The diamond drill., 1895-03-02

Degradation of tho Government Credit by
Democrats.

The folly of the new bond contract.
now that its terms are published, Is
almost incredible.
The resources of our country are inn
measurably greater than those OF
France or England. Yet the admins
tration has based its bargain with the
bankers upon the assumption that 39l
per cent. is the lowest interest rate at
which we can expect 20 borrow money,
when French rentes and British con-
soils are everywhere deemed desirable
investments at 2l6 per cent.
Our own 4 per cents. with twelve
years 20 run are eagerly sought for in
vestment at 40 and above, which would
make these new bonds worth about
ll0. Yet the treasury has agreed 10
sell sixty odd millions OF them at
about lOI.
The treasury thus consents To n bar
gain which puts us as nation upon a
credit basis scarcely better than that
OF South American republic. 1t con-
sents 10 pay n rate OF interest, which.
IL IL were applied 10 British or Wrench
securities, would breed instant panic.
In addition 10 this the government
has placed itself helplcssly in the hands
OF this grinding syndicate for eight
months 20 come. 1t has agreed that IL
will sell no bonds 10 anybody between
now and next October without giving
the syndicate the option Of taking them.
II is a bad bargain, and foolish one,
from beginning To end. II throws
away $4,000, 900 or more at the outset.
1t permanently impairs the national
credit. IL threatens 10 make further
borrowing to meet emergencies impos-
sible upon any reasonable terms.
II is no wonder that when such q
bargain was 20 be made the ncgotia-
tion was conducted behind closed
doors, and that an effort was mado,
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
nfter the worlds call 20 Turn on the
Light"
Until the government dickered In
the dark with syndicate Of bankers
for this last loan its credit wss very
high. It's per cents. with only twelve
years Co run were worth 10 or more In
the.marlSct, It's 4 per cents. with Thirty
years 20 run were therefore worth
about no.
But in this diclSer the government
discredited itself In most extraordi.
nary way IL sold thirty-year per
cents. for about l04. Thus, ms the
World showed recently, it assentcd 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 arc worth Ill, smaller than
| that OF British Guiana, whose as are
worth l07, and not much better than
that OF the Fiji islands, whose AS are
worth lO2.
Now, let us make some comparisons
nearer home. AZ n time when the
/ treasury itself fixes upon l0i or l0ill
as the proper price Of government 4's
/ and sells them az that rate the As OF
/ Athol, Mass. did you ever hear OF
Athol?), are selling in the market AZ
| l07ll; Boston Water as at Ill 10 1l5
according TO term; the as Of Broclston
Mass, Mt l0s: those OF Cambridge,
Mass, at l0s and 100; those OF Detroit
at lO7. those of IIaverhill at los and
l0st5, those OF Hudson county, New
Jersey, az 1884, those OF Lawrence,
Mass, mt 100, and so on through n list
/ that might bc extended 10 great
! length.
OF course the credit OF the governs
ment is not by any means 50 bad a'
this extraordinary treasury operation
would suggest. II Is SO good indeed
/ that even such blow has not beer
able TO depress the price (1iol OF the
! old Is, and the new bonds presently q
be issued TO the syndicate at lOi are al
ready eagerly bid for at III and above.
No explanation or defense that has
been offered excuses this wanton deg
radiation OF the credit Of the United
I States. The refusal OF congress Il
authorize popular loan did not war
rant a secret sale Of bonds by the presi
dent 20 foreign bankers on their OWL
terms-and such termsl The bottom
OF this scandal has not yet been reached
IN. Y. Wocld (Dem.).