THE STORY OF THE NEW FRENCH LOAN: THE ROTHSCHILD8 AND THEIR PAY.

Daily Southern Cross, Volume XXVIII, Issue 4743, 6 November 1872, Page 3

THE STORY OF THE NEW FRENCH LOAN: THE ROTHSCHILDB AND THEIR PAY.

To show what is thought of the negotiation of the new French loan in Europe, we mayquote the following from the British Trade Journal: —" The financial event of the month is the fact that France has appealed to the world for the modest sum of £120,000,000 sterling, and has got twelve times that amount. 84 4 was the price of issue. We are safe in saying that neither in magnitude nor m immediate results has this feat been paralleled from the days of Croesus downwards. Independently of its influence on our own money transactions, it must be recognised as the most splendid, and not the less splendid because it is the most sublimely audacious attempt to redeem national obligations ever witnessed." The Economist and the Bullionist comment in a similar strain, while papers as temperate in tone as the Spectator permit themselves to indulge in unaccustomed rhetoric upon the occasion. Whatever of credit or triumph or glory attaches to the achievement belongs to the house of Bothschild, through whom the loan was given to the world. The details of the event are peculiarly interesting, and more so because of some peculiar complications which have since arisen in the London market, and have advanced the price of the loan to 5 per cent, premium, or a quotation of 89^. The amount of cash needed by the French Minister was $700,000,000. Of this sum, he determined to offer the equivalent of $300,000,000 on the French market—that is, to the French people —and the balance, $400,000,000, was to be offered for subscription through the Messrs. Rothschild in the foreign markets. The price determined on was 84£ — a price attractive enough for a French loan in ordinary times ; but the times were not ordinary, and the price alone might well have failed to draw out a prompt subscription: of the entire amount. At this point comes in what must be regarded as the master stroke of the business. The amount of deposit required of each subscriber was 144 P er cent, of the amount applied for. It was decreed that this deposit need not be (as customarily) in cash, but approved securities — that is, securities approved by the houses of Rothschild which accepted them, and not excluding (according to the London Times understanding) private paper executed for the purpose of depositing. The result, it is conceded, transcended the expectations of the whole financial world, not excluding the French Finance Minister and the bankers whose agency had achieved the success. When the subscriptions closed at 5 o'clock in the afternoon, the inconceivable amount of over eight thousand million dollars —or nearly theamouht of thefundeddebt of Great Britain. —had been applied for, and the securities deposited (14^ P er cent, of the application) equalled the total capital amount of the loan. Now for the complication. Before the booka closed it was known that the subscription would exceed the amount of the loan. Therefore subscribers would be allotted but a fraction —possibly one-half of the amount they had applied for. On this state of facta a premium began to be paid for allotments which reached over 2 per cent. English subscribers in particular sold freely. Thej"- even sold so freely that the premium receded to l^. And they oversold. A man who had subscribed for £100,000, relying upon receiving an allotment of fifty per cent., or £50,000, sold that amount at two per cent, premium and pocketed £1,000 clear on his subscription. But the loan is closed. Instead of having been subscribed for twice over, and each subscriber getting one-half of his subscription, it has been subscribed for thirteen times over, and each, subscriber 'gets but about oneseventh of his subscription. The man who sold £50,000 allotment at two per cent, premium finds that he receives less than £15,000 allotment. He must buy the remaining £35,000 in the market in order to make his delivery. He has unwittingly " gone short" of the stock and " put up a corner" on himself. And in London this was done to such an extent that on the sth instant allotments of the new French loan stood at four and a half per cent, premium. Settling-day is still some three weeks off, and it is supposed that the premium may reach five per cent. It is interesting to know what pecuniary reward accrues to the houses of Rothschild in this negotiation. First is the direct commission of one and a half percent, on the amount sold by* them, $6,000,000. Next is the profit which accrues from having $400,000,000 of exchange to handle in one year. Third, is the premium, to be realised on allotments, and it is .supposed that the Rothschild houses, for their own account, receive allotments of $200,000,000. From the exchange and premiums the houses are estimated to receive a profit of nearly if not quite §10,000,000. In fine, then, the negotiation of the French loan will " pay" the Rothschilds directly in the first year upwards of $15,000,000. The final profit which accrues to the Rothschilds in common with other subscribers to the loan is the gradual advance that may be expected year ,by year from the first price of 844. Ultimately, and it will not be many years hence, the French people will have absorbed the whole of the loan at par. —San Francisco Neiosletter.

Hints for Agriculturists : You can't farm properly unless you have a farm. When you have one, much depends on its soil. In America the industrious farmer, who devotedly digs up his estate, finds ita oil is often petroleum, but this remark only applies to Yankee subscribers. To discover the soil of your f aim — and we are now addressing our .New Zealand constituencies — turn it OTer as much as possible. Don'fc, however, turn it over to anothar tenant, or else he will discover ifc and not you. To turn it over properly you require a spade. !N.B. — Never call a spade a spade. Indeed, as a rule, never call it anything — it can't hear you. A plough is also useful. Join the "Arable Land Improvement Company (Limited)," and they will allot you some plough shares at once. Then go to work, unless indeed the work will come to you, and save you the journey. The properly stocked farm-yard contains many more than three feet. Perhaps you keep fowls. That's the rule. Perhaps the fowls keep you. That's the exception. In any case give the fowls a fair chance and plenty of barley, and await the course of events. If they do not produce eggs, lay the fault at their door ; if they do, they will probably lay it—the egg we mean — at yours ; though it would be better all round if they laid ifc in the nest. Have chickens, by all means, if you can. Never be without your home brood. We will not give a decided opinion about the g'shng. " De goosetibus, etc.," you know. The Northern Journal of Montreal says : " In the present institution of marriage there are three classes of wives, and only three — the slave wife, the dependent pet wife, and the companion. Gentlemen, which do you choose ? Shall it ha the king and his slave, the king and his canary bird, or the king and the queen ? For the preservation of marriage theie can be hut one answer." , A Saratoga notability, who has his rooms at a hotel draped in mourning for his mother, remarked the other day to some sympathising friends ihat he " would not have lost her for fire hundred dollars. " "