overnment
one and a half per cent. above the market prices, and they add that
they do not think you would wish to have them do so. They also
say that if they wanted the bonds for _speculative purposes only_
they should give up the contract and purchase in the open market;
but their policy is to keep the price at par and not to buy or sell
when it is below par. Bonds will sell more rapidly when they are
at par than when below it. It is the speculators and not the
investors, as a rule, who deal in stocks when they are cheap. If
the price of the bonds had remained at par, I have no doubt but
that all the bonds I have here would already have been disposed
of, and that the parties would have been ready and willing to make
the subscription for five millions on April 1.

"The Messrs. Rothschild say that, owing to the high price which
they were compelled to pay for called bonds, and the reduced price
at which they were compelled to part with a portion of the four
per cent. bonds, they have made a slight loss on their transactions
so far. They like to have business relations and connections with
governments, and I think that that disposition on their part is
paramount to the question of profits. The matter of the subscription
was discussed again yesterday, and deferred until Monday for further
consideration, and I was asked to send the following cable message
to you:

'Rothschild & Sons request me to say they do not consider contract
of January 21, 1879, requires subscription $2,000,000 to be made
April 1. On account of market price below par at the present time,
they desire delay subscription a few days. Hope you will consent.'

"I hoped you would consent, because I think it quite important,
for many reasons, that we should dispose of bonds on this side of
the water. They take the place of actual gold in settling exchanges,
and thereby prevent the disturbances in the money market which
always result from the moving of bullion. I have no doubt but that
the use of these bonds in this manner has stimulated purchases of
grain and produce from us which would never have left our shores
if payment for the same could only have been made in bullion. I
received this morning your cable message in answer to the one I
sent yesterday, as follows:

'I think contract of January 21, 1879, very plain. Subscriptions
should be made April 1; but, if they desire, time will be extended
to April 8.'

* * * * *

"With great resp