The Democratic advocate. [volume] (Westminster, Md.) 1865-1972, 1877-06-23
The New Fonr Per Cont. Loan.

The importance of the negotiation just er
iecled with the new syndicate for the four per
cent. thirty years loan Of tho United States
can hardly be overestmated, H. will attract
attention throughout the financial world, de.
monstrating as il does the high point to which
our government credit has attained, in effect
ing n saving Of one third in THE interest on
/ its loans, as compared with six per cent Mt
| which SO many hundred millions had been
| previously negotiated. This loan is taken
now absolutely to the extent of 5000, 900
at par in coin by the syndicate, in addition
to which they have contract running for six
months with the Secretary Of tine Trnasury
for any additional amount of the loan upon
the same tcrms-that is, they will take fur
/ Their amounts rs they find they can place
/ them. Meantime, however, the public will
| be free to subscribe direct to this loan, the
aggregate Of which is S700,0 600, within
! thirty days after notice shall have been given
at any time by the government Of its readi
ness to receive subscriptions. This is a
tenture not in connection with any of the
| other late negotiations, and is calculated to
so popularize the loan as TO bring the money
of small investors into it. The six months
privilege for the whole loan enjoyed by the
syndicate may or may not be awaited of.
The Philadelphia Ledger, in IN interesting
article on the subject, says:
THE new contract appears to leave to the
syndicate the control Of the whole 700 million
of four per cents. The q per cents nre now
securities of the past, and command hand.
some premium. The per cents now come
TO the front and offer themselves to investors
as the final bond of the United States. They
have thirty years to run before the treasury
can exercise the RICH: of calling them in at
par, and this fact, with their present nnthor,
lzed amount of 500, 100000, which is likely
to be increased to the full amount of all out
standing at higher rates Of interest, makes
them the most desirable Of investments for
all who wish long dates the best security and
freedom from taxation. The national baks
alone hold not much less than 500, OO0, 900
of the United States bonds at this date, in.
GLIDING temporary Investments and the S35s..
10000 which they had on Saturday on
deposit with the treasury. 1t is the interest
OF the banks to make considerable exchanges
OF their present holding for the 4 per cent.
loan, and thus get their bonded investment
into shape that shall be free from disturb.
ance. The saving banks throughout the
country hold largely Of United States bonds,
and for the most part count them in their
assets at market value; they have, therefore,
a lively interest in buying the 4 per cents,
because they will thus get the maximum of
principal aud the minimum Of premium, an
important consideration in view of the ine,i
table advance Of their currency deposits to
par in gold. The new loan, administered in
the spirit in which it is opened, leads the
way to the resumption of specie payments
aud to the uniiication of the public debt
The law contemblates the permanent use rs
currency Of $500, 100000 of legal tender
notes, while the national banks are left free,
as they have been for three years, to expand
or to contract their circulation as the wants
OF their business may suggest. The sale of
the new loan will bring upon the market large
amounts oil the older issues, discarded by in
stltutlons that held them on currency basis.
In the meantime the withdrawal Of $, 900,
600 monthly IN gold and legal.tenders win
gradually cause enough of vacuum in the
market to insure the retention in this country
of our own product Of gold, if not TO bring a
certain amount of gold from abroad The
advantages of the loan are manifest, the rate
OF interest being saving of one-third on the
O per cent bonds, which will be retired, and
the bonds running for long term An i'm.
portant matter in connection with this new
arrangement-it gives; as is believed, d quie-
tus to the mischieyOus aspect of the silver
question. demonstrates that whatever may
be done by Congress toward the reconciliation
Of silver will not extend so far as to make
that metal medium for paying our national
bonds. The syndicate would not have con.
tracted to take the = per cent. bonds without
n satisfactory guarantee that they will not be
paid in silver coin OF the present standard.
A contract to pay several hundred millions
in coin at a time when no coin but gold is a
legal tender for sums greater than five dollars
is unquestionably contract To pay gold.
Upon all grounds, therefore, the best results
may be hoped for the credit aud business OF
the people Of the United States from the
successful beginning Of the sale Of the four
per cent, loan.
1t will be recolccted that the syndicate
have, in accordance with the request Of the
Secretary OF the Treasury, given up tho right
to call for the last Sl0O,O1O,OlO OF the $780,
100000 Of a. per cents covered by their op-
ton expiring on the Both instant It is sup.
posed that the secretary will sell for gold
outright, from time TO time, of the one hun
bred millions of q per cents withdrawn from
the old syndicate, convert the coin into legal
tenders and make such disposition of the
latter as his Interpretation OF the resumption
act of 1879 permits.