. There are $1945O0,0OO, con-
stituting the ten-forty five per cent loan,
which may already be paid off by the Govern
ment whenever it suits its convenience to call
them in. The very fves of the new loan,
which we wish to see substituted for the FIVE
| twenties as soon as possible, may be paid off
at any time after May /. 1881. The entire
Public Debt, Of every sort and description,
the Pacific Railroad bonds only excepted, may
be paid off at the pleasure of the Govern
ment at any time after the 3Oth of June, 1881
1t may suit the ideas of Western
Congressman to talk of United States bonds
bearing only four per cent interest selling for
par In gold within three or four years, but to
practical fnanciers who have made the sub
ject study the notion is absurd. The bonds
of nations in frst-class credit. among which
we count both France and the United States.
are not likely to 90 much higher than they
arc now, French stocks, which are below ours