The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1876-08-23
The Four and . Half Per Cont Loan.


The vigorous promptitude with which Mr.
Morrill,, the new Secretary of the Treasury,
has taken in hand the important task OF re-
funding the public debt reflects credit on
his energy and sagacity, and is in favorable
contrast to the dilatory, do-nothing policy
of his predecessor, Secretary Bristow. Mr..
Morrill, has decided to sell the authorized
three hundred millions OF four and half
per cent bonds, and nothing remains but
or him to decide between eager sets of bid
ders. 1t would be idle to inquire at this
stage of the business whether bonds might
not be sold bearing lower rate Of interest.
There is good reason to think that they
might, and that four per cent bonds would
be taken If they were to run for long
period. The four and half per cent bonds
are redeemable at the pleasure of the govern
ment at the expiration of fifteen years, and
if the credit of the government should then
be such that three and a half per cent bonds
could be sold at par the government would be
about as well off as by the present sale Of
thirty year four per cents, the one-half per
cent excess paid for the first fifteen years
being balanced by the one-half per cent less
for the other fifteen. The purchasing Syndi-
cate will no doubt find the transaction profit
able, otherwise Secretary Morrill, would not
be embarrassed by the bids Of com petitors.
The annual saving to the government by
the conversion OF three hundred millions of
six per cent bonds into four and q half per
cents will be four and d half million dollars,
and we are too glad to see this step taken to
cavil on minor points. The assured and inn
mediate success of this loan as soon as it is
offered justifes the severity of our comments
last winter on the imbecile neglect of Sec
rotary Bristow. There has been no material
change either in the credit of the govern
ment or the state of the money market since
the new five per cent loan was closed out ten
months ago. There was no good reason why
Secretary Bristow could not have disposed
of the four and half per cent loan
then as easily rs Secretary Morrill, dis
poses of it now. His financial pusillanim-
ity has cost the country three and half
millions of dollars by the ten months de-
lay. He asked Congress, in his report at the
OpeAluS VI Vic ocSSioli, " CAtc1lu VIC tiiAc
of the four and half per cent bonds from
fifteen years to thirty years, to enable him
to sell them. Congress wisely forebore to
make the change, and the immediate success
of Secretary Morrill,, without any alteration
in the law, demonstrates the folly of that
recommendation.
1t does not yet appear whether the whole
loan will be awarded to the European Syndi-
cate, but the great house of Rothschilds are
understood to make this a condition of their
taking any part in the transaction, and with
out their aid it is doubtful if the loan could
be promptly and securely placed A former
attempt to favor American bankers in the
financial transactions OF the government had
such disastrous consequences, in the mem
orable instance when the old and solid house
ofBarings was supplanted by Jay Cooke & Co.
and Clews & Co., that the government will
naturally be cautious in trying similar ex-
pertinent second time. We shall probably
know in the course of the day whether the
whole loan is taken by the Syndicate and on
what terms il is disposed Of.