No. 34.
Mr. Tree to Mr. Bayard.

No. 318.]

Sir: On Monday, Tuesday, and Wednesday of last week subscriptions were received for an issue of one hundred thousand bonds of 100 francs each of the loan of the Independent State of the Congo. This is a part of the sum of 150,000,000 of francs authorized to be borrowed by a recent royal decree, published in the last number of the Official Bulletin. The price fixed for the bonds was 83 francs each. They draw no regular interest, but each bond bears a number, and there will be six drawings annually. During the first period of eight years twenty-four bonds will be annually drawn by lot, one of which brings a prize of 200,000 francs, and five others 150,000 francs each. The other eighteen yield from 1,000 to 5,000 francs. In the next period the prizes are of reduced value. A plan of redemption is also arranged, so regulated that all of the bonds are to be paid off at the end of a century. In the first year, for example, fifteen hundred bonds will be redeemed at 105 francs each; in the second, a certain number at 110 francs, adding each year 5 francs to a bond.

The scheme seems to be a very clever one for the state, which, by the plan adopted, is enabled to borrow the money at something like 2 per cent, per annum. A portion of the money is invested as a sinking fund, and will be permitted to compound. In the mean time the state is put in possession of the ready cash it so much needs.

The result of the offerings of the first one hundred thousand bonds has been very flattering to the state. One hundred and eighteen thousand [Page 41] were subscribed for in three days, or eighteen thousand more than were offered for sale.

The secret of the success of the loan is undoubtedly largely due to its lottery feature, which presents the temptation of possibly gaining a large prize.

I presume that, now that the Congo Government has felt the public pulse as to the degree of cordiality with which its bonds would be welcomed, it will continue to launch other installments upon the market until the whole sum authorized to be borrowed shall have been taken up.

I have, etc.,

Lambert Tree.