THE MEETING OF TURKISH BONDHOLDERS.

IT is all very well to abuse American Inflationists for their foolishness and ignorance of finance, but they are not more ignorant or more foolish than keen City men sometimes show themselves to be. A great meeting of such men was held at the City Terminus Hotel on Tuesday, to discuss the position of the Turkish Bondholders, and nothing ever was sillier than the conversation, except, indeed, the Resolution, which was unanimously accepted. Three ideas were evidently predominant at the meeting,—that the Turkish Government was in part excusable, because it was paying " excessive " interest ; that the Powers ought to compel Turkey to keep her engagements ; and that no compromise should be accepted under which the holders of special Securities were not better treated than other people,—and it is hard to say which of the three is the most unsound. Mr. Galloway propounded the first, and actually went so far as to say that the decree would produce good, because, if Turkey had gone on paying "excessive" interest, there would have been nothing left to pay with. That there may be such a thing as extravagant interest nobody doubts, and even the law allows, in many

statutes about compound interest but the argument has no 'practical meaning, for nobody can fix what the limit is. No creditor compelled Turkey to borrow, nor is it possible to decide that loans issued at 40 ought to be repudiated sooner than loans issued at par. Would Mr. Galloway like Sir Stafford Northcote to go on paying all Consols, except those issued at 50? Turkey may plead that her extravagance in offer- ing such prices has increased her difficulty in paying, but that is a plea for a composition in insolvency, not for repudia-

tion. A State in extremis may be justified in offering 20 per cent, for money rather than go without it, but as long as she can pay, the greatness of her relief is no excuse for fraudulent

ingratitude. The obligation of a State, like that of an indi- vidual, is to pay its debts, not to pay only those incurred when it did not particularly want money. Of course, in presence of insolvency creditors are powerless, but Mr. Galloway's theory would lead to an international rule as useless as the old usury- law, and is the more dangerous because it is the very idea of Turkish statesmen, many of whom assert as ample justification for repudiation that they are paying too much, and there-

fore fix a rate which varies with every separate loan. They give, in fact, 31 per cent, for the loan of 1854,

and 6 for that of 1871, and say, 'Now we have reached a just price, and will keep our engagements.' Next came the question of Government intervention. It may be said broadly that the entire meeting thought the Governments of the world,

or at all events, of England and France, ought to compel the Government of Turkey to pay its debts. Mr. Surgey pro-

pounded that theory in so many words, and was cheered by the entire meeting. It never occurred to anybody that if the British Government ought to make Turkey pay its Bondholders,

which would be a difficult operation, it ought, a fortiori, to

compel any defaulting railway, or company, or person abroad to pay them, which would be comparatively an

easy one. No one asked why Turkey should be coerced

more than Mississippi or Virginia, or Mexico or Honduras, or the defaulting owners of the last new Californian mine. Nobody wanted to know how Turkey was to be coerced except by a war which would make her bankruptcy immediate, or apparently doubted that it would be quite fair to tax holders of Consols in order that holders of Foreign Bonds should get their money. Englishmen are supposed to be the most practical men in the world, and City men the most practical among Englishmen, yet a roomful of the latter loudly cheered the suggestion that the Italian Government, of all others on earth, should bully the Sultan into keeping faith with English creditors. The truth seems to be that there is a vague belief afloat that if England and France would put on " pressure " enough—that is, would demand the dismissal of Grand Vizier Mahmoud—another Grand Vizier would arrange some kind of composition. It is possible he would, but if it were a composition acceptable to the Bondholders it could not be kept, and if it were a compo- sition burdensome to the Seraglio, it would not be kept any more than the original agreement. Are the Governments to keep on interfering—that is, to undertake the financial adminis- tration of Turkey without abolishing the Sultan—or are they to annex the Turkish Empire, or what are they to do ? They can do nothing, except, indeed, seize the Egyptian Tribute, which is possible, and as the tribute has now been forced by

successive extortions up to £960,000 a year, would give everybody just one - half per cent. per annum all

round. Even if Turkey could pay, there is no other revenue which can be taken by force without breaking up Turkey, and this would be rejected by the Bondholders, who

in the most characteristically British manner refused to listen to Mr. McCoan, perhaps the best-informed man in the room, when he tried to show them that Turkey neither could nor would pay another penny. The propriety of Government in- tervention in truth cheered them, and the idea that Turkey was bankrupt depressed them, and they cared no more about the facts than so many Frenchmen. One speaker alluded to the mineral wealth of Turkey, and made quite a point, though half the men there, if they had thought for one minute, would have known that the British unopened mines, let alone the TuTrkkiheesthse, awbosulu:dbaibtriegesaibnahdtohsecuwee::ir, nI0o0*,000bystrellsuasioing. n, might be mere outcries, and as so often happens in England, the meeting might be much wiser than its individual members. Well, it wasn't. The best course for the Turkish Bondholders is to empower the Council of Foreign Bondholders, which is composed of men of experience, to cantyaftoCro:s2ta or menace, or offer of some acceptable plan, such, for instance, as the grant to the Bondholders of something they can actually get, such, for example, as the right of raising a lottery revenue, —though we do not recommend the Turks to grant that—on the Italian plan. To obtain this authority was the object of the meeting, and it was embodied in Mr. Galloway's original resolution, but the meeting would not pass it. The Bondholders could not bring themselves to give up the absurd theory that the holders of bonds specially secured on revenues they could not get at were in the position of mortgagees who ought to be paid first, and they actually put on a rider barring the Council from accepting any arrangement, " ex- cept on the basis of each class of Bondholders retaining the full advantages accruing to them under their special guarantees." Is not that beautiful ? Smith borrows a pound of Brown on a promise to pay, and another pound of Robinson on a promise to pawn his watch and pay out of the proceeds, and then fails. Brown and Robinson accept another promise of ten shillings each as composition, but insist that Robinson's ten shillings shall be paid out of the proceeds of the pawning of the watch, which neither of them has ever seen. Verily, there are simple persons left even in the market-places. Does Mr. Hammond or Mr. Smith, the two gentlemen who carried the rider, think a mortgage-debt safe because the mort- gagee has a superior moral claim to be paid, or because he has got the title-deeds, or a legal lien on the property ? If the former, where is their proof, and their evidence that Turks agree with them as to the comparative obligation of debts? If the lat- ter, where are their deeds or legal liens ? Or do they really think that they can stop the Sultan from abolishing a tax on sheep in Anatolia, if he thinks a tax on tobacco less oppressive or more productive? In practice these special guarantees to rights of taxa- tion, which are invisible, imponderable, and untransferable, have always been found as illusory as, were they not illusory, they would be outrageously oppressive. The Sultan has a good deal of power, but even he has neither right nor capacity to sell his right to tax, and to remit taxation, to a foreign Exchange. He might as well sell his people, and would be quite as ready to do it. There is just one plan, and one only, from which the Bondholders may have something to expect, and as that is too cynical for European society, their chances seem to us small. If they like to act as Oriental creditors would act, submit to violent wrong, go right over the heads of the Viziers, Pashas, Secretaries, and the rest of the wretched crowd of ants in the Sultan's path, and go straight to their master, making it his personal interest that the dividends should be paid, they will get as good a guarantee as an Asiatic State can give. That is to say, if they will consent to assign one-fourth of the debt to the Sultan personally, on condition of the whole being con- verted into three-per-cent. Turkish Consols, they will for

the future be paid while a piastre remains in the Trea- sury. Everybody in Turkey will be robbed before they are robbed, and they may sleep in peace till called on for

another composition with the conqueror, whoever he is—it may be Brigham Young, who is going to settle in Jerusalem—

who will, within a generation, have Constantinople. They will say that such a plan is a reward for spoliation. Scarcely, for the real spoliators will get nothing ; or they may doubt whether a mighty Monarch, the head of the second religion in the world, would accept such terms. Just let them try. What is the world for, except to offer tribute to the Commander of the Faithful? How many times did Sultan Mahmoud,

a man of our own day, the ablest and most successful of his line, suspend a decree of confiscation because he was offered a

palace, a diamond, or a slave-girl ? The Bondholders do not know these men, or that overmastering, all-devouring imperial selfishness which stifles all that is good in absolute Princes bred in the harem, receiving always not merely obedience, but cordial obedience, and not afraid when they die of going to hell. Sultans are capable, as Sultans, of acts which do not enter into the dreams of English hypochondriacs. Or finally, they may say they will be betrayed again. So they may, under any arrangement, but their chance will be a good one. A Sultan of Turkey does not regard himself as part of his Government, but as a Being apart, for whom his slaves govern, and he will not if he can help it let them, in anybody's interest, do anything by which he may personally suffer. Why should he ? He is not there for their benefit, but they are there for his. Are they to cheat God's Vicegerent, or question what he ought or ought not to take ? Suppose he takes all ?