New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1879-04-18
4 BRILLIANT FUNDING OPERAT1ON.


Beck.
4 BRILLIANT FUNDING OPER1TON.
Secretary Sherman's confidence i'll the popu-
laIity Of the four per cent loan has been JuStl-
fed in the most remarkable manner The
circular issued on Wednesday, which offered for
sale $3.50, 600 600 of four per cent bonds for
the redemption Of tcn-forties, proposed terms
which would have been thought impracticabe
month ago That they were not too high was
shown by the astonishing subscription made
within twenty-four hours after, the entire loan
being taken by n syndicate OF bankers ana
banking institutions, which at the same time
called for $40, 100000 of the funding certifi-
Gates. making the total subscription $780,
100000. There have been many notable
subscriptions to Government loans In this
country and in Europe, usually under the stress
Of popular excitement in time of war; but this
loan made III time of peace IS certainly
one of the largest, if not the very largest,
ever taken in a single day. Secretary Sher-
man must be congratulated upon q great
financial success, which is largely due to his
sagacious management and his careful watch
upon the condition of public sentiment. The
record of his administration, bright as it Is,
has no more brilliant page than this.
The obvious cause of this remarkable sub
scripdon is that, now that the amount Of
tered has been subscribed there will re-
main no other United States bonds to be
funded until after December 81, 1880, and less
than twenty millions of six per cents before
June 80, 1881. Excepting for resumption pur-
noses. which are not at all likely to require any
addition to the bonded debt, the Treasury has
no authority to sell four per cents in excess
of the amount required for refundlng. Con-
seouently, besides the bonds now taken. no
others will be placed on the market for about
twenty months, and only twenty millions more
within twenty-six months. 1t Is certain that
the demand for that class of investments which
necessarily seeks Government bonds Will be-
come very large during that PERIOD and the
shIewd operators who compose this Syndicate
have evidently been considering what price
Government four per cents may probably COM
mand during this long interval. With the
money market in its present condition 1t is
evident that such bonds must in time command
a considerable premium.
1t has been repeatedly suggested that sales
of four per cent bonds at any price above
par would be difficult so long as the ten
dollar certificates are offered for sale at par
with the privilege Of exchange for four per
cent bonds at par. For the purpose OF pre-
venting this evasion of the terms just ac-
cepted, the circular of the Treasury provided
that premium of One-half of one per cent
yyonld be exacted from National Bank depOsito-
ries ON all purchases of ten dollar certificates
also. Excepting so far as purchases may de-
pend upon the interest Obtainable for the use
of money during ninety days, this provision,
of course, will have little effect to check pur-
chases. The Treasury retained $44, 5G6,OOO
of the four per cent bonds, to be applied III
conversion for such certificates as might be sold,
and the Syndicate has virtually covered this
amount with an order for $4O,OO0,OOO
in certificates. So now that the $780,
100000 directly offered has been so
speedily taken, it is probable that the certifi-
Gates will have to be withdrawn from the
market at an early date, or their sale Will
operate as virtual retirement OF legal
tenders. and to an amount much larger per-
hans than the Treasury may deem e1Dedient.
At the same time that we recognize Sccre-
tary Sherman's great personal services, 1t must
be remembered that the brilliant success
which has thus far attended all his plans, both
with regard to resumption and as to the re-
funding of the debt, has not been due entirely
TO the mvariable sagacity and tact shown by him.
The circumstances have been peculiarly ia
yorable. The condition of the money market
both iii this country and abroad has been
altogether unusual, and the Secretary Is prob
ably wise In securing the retirement Of the
ten-fortieS mt once lest this condition should
presently be changed. There Is, however, no
immediate prospect of any such change Ill the
rate of interest current abroad OF here. as to
check investments in Government securities.
Moreover i'll the operation OF refunding every
new offer to sell creates a demand, because 1t
threatens to displace existing investments to
an equal amount. A very large proportion
.of the ten-fOrty bonds are held by institu-
tions. trustees and other persons under such
circumstances that Government bonds of some
class would naturally be secured i'll their
stead. The certainty that demand of this
kind would nearly if not quite suffice to secure
the sale of four per cents to the desired
amount furnished the substantial basis on
which the Secretary has judiciously acted
with instantaneous success.
"WHICH WAS RIGHTT