The Sun.
London, England, 1870-02-04 00:00:00

SHERMAN AND SUMNER'S FINANCE BILLS.

(From the Anglo-American Times.)

• Senator SHERMAN, of Ohio, has r:-ported a
from the Committee on Finance, to provide a na-
tional currency of coin notes, and to equalise the dis-
tribution of circulating notes. This bill proposes the
addition of $45,000,000 in notes to the $300,000,000
before au:herised, apportioning their circulation
upon the census of 1870. The Secretary of the Trea-
sury is, however, directel to redeem and retire an
equal amount of the temporary Three per Cent.
Loan Certificates. The third section provides for
the issue through associations depositing United
States gold-bearing bonds, of notes equal to 90 per
centum of the gold value of the bonds, but not ex-
ceeding 80 per cent of their par value, the notes
bearing on their face the promise of the association
to redeem them in coin when presented at its office ;
every national banking associatio❑ to keep coin on
hand equal at least to one quarter its circulation.
There are provisions besides for the reception at par
of these gold notesamong other banking institutions,
and freeing all those organised to issue such notes
from the clause of the National Currency Act which
limits the circulation of National Banking %ssocia-

tions to $300,000,000. The tendency of this bill
is to increase the National Bank circulation, and
with it the paper money of the United States,
though temporary loan certificates would be retired.
Senator SHERMAN aspires to return to specie pay-
ment and to inflate the currency at one and the
same time ; but as the bill alond is before us without
debate or comment, except that it is approved by
Secretary BOUTWELL, we may mistake its tenour.
To secure public confidence, Mr. SHERMAN pro-
poses that the banking institutions shall deposit in
the Treasury Five-Twenties or other gold-bearing
bonds, on which security the Comptroller will issue
notes like those of the Bank of England, payable
at the office of the bank in gold or silver. To
meet this demand he requires the bank to keep 25
per cent. of its circulation in coin, evidently cal-
culating that the hollers of the notes will not
present them in sufficient quantities to jeopar-
dise the bank, as they will be aware that the
law has enforced the deposit by the bank in
the Treasury, of United States. Bonds more than
sufficient to cover the amount on the face of all its
notes. The bank will gain in being able to cir-
culate in notes, $4 for every $1 it holds in gold ;
and its security held by the Treasury, in which the
other three-fourths of its capital might be invested,
will bear a good rate of interest. Does Senator
SHERMAN propose to establish two orders of banks,
the one specie-paying, the other paper-paying ? If
so, he may be running good against evil, substance
against shadow, a promise to pay something against
a promise to pay nothing, with no one to forecast
the result, as the experiment is novel and without
precedent in finance. On the 12th instant Senator
SUMNER introduced his bill " to authorize the re
funding and consolidation of the National Debt, to
extend banking facilities, and to establish specie
ayments." It consists of nine sections, of which
the three first authorize the Treasury to issue
three classes of Government Bonds, each of
$500,000,000, in denominations of not less than $5O.
The first class to be redeemable in coin after ten
years at the option of the Government, and after
forty payable, bearing 5 per cent. interest in semi-
annual coin dividends. The second to be redeem-
able in fifteen years at the option of the Govern-
ment or payable in fifty, bearing 4,1 per cent. ; and
the third redeeamble after twenty years, or pay-
able in sixty at 4 per cent., all in coin. By the fourth
section these bonds are exempted from all taxation,
by or under National, State, or municipal authority.
The other sections of the bill provide for a new
issue of $200,000,000 in bank notes to replace an
equal amount of greenbacks withdrawn. When
the premium on gold sinks to 5, legal-tenders are to
be receivable for import duties. The bill repeals
all previous Acts making anything but coin a legal
tender in the United States, to take effect from Jan.
1, 1871. The Senator supported his bill by a long
speech. It is his opinion that Mr. BOUTWELL'S
measures will not secure his propositions, which be
thus classifies :
"1. To fund $1,200,000,000 of Six per Cent. Five-
Twenty Bond. into Four and a Half per Cent. Fifteen-
Twenties, Twenty-Twenty-Fives, and T wouty_Fore-
Thirties.

"2. To make our exports equal in value with our im-
ports, and to restore our commercial marine.
"3. To do these before any attempt to reduce taxation cr
to resume specie payments." ,

There not sufficient inducement, Mr. SUMNER

thinks, for the bolder of a Five-Twenty Bond to
exchange 6 for CI per cent. It woull be one-
rous and objectionable to make the interest payable
at various points in Europe. Foreign Powers might
obtain a certain jurisdiction over American monetary
transactions, while the arrangement would help to
postpone the time when New York will b:come
that commercial centre designed by PROVIDENCE,
and confirmed by man." Does Mr. SUMNER ima-
gine that a foreigner would prefer his proposed
bond at 4 per cent. with interest payable in New
York, to Mr. BOUTWELL'S 4i per cent. with intere t
payable in the city wherein he resides, and does he
suppose something unpalatable becomes more attrac-
tive by being made longer in duration ? If Secre-
tary BOUTWELL'S Bond has not sufficient attraction
to draw coin, as well as the exchange of Five-
Twenties Bonds, as Mr. SUMNER asserts, then assur-
edly his has not. We have no space to go over his
road to specie payment. Although the Senator
says that the more he has considered the provi-
sions of his bill (which, indeed, embodies one he
before introduced for the withdrawal of greenbacks)
the more he is satisfied of their value, yet we
doubt both the efficacy and simplicity he ascribes to
them. Where he mainly differs from Mr. BOUT-
WELL is in recommending that the Debt should be
left for redemption hereafter, and taxes reduced;
while Mr. BOUTWELL holds that taxes should be
kept up, and the Debt reduced. Finance Bills are
crowding on Congress, and the members will end
by getting into a financial muddle.

SAN DOMINGO.

A letter has appeared in the New York Tribune,
from the pen of what it calls a respectable gentle-
man in London, having reference to the annexation
of San Domingo to the United States, and the loan
contracted for by Messrs. Peter Lawson and,Co.
The property, he says, of Sausana Bay and peninsula
has been used by President Baez, and unscrupulous
parties in the United States, to " swindle" the
Washington Government, as well as to induce
English capitalists to invest for the benefit of the
triangular ring of Baez, Lawson, and Co., and
Hartmont. the
the
loan, although
asserts that the public
has not taken up h
Stock Exchange although the laws of the
compelled it to recognize the
amount privately subscribed by the firm and three
or four of its friends. The writer produces facts
to show the discredit in which the loan is
held on the Stock Exchange. Then follows a full
account of Edmund Hertzberg, a most instructive
history if true, of which one of the little events is
that he began business in London as a merchant,
was imprisoned for two months in Whitecross-
street, and was made bankrupt for £240,000,
whereof he never paid a cent of dividend. The par-
ticulars of his connection with Baez are given,
whose concession of Alta Vela he failed to turn to
profit in London until the loan was concocted.
The gentleman quotes the Boletin Oficial of Santo
Domingo of the 25th September last, as announc-
ing that Mr. Hartmont was to receive £lOO,OOO
commission on the nominal loan of £757,700, " and
as the bank commission of 14- per cent. would make
£18,400, consequently Baez would have to receive :
Loan (real amount), £420.000 ; less as above,
£lB,4oo—total, £301,600; and the Santo Domingo
Exchequer has to repay in twenty-five years, each
year £58,900, or £1,472,500 ; being nearly five
times the amount actually received." This is
what appears to the public, but the gentleman
asserts that a private understanding exists be-
tween Mr. Hartniont and Baez, which we do not
here choose to reproduce. The Mess's. Lawson
can defend themselves against such damaging state-
ments, all our business being t.) call their attention
as well as that of the public to these staitling
charges, the more so as the City Editor of the
Tines has favoured the arrangements. For instance,
last Tuesday the following appeared : —" The Com-
mittee of the Stock Exchange have to-day granted
a quotation for the full amount of the San Domingo
6 per Cent. Loan of £757,700, introduced in July
last, on the certificate of the agents, Messrs. Peter
Lawson and Son, that the balance of the bonds not
originally allotted are now placed. It is understood
that these bonds have been taken up by a body of
capitalists, who are probably influenced by the
treaty now being negotiated with the United States