The herald., 1896-02-06
THE BONDS


The opening of tho bond bids yestsr-
day showed that as far as the sale is
concerned the treasury department has
met with fattering .uccess. The issue
has been subscribed to five and half
times over, and the prices realized will
apparently be such as to float the en-
tire issue on the basis of to BE- per
cent interest.
The abundance and favorable tern
of the subscriptions indicate the pres
ence of good deal more loose gold in
the country than our free silver and
populistic friends have been willing to
admit, although, Of course, a sub
scription of $55S,000,00O does not mean
that amount is available and be-
ing held for the purchase of bonds.
A large part of the gold represented
in the bids would undoubtedly come
from abroad, while very many of the
bidders are unknown to each other,
counting on the same stock of gold
with which to buy bonds in the event
of the acceptance of their bids. One
hundred million dollars in gold can be
the basis of $500,000,000 in bond sub
scriptions by one hundred different
persons, the people whose bids are ac-
cepted being the parties who will pro-
ceed to procure the gold to exchange
for bonds. AS the amounts Of the ac-
cepted subscriptions are payable in in
stallments, the payments will not be
embarrassing to people with the right
kind of assets. The only gold that
bidders need actually to have on hand
is the amount of the first payment &C.
cording to the terms of the sale as set
forth by the secretary of the treasury
when the issue was announced on jan
uary 9Th, last. And then besides, the
possessors of free gold in the bank
vaults Of the country ready for a gilt
edge bond investment, there are no
doubt among the multitude of sub
scribers number who intend to util-
ize the endless greenback and treasury
note chain to draw the very gold they
buy bonds with from the gold reserve
of the treasury.
1t is in this latter proposition and in
the diverting of gold from the ordi-
nary channels of business activity that
the weakness of what is known as the
popular bond issue lies. No matter
what the amount Of bonds sold or how
favorable the prices may be, there is
yet 40 guarantee that the issue will
suffice t. maintain the gold reserve
for any considerable length of
time, and there can be none 80
long as the present currency sys-
tenn endures. And the diversion of the
country's gold from the business fields
to the treasury vaults cannot at least
do good if it does not do harm. There
fore from calm, dispassionate busi-
ness point of view, the much-abused
syndicate deal of last year was far su-
perior to the present method, for it ac-
complished the purposes of the govern
ment in way not possible with the
popular subscription plan. In the case
of the syndicate deal it was stipulated
that at least half the gold bought was
to be brought from abroad; that none
of the gold used to buy bonds should
be drawn from the treasury, and that
the syndicate should use it's influence
to 80 control exchange and the export
of gold until October of 1895 that until
that date at any rate. period of six
months, the gold reserve would be kept
at par. These conditions were ex-
ecuted in letter and spirit by the syn
dicate; the gold was obtained indie.
pendently of that in the treasury, and
to the extent of half the amount, out
side of the country, and the solvency
of the government was assured for
time sufficient for congress to take
such action as would make further
issues of bonds unnecessary, as every
body knows congress failed to utilize
the opportunity then and has done
nothing better since.