New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1877-06-19
THE F1NANCIAL OUyLOOK.


The Immediate future of the money market
the stock market, and the gen ral business of
the country depends more largely than many are
willing to acknowledge even to themselves upon
the course of the Administration in respect to
the four per cent loan. The Secretary of the
Treasury Will need all his sagacity and firm
ness When an eminent surgeon undertakes
an operation of some difficulty and danger, he
knows that an uslancs hesitation, timidity, or
trembling may cost lIs own reputation and
serious injury 10 patient The financial
operations which have now been commenced
involve grave possibilities. 1t is possible that
the price OF gold may advance sharply II the
Secretary permits the belief that he c0ntcm-
plates considerable boarding OF gold or #
his course is such rs to cause large exports of
spccic. Without doubt he wishes to avoid Il
result so Disappointing TO his plans, and yet
ne may invite it if he is persuaded TO indulge
sill greater apprehension Of the consequences
of withdrawal of legal tenders
The situation ought to be understood clearly.
not only by tie Secretary of the Treasury, but
by every business man. Large subscriptions
at PAR to the four PER cent bonds are expected
and are probable The Syndicate has deter
mined TO offer at par only the smaller forms
of coupon bonds therefore the great proper
ton Of the subscriptions will he from this
country. Let it be supposed that the subsoiip-
tons at par amount TO 800, 200, O00-a sum
considered by no means beyond the limit OF
probability by shrcwd observers. The Sccrc-
tary will then have only three possible modes
of dealing with the subscriptions which will be
al; az 4. Itlv 10, 4
receive the proceeds in gold and hoard the
coin; he may exchange the com for lc-
gal-tcndcr currency, and hoard that; or
he may call in SIX per cent bonds. IL
is generally presumed that he will call in
bonds TO correspond with about 50 per cent
of the amount subscribed aud apply the bal
ancc To resumption, in part by the boarding OF
LEGAL tenders and in part by the boarding OF
gold.
Evidently mere exchange of bonds for bonds
can produce no grave consequences, provided
bonds held abroad are received in exchange
for bonds to he taken abroad, or bonds held
here are received in exchange for bonds to be
taken here. Then the operation is a mere
washing Of one hand with the other In place
of 80 many millions IN bonds coming from
abroad, IA many millions go abroad. But it
happens that very large proportion of the
bonds which must be called under the Fund
ing act are held abroad. We do not state the
proportion exactly; the best authorities dis
putc about il. But of the consols of 1860,
which are now and for some months 10 come
must he the only bonds called. only about
$Gq. OOO. 900 are registered and mainly held here,
while about 1888, 100000 are coupon bonds,
and IT is presumed that about 800, coo, 900
are held abroad. Out of SSOO0O,O0 which it
is supposed may be called, at least $4,000, 900
will be received from abroad. No such amount
is expected TO be taken by foreign investors
during the period of subscription at par. The
difference, amounting TO 100000, more or
less, must be RENTED from this country to
Europe in gold, to pay for bonds surrendered
by foreign holders, but not balanced by bonds
taken by foreign investors.
The obvious effect, as to the premium on
gold, would be even greater than that of II
boarding of like amount i'll coin. But If, in
addition TO this drain to meet called bonds,
the Treasury also wihdraws from the market
large sums for boarding, it Is difficult to see
how a sharp disturbance OF the premium on
gold could be avoided.
The Secretary will be led TO this course, if
at all, by a fear of Withdrawing legal tenders
too rapidly. But he must see that, at a time
when banks and all other financial institu-
tons ought to be fortifying themselves with
coin.Ieseives, in preparation for resumption,