Year: 1871

cess Of the New Loan In Europe.


Yesterday, in London, Frankfort and other
European financial centres, the subscription
books to the new FIVE per cent funding loan
were opened under the auspices Of the Euro
pean Syndicate. The result was a most graft
flying and pronounced vindication of the stand
ing of American credit abroad, the more
satisfactory from the obscurity in which such
recognition was previously and recently
involved. Before noon the subscriptions, or
to speak more properly, the applications
for the new bonds reached an aggregate
of fifty million dollars, and at the close
of business these applications in London
and elsewhere are stated to have exceeded
seventy-ive million dollars. So complete,
indeed, was this first essay at popularlzing
the new loan-tbe entire amount in the hands
of the European Syndicate. including their
own subscription of fifteen million dollars,
being only eighty million dollars-that 1t Is
stated the subscription books will be closed
to-day. This closes up also Mr. Bout
wells first instalment of five per cent
bonds formally placed in the market under
the operation of his circular of February 20,


1871, excepting the fifty million dollars re-
served for the option of the national banks
for sixty days from the 10th inst But he has
still O reserve of three hundred million dollars
of five per cents, which 1t is doubtless his
purpose, although not so officially stated, to
retain as a sort of premium upon the negotia-
tiou of the four and half and four per cent
bonds.


While there is much occasion for congratu-
lation in this rapid absorption Of our new
funding loan we cannot however, see in it
anything surprising. The real matter of sur
prise Is that upon the first offer in exchange
Eve per cent bond, having ten years certain
to run, and perhaps forty, holders Of matured
five-twenty bonds did not Immediately avail
themselves of the chance afforded them. 1t
must have been patent to every one of any
financial judgment whatever, after the close
of the war with the South, that an effort
would Immediately be made by the United
States to fund its debt at O lower rate of
interest, and they ought certainly to have seen
that no more advantageous offer could or
would be made than five per cent bond in
exchange for six. The real secret of
the Indifference which met Mr.. Bout
wells initial efforts at funding is that no
one outside of small circle of admirers who
had no bonds to exchange knew of bis pur-
pose at all. Hence the success of the new
agency becomes plain, in its use of the tele-
graph and the press to proclaim the work it
had on hand. Mr. Boutwell, blew penny
whistle expecting the world to hear, which it
did not; his successors in the negotiation
fired off succession of mitrailleuses in every
prominent financial centre d Europe, and kept
the special correspondents, Reuters agents
and the agents of the Associated Press busy


chronicling their doings. Mr. Boutwell, might


have done the same with the same result; for
behind both, as the real cause of the success
of the negotiation, stands the unimpeachable
credit of the United States and the great and
growing prosperity Of our country. Recurring
to the original Offering of the loan by Mr.. Bout
well, it is surprising, indeed, that the entire
monopoly of national banks did not compete
Immediately for the exchange of their five
twenties for the two hundred millions of dol
lars of five per cents then uncondtionaIly
offered, securing then, as it would have done,
a contract, embraced in the agreement of the
Secretary of the Treasury and binding upon
the government, to continue their banking
privileges during the whole time within which
the new bonds could not be paid off. This
would have put an end, for the next ten years
at least, to any danger Of Congressional inter-
ference with these privileges and stopped
great deal Of the popular clamor that the
banks have 'too good thing of it, )" to quote
an argument advanced in support of this ex-
change of securities. With, therefore, 80
much Indifference to the advantages of the new
loan on the part of those among us who were
to reap the greatest benefits from subscribing
to it, the triumphant success which attends it
at the eleventh hour seems the work of magic


With money at two per cent in London and
q plethora of currency in all the continental
banks, so that Germany's immediate payment
of her war loans almost escapes notice,
there is nothing to be surprised at
that United States five per cent
DOlQ euOulu huu lcauy tNhciC, duu ouC Cou-
not but regard the agency in its negotia'
ton as being infinitely less than the security
and interest offered. Another reason for
Secretary Boutwel's failure is to be traced to
the confusion in which he involved the ques-
ton of exchange by his numerous circulars,
the first of which was difficult of clear under
standing-a condition not helped by those sub
sequently issued. Even now it is hard to de-
termine from the text of any Of these circu-
lars whether the Secretary ever offered more
than two hundred millions of dollars of five
per cents OF, if he did, whether he has for
mally withdrawn the extra three hundred
millions of dollars, not included in the present
arrangement, from the market. When we at
home find this mudde it is not to be wondered