St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1896-01-07
A POPULAR LOAN.

The critics of this administration
and hunt some other ground for fault
finding than an alleged interest in
bond syndicates and their profits
These gentlemen who have been de-
claiming for the past week about the
villainy Of the treasury in making its
exclusive arrangement with j. Pier
pont Morgan, and are even yet publish.
ing stale articles on the subject, might
have the grace to be ashamed of them
selves if truth telling and fair deal
ing were any part of their stock IN
trade. After all their elaborate pre-
dictions of what the administration
would do, the secretary of the treas
ury has issued a circular to the pub
lie calling for a popular subscription
to the new loan. This cannot be really
a popular subscription, in the true
sense Of the term. The bonds which
he has authority to issue, under the
old law of 1875, bear per cent interest
and run thirty years. Issued on
such terms, they will command a
premium in any market. The bidder
must therefore figure on their value
above par, and consider this in the
proposals that he has to submit AL
though bonds are to be issued in de-
nominations of fifty dollars and multi
pies thereof, it is probable that COM
nIy AT g,
way into the hands of small investors
A loan Of that kind, which should be a
real popular loan, cannot be made I'M
til some future congress shall have
authorized the issue of different class
of bonds. A true popular loan would
consist of bonds to be placed on sale
at the United States repositories in
the various cities at par. When any
man who had fifty dollars or more
saved could thus go and invest it in
government securities at their face
value, it might be called properly a
popular loan.
The conditions of the present sale
involve a nice figuring of premiums
a consultation Of the market reports,
and comparison with the value of
the 4 per cents issued a year ago.
which people who are unfamiliar with
the details Of financial operations are
not likely to make. The chances are
that the new loan will be taken mainly
by banks and trust companies, and
other financial institutions in different
parts Of the United States, either as
security for bank note circulation or
for sale at an extra premium
to other customers. The peo-
pie of this country are thoroughly
satisfied with the security of it's bonds,
and there is capital enough to alb
sorb more than the $1O0,OOO,OO which
are now offered. Whether the subscrip-
ton will be general or not remains
to be seen. By this arrangement
the government will obtain the best
terms possible. 1t will not be open
to the unjust suspicion of having ca
tered to any financial interest, and the
bonds viii be disposed of at something
like the ruling market rates.
At the same time, it is open to ques-
ton whether the advertisement for a
public subscription will actually be of
as much practical advantage to the
treasury as the former Arrangement
with the bond syndicate. The peculiar
circumstances of the case must be
borne in mind. 1t is to be remembered
that the treasury is not selling these
bonds because it needs dollar of reve-
nue.. There is plenty Of money in sight
for all expenditures. The bonds are
to be sold only to replenish the gold
reserve. Those who purchase them be-
ing obliged 10 pay for them in gold
coin or certificates must turn that
amount into the treasury. They will
be obliged to obtain 1t from the banks.
Whence will the banks get it? Some
portion Of it will be drawn from their
own gold reserve, but the major Dor
ton, it is probable, will be taken out
Of the United States treasury itself
by means Of the greenbacks Under
the arrangement with the syndicate,
the bankers concerned agreed to pay