Little Falls weekly transcript. (Little Falls, Morrison Co., Minn.) 1894-19??, 1895-05-03
FINANCIAL FOLLY
ENGLAND'S GREAT COMMERCIAL PA.
PER CRlTlclsEs GROWERS METHODS.

PERcRIT,clsEs GROWERS METHODS.
Any schoolboy In Finasos Would Have
Made Better Arrangoments-Tho'B ritiah
Bankers Need Not Expect - He Paid In
Coda Point of Interest to Silver Mon.
We do not wish to press further the
point we raised last week as to the true
character of the new United States loan.
According to President Cleveland's cal
; culation. if congress had agreed to make
the new bonds specifically payable in
gold. the interest charged would have
been reduced by fully el07, 800 per an
mum, amounting in 80 years, or at the
maturity of the coin bonds, to $16, l74,
49," or close upon e3, 236, coo, and if,
after having deliberately elected to pay
that sum in order to have the option of
,discharging the claims of the bondhold-
ers in silver coin, the government and
the legislature should still elect to pay
in gold coin it is certainly not for peo-
pie here to object nor to tell them that
they are wasting money. At the same
time. however, the fact that they have
agreed, in consideration Of higher rate
of interest, to accept payment in silver
and have thus put themselves on a dif-
ferent footing from the other creditors
of the government is q fact which it
would be foolish for those who have
subscribed to the new issue to ignore.
1t will not do for them to say that the
United States government is under a
statutory obligation to maintain the
parity between gold and silver coin, for
obviously if they had believed in the
complete validity and continuing force
of that obligation there would have
been no reason for differentiating be-
tween gold and a "coin" loan.
But leaving that phase of the subject,
the question arises whether President
Cleveland and his advisers have not ag-
gravated a good deal any pecuniary loss
which the perversity of the Legislature
has entailed. The new loan has certain
~ proved an immense succession the
syndicate. Speaking broadly, it was
taken by them at lO41a, and its issue
price averaged 11S. The difference be-
tween those two rates on loan Of e13,-
900, 900 represents sum of fully el,-
100, 900, which may be taken as the
price the United States government have
had to pay for the services of the syndi-
cate. Indeed the payment may be put
at higher figure, for the bonds are at
q premium of fully per cent over the
issue price, and it may he assumed that
If the United States government had ap.
pealed to investors direct it would have
been able to realize to its own advan-
tage something Of that higher price. It
would appear therefore that President
Cleveland appraised at too low figure
the credit Of the United States, impair
ed although that has been of late. In
any case he has certainly given the peo-
pie Of the States another object lesson
upon the evil Of tampering with the cur
rency in addition TO that afforded by
the higher rate of interest payable upon
the 'coin" bonds. Financial syndicates
are an expensive luxury with which a
great and wealthy nation like the Unit
ed States ought to be able to dispense.
When Mr.. Goschen carried out his con-
version scheme, the entire cost in COM
missions to agents, other than the banks
of England and Ireland, incurred in
converting e558, 900, 900 Of 3 per cents,
was G234.00O. And now we see the
United States compelled to allow inter"
mediarios to earn profit Of over e.
600, 900 on loan of $4,000, 900. OF
course the laborer is worthy of his hire,
and no one would dream of blaming the
syndicate for making the best possible
terms for themselves. But if the none
tary affairs Of the States had been man.
aged with ordinary prudence their serv
ICES would not have been needed, and
as the avidity with which the loan has
been taken up may possibly have bad
effect in causing the legislature to think
that, after all, their pranks have done
no very great harm, and thus encourage
them in their folly, it is desirable that
this fact should be emphasized.
1t now remains to be seen whether the
treasury will be able to retain the gold
with which the syndicate has under
taken to supply it, or whether that, in
Its turn, will be drained away, as were
the proceeds of the two former loans.
As to that, it is too carly yet to form any
definite opinion. No doubt the arrange
ment with the syndicate should strength
on the hands Of the treasury, for the
contracting firms are powers in the bull
lion market and can do great deal to
influence the gold movements. 1t is
hoped too, that the effect of their CO.
operation will be to increase confidence
in the ability Of the treasury to MAIN
tain gold payments, and so tend to put
stop to Withdrawals Of the metal.
For our part, however, we do not be-
ieve that there can be any real revival
of confidence until the legislature can
be got to deal with the currency in a
sensible fashion, and when it is said
that the revenue is now improving, and
that the treasury will be able to reduce
the amount Of paper currency outstand-
ing, and so limit the power of the mar
ket to take gold from it by presenting
notes for payment, it has to be pointed
out that as yet the revenue still falls
short Of the expenditure, and that if
later on the treasury was in a position
-