The Iola register. [volume] (Iola, Allen County, Kansas) 1875-1902, 1895-03-01
Faulty ErNANclERINa.
Degradation of the Governments Credit by
Il


Democrats.
The folly of the new bond contract,
now that its terms are published, is
almost incredible.
The resources of our country are i'm
measurably greater than those of
France or England. Yet the admins
tratipn has based its bargain with the
bankers upon the assumption that $50
per cent. is the lowest interest rate at
which we can expect to borrow money,
when French rentes and British con-
soils are everywhere deemed desirable
Investments at pa per cent.
Our own per cents. with twelve
years TO run are eagerly sought for in
vestment at 10 and above, which would
make these new bonds worth about
11o. Yet the treasury has agreed to
sell sixty odd millions of them at
about 1Oi.
The treasury thus consents to a bar
gain which puts us as nation upon a
credit basis scarcely better than that
of a South American republic. 1t con-
sents to pay a rate of interest, which,
if 1t were applied to British or French
securities, would breed instant panic.
In addition to this the government
has placed itself helplessly in the hands
of this grinding syndicate for eight
months to come. II has agreed that it
will sell no bonds to anybody between
now and next October without giving
the syndicate the option of taking them
II is a bad bargain, and q foolish one,
from beginning TO end. 1t throws
away Sl6.OO0,OO0 or more at the outset.
1t permanently impairs the national
credit. II threatens to make further
borrowing TO meet emergencies impos-
sible upon any reasonable terms.
It is no wonder that when such
bargain was to be made the negOtia
ton was conducted behind closed
doors, and that an effort was made,
even after the contract was concluded,
and despite the foolish denial of Secre
tary Carlisle, to keep its terms secret
an effort that was abandoned only
after the worlds call to Turn on the
Light"
Until the government dickered in
the dark with syndicate Of bankers
for this last loan its credit was very
high. Its per cents. with only twelve
years to run were worth 40 or more in
the. market, its per cents. with thirty
years to run were therefore worth
about 10.
But in this dicker the government
diScredited itself in a most extraordi-
nary way. 1t sold thirty-year per
World showed recently. it assented to
the theory of the banks that our ma
tiOnal credit is smaller than that Of
the negro colony of Jamaica, whose 4
per cents. are worth III, smaller than
that of British Guiana, whose As are
worth lO7, and not much better than
that of the Fiji islands, whose AIS are
worth 102.
Now, let US make some comparisons
nearer home. At a time when the
treasury itself fixes upon 1O4 or 1O44
as the proper price of government As
and sells them at that rate the As of
Athol, Mass. did you ever hear of
Athol?,, are selling in the market at
1O71+; Boston Water As at Ill to rs,
according to term; the As of Brockton,
Mass, at los: those of Cambridge,
Mass, ut los and 100; those of Detroit
at IO7. those of Haverhill at 1OS and
1881, those of Hudson county, New
Jersey, at 1OS4, those of Lawrence,
Mass, at 100, and so on through list
that might be extended to great
length.
OF course the credit of the govern
ment is not by any means so bad as
this extraordinary treasury operation
would suggest. 1t is SO good indeed
that even such a blow has not been
able to depress the price ul0) of the
old As, and the new bonds presently to
be issued to the syndicate at 1O4 are al
ready eagerly bid for at Ill and above.
No explanation or defense that has
been offered excuses this wanton deg
radiation of the credit of the United
States. The refusal of congress to
authorize a popular loan did not war
rant a secret sale of bonds by the presi-
dent to foreign bankers on their own
terms-and such terms! The bottom
of this scandal has not yet been reached.
N Y Void DEM