The true northerner. [volume] (Paw Paw, Mich.) 1855-1920, 1895-04-26
WHAT LONDON THINKS.
The Leading Financial Paper of the
World Analyses Growers
Methods.
A Style of Tinanciering That IL Regarded
~ Very Peculiar in LoDdon-Cieve-
land Obeys the Gold Bugs,
but Fails tn Get an
Option

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 calculations. If congress
had agreed To make the new bonds
specifically payable in gold, the inter
est charged would have been reduced
by fully flO7, 800 per annum, amount
ing in thirty years. or at the maturity
of the coin bonds, To SIC, ia, 20" or
close upon e3,236. 900. And if, after
having deliberately elected to pay
that sum in order to have the option
Of discharging the claims of the bond
holders in silver coin, the government
and the legislature should still elect
to pay in gold coin, il is certainly not
for people here To object, nor To tell
them that they are wasting money.
At the same time, however, the fact
that they have agreed, in considera-
ton of higher rate OF interest, to ac-
cept payment in silver, and have thus
put themselves on a different footing
from the other creditors Of the govern
ment, is fact which il would be
foolish for those who have subscribed
70 the new ISSUE TO ignore. 1t will
not do for them to say that the
United States government is under
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 differentia-
ting between a gold and coin"
loan But leaving that phase of the
subject, the question arises whether
President Cleveland and his advisers
have not aggravated a good deal any
pecuniary loss which the perversity of
the legislatur has entailed. The new
loan has certainly proved an immense
success-for the syndicate. Speaking
broadly. it was taken by them al l04}9,
and it's issue price averaged ll3. The
dift renee between those two rates on
a loan of $4,000, 900 represents a sum
OF fully 81, 100000, which may be taken
as the price the United States govern
Ilent have had To pay for the services
of the syndicate. Indeed, the payment
may be put at "A higher figure, for the
bonds are ct a premium Of fully q per
cent. over tie issue price, and il may
DC assumed that, # the United States
government had appealed to investors
direct, it would have been able To
realize To its own advantage some
thing of that higher price. 1t would
appear. therefore. that President
Cleveland appraised at too low figure
the credit of the United States, inn
paired although that has been of late.
In any case, he has certainly given the
people of the states another object
lesson upon the evil of tampering with
the currency in addition to that af.
forded by the higher rate of interest
payable upon the coin" bonds. Finan.
cial syndicates are an expensive luxury
with which a great and wealthy nation
like the United States ought TO be BILE
todispenSe. When Mr.. GoSchen carried
out his conversion scheme the entire
cost in commission to agents, other
than the Banks of England and Ire
land, incurred in converting E55S, 600,
900 of 3 per cents. was E234, 900. And
LOW we see the United States com
PEELED to allow Intermediates to earn
a profit of over 81. 900 900 on "A loan of
El3, 000. 900. OF course, the laborer il
worthy of his hire, al 4 no one would
dream of blaming the syndicate for
making the best possible terms for
themselves. But if the monetary af-
fairs of the states had been managed
with ordinary prudence, their services
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 en-.
courage them in their folly. 1t is de-
sirable that this fact should be empha-
sized.
1t now remains to be seen whether
the treasury will be able to retain the
gold with which the syndicate has I'M
dertaken To supply it, or whether
tirat, in its turn, will he drained away,
as was the proceeds of the two former
loans. As to that, it is too early vet
TO form any definite opinion. No
doubt the arrangement with the syn
dictate should Streng then the hands of
the treasury, for the contracting firms
are powers in the bullion market and
can do great deal To influence the
gold movements 1t is hoped. too
/ that the effect of their corporation
will be to increase confidence in the
ability of the treasury To maintain gold
! payments, and so tend to put a stop To
any precautionary Withdrawals of the
metal. For our part, however, we do
not believe that there can be any real
revival Of confidence until the legisla-
ture can be got TO deal with the cur
rency i'm a sensible fashion. And
when IL is said that the revenue
is now improving and that the
treasury will be able To re-
duce the amount of paper currency
outstanding and SO limit the power of
the market to take gold from IL by pre-
'senting 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 to reduce the volume of its
paper circulation, so long as no eff
cient substitute for that is provided, il
could not do SO to any material extent