Year: 1877

TIE NEW LOAN.


The popular four per cent loan indicates its
name and the wisdom Of the Secretary of the
Treasury Ten of the thirty days allowed for
popular subscriptions still remain But the
subscriptions already received, outside OF those
forwarded through the Syndicate in the usual
folm already exceed $10,00O.OO0 1t is stated
also, that a large proportion of these subscnp-
tions are from individual purchaScrs-the small
investors who do not usually make haste TO take
a new class OF bonds until their value III the
market has been established by the operations
of large dealers or corporations. This is al
together the most encouraging feature; ii
proves that confidence in the Government, and
willingness to take its bonds at lower rates OF
interest than ever before, are not confined TO
the great bankers The Syndicate will not be
compelled to "make a market" for this loan
the popular demand for the new bonds already
supplies market to sustain the operations OF
the Syndicate, and to insure their success.


Ten days remain, during which very large
subscriptions may be expected. The terms Of
the call were not such as to induce subScrp
tons, prior to July 1St, from those who have
funds otherwise temporarily invested. The new
bonds bear interest from that date, but sub
scl1ptions will be received, with equal advan
tage to buyers, until three o'clock p. m. on the
18th instant, and the larger operators, and the
many banks, insurance and trust companies,
and other corporations which may seek this
loan as permanent and safe investment, were
not expected TO send in their orders until
nearly the close OF the period. The large bids,
from domestic sources, have yet to come, and
it is not yet possible to judge how many mil
lions may thus be taken. Meanwhile the Syndi-
cate already has offers, it ia SAID, for $14,O00,
600 in exchange for six per cents held abroad,
so that the entire sales within the first month
will far exceed the amount which the assOcia-
ton of bankers definitely pledged itself to
place.


Within very few years, investors have
seen a marvellous change in the credit of the
United States. 1t is not very long since six
per cent bonds were sold with some difficulty
at par in gold. After the Funding Act passed,
it was some time before the Government could
make headway in the sale of five per cents
at par, but those who were so fortunate as to
have faith in the public credit can now sell at
an advance Of S6 to SS per 500 the bonds
which they took five years ago or less thus
realizing for tleir money from one to two per
cent yearly beside their regular interest III
cold The sales Of the 4l2 per cents have re-
suited even more satisfactorily to purchasers,
who can now sell at a clear profit of about
three per cent in less than single year, be-
side their interest. 1t is not unreasonable to
expect that the four per cent bonds will
speedily become still more popular They run
So, au No
highly appreciated by the owners of five
twenty bonds which are now being called in
they are exempt from all taxatiOn and the
amount of the loan authorized ($7OO, ,OOO,OOO)
will suffice, beside providing for specie resump-
ton to clear off the Tedeemable six per cents,
and make a considerable change in the five per
cent debt While the bonds bearing higher in
terest will therefore shrink i'll market value, as
the probability of early redemption increases,
the new bonds will become the favOrite and
permancnt form of investment, especially for
trust funds, reserves, and the savings OF lndi
yi.uals who do not care TO brave the uncer-
tainties of railway or other corporate manage
nent or of municipal government In view of
the daily increasing distrust of other forms of
investment, once most popular, it may be eX-
pected that many millions will speedily seek
security in this loan. A speedy advance in the
price would surely result, even if the most
powerlul combination OF capitalists ever formed
had not already manifested its power to put mp
the price as soon as the period of popular sub
scIiptiOn has ended.


While the loan thus offers peculiar advan-
toges 10 the individual investor, since it is a-
certain as any human event can be that be-
fore he has to take and pay for the bonds
for which he may now subscribe, they will bc
worth in the market more than he will pay fOI
| them. the opportunity is one which managers
| Of trust funds, and especially conductors OF
| banks, savings banks and insurance companie,
cannot afford 10 neglect. The Government is
moving steadily and resistlcssly toward specie
resumption. Within two years. at the most
| liabilities will be in gold values, and no pru-
/ dent manager will hesitate to make correspond
| ing preparation as TO assets. The Government
| bond is everywhere accepted at par as a salts
| factory investment, and the change from Other
| Mgh-piiced bonds to the four per cents viii
enable institutions materially to swell the pan
value of their securities. Six per cents, and
even five per cents, are liable to be called
within few years. Those who do not take
the four per cents within the next ten days are