, 1877-08-11
The Four Per Cent. Bonds.

4 lively discussion has sprung up as tC
the significance Of the fact that so, COZ OCT
were subscribed for the $40, 600, ,0J0 issue Ot
four per cent. bonds. The common view oi
the case is that so large a subscription indi
Gates a hourishing condition Of things; that
money is plenty, aHd that confidence in gov
ernment securities IS good Reelection, now
ever, Will, We think, convince those vi
take the trouble to think, that tins prompt
and heavy subscription may, and probably
does. Indicate Z much less Satisfactory s-.l t
Of things. If we wish to know precisely
what Il means we mus look abroad, and as
certain the actual condition OF trade and
manufacture We then preceIve that ther
Is a general stagnaiionIn II business; that man,
ufacCure langmshes; the capital Is withat Id
from important enterprises that real estate
Is Of slow sale that there IS eVerywnere IN
evidence of tnaidi,y and hesitation; and
that in short the characteristic OF the situa-
ton IS prevailing apprehension AID mcer'
taiHty.
We now turn round and Otserye the lac;
that the four per cent. Loan is taken with un'
examplcd eagerness and avidIty, and we ask
ourselves: Is il possible that TINS IS proof
of prosperity and confidence IN the future
The answer must be that it is not possible.
The truth We believe to be that the eaSefheSS I:
with which the loan has been taken is dls-
couraging, and not an encouraging, Iagt'
The money so invested is capital which, un-
der a better state of general commerce,
would have been invested III manufactures,
or trade. or real estate, or building; and 1t
is put into these bonds because It's owners
have not confidence enough in the future tt
trust their money III any VI these enterprises
Since 1873 the country has been struggling
against the disasterous consequences OF the
panic. The organized raids winch have been
made uponthe various forms of capital mean
time have certainly not tended 20 revive con-
tidence, while the unsettled state OF national
politics until few months ago, and the dis
turbed condition of Europe, have contributed
still further to the prevailing doubt and ap-
prehensi0n. 1t was thought that the Euro
pean war would stimulate manufactures IN
this country, but it turns out that European
trade was as depressed as our own, and con-
sequently that the enhanced demand Tor pro
duetion has thus far only sufiiced to give EN-
ployment to the idle mills and ioundrleS Of
England and the Continent.
The spread Of socialism in the United
States the equally alarming spread OF re-
pudiation and finally the erownlng calaml-
ty of these railroad strikes, all increase and
intensity the feeling We have described, and
still further paralyze capital and industry.
Under all the circumstances 1t may be said
that the exhibit Is not favorable TO the view
taken by the optimiSts. In fact it appears
to Justify the citation OF John Stuart Mill :
observation upon public loans, that III the
capital taken IN loans Is distracted from
funds engaged in production, or destined 10
be employed IN 1t, their diversion from that
purpose Is equivalent to taking the amount
from the wages OF the labOring classes" And
Mill adds that the 1.-THE system of public
loans. IN such circumstances, may be pro-
nounced the very worst which, In The present
state Of civilization. is still included IN the
catalogue of financial expedients =
1t may be urged that II these seventy mill
ions had not been invested In the four per
cent. bonds they would not have been IN
vested at all, and therefore that they cannot
be said to have been taken from any other
form OF investment. To a certain extent this
is true. bat 1t does not affect the considera-
ton that the dismchnation TO invest in pro-
ductive enterprise Is itself a bad SYMPTOM,
and indicative OF anything but general pros
perity. On full examination of the sub
leet we think 1t demonstrable that the eager
ness with which the issue has been taken is
anything but reassuring, and that if 1t indi-
Gates the existence OF much idle capital In
the country, II also when viewed in connec-
ton with the depressed condition OF cum-
meree and manufactures. signifies startling
want of confidence in the future.