The Sun.
London, England, 1868-08-03 00:00:00

THE FUNDING BILL OF CONGRESS.

The telegram from Washington of Monday
evening leads us to suppose that Congress has
so far passed the Senate's Funding Bill as to
provide for the issue of Thirty and Forty-Year
Bonds, redeemable in coin and free from taxation.
They are to bear interestat the rate of 4} per
cent. and 4per cent. respectively, and are to equal
in amount the total of the Five-Twenty Bonds,
and to be employed in their redemption. A Bill
introduced into the HOUSr: proposed a uniform 40-
year Bond, with interest at 3 65-100 per cent:,
exempt from taxation, the conversion into 5-20's
to be optional, We suppose that a conference
took place between the Chambers, and the main
features of the Senate's Bill were preserved. The
puzzle.is what the measure is intended to accom-
plish, as there appears to be no sufficient inducement
for holders to change Six per Cent. Bonds into Four
per Cent. Bonds? We suppose that Congress in-
tends to checkmate, as far as possible, the agita'ion
against the Bondholders pending the Fall election,

while it leaves them practically in the same position.
That our readers may judge of the above telegram
for themselves, we give the bill as it passed the
Senate :

Be it enacted, &c., that the Secretary of the Treasury is
hereby authorized to issue coupon or registered bonds of
the United States, in such form and of such denomina-
tions as ho may prescribe, redeemable in coin, at the plea-
sure of the United States, after twenty, thirty, and forty
years, respectively, and bearing the following rates of
yearly interest payable semi-annually in coin ; that is to
say, the issue of bonds falling due in twenty years shall
bear interest at five per cent.; bonds falling due in thirty
years shall bear interest at 4 per cent., while said bonds
shall be exempt from taxation in anytionn or under any
State, municipal or local authority, and the same and the
interest thereon and the income therefrom shall bo exempt
from the payment of all taxes or duties to the United States
other than such income tax as may be assessed upon other
incomes. And the said bonds and the proceeds thereof
shall be exclusively used for the redemption or payment at
the option of the holder or purchaser of or exchanged for
an equal amount of the present interest-bearing debt of
the United State; other than the existing five per centum
bonds and the three per contum cartificatas, and may bo
issued to an amount in the aggregate sufficient to cover
Vas principle of all outstanding ar existing obligationa, as
limited herein, and no more. But not to exceed seven
hundred millions of dollars shall be of the issue redeem-
able in twenty years.
Sec. 2. And be it further enacted, That there is hereby
appropriated out of the duties derived from imported
goods 9135,000,000 annually, which sum during each fiscal
year shall be applied to the payment of the interest and to
the reduction of the principal of the public debt in such a
manner as may bo determined by the Secretary of the
Treasury or as Congress may hereafter direct, and such
reduction shall be in lieu of the sinking fund contemplated
by the fifth section of the act, entitled "An Act to authorize
the Issue of United States Notes, and for the Redemption
or Funding thereof, and for Funding the Floating Debt of
the United States," approved February 25, 1862.
Sec. 3. And be it further enacted, That any contract
hereafter made, payable specifically in coin, shall be legal
and valid, and may be enforced according to its terms, any-
thing in the several acts relating to the United States notes

to the contrary notwithstanding, provided that this sec-
tion shall not apply to contracts for the borrowing of cur-
rency or the renewal or extension of any indebtedness
under a contract already entered into, unless such contract
originally required payment in coin.

Sec. 4. And be it further enacted, That from and after
the passage of this act no percentage, deduction, commis-
sion, or compensation of any amount or kind shall be
allowed to any person for the sale or negotiation of any bonds
or securities of the United States disposed of at the Trea-
sury Department or elsewhere on account of the United
Status; and all acts or parts of acts authorizing or permit-
ting, by construction or otherwise, the Secretary of the
Treasury to appoint any agent other than some proper offi-
cer of his department, to make such sale or negotiation of
bonds and securities are hereby repealed.
This was SHERMAN'S Bill, which, as first intro-
duced, Mr. SWINER pronounced to be Repudia-
tion. Although we use that term with regard
to the proposals calculated to infringe the
spirit of the contract against the bondholders,
it is scarcely applicable to any of the mea-
sures suggested ; for it should be borne in mind
that all, except the bill introduced into the
House to tax the interest ten per cent., have de-
sired to observe the exact letter of the law.
Nearly all the Senators of the Western States
argued in favour of greenback redemption, while
those of the Eastern have gone unanimously for
coin, and the three days discussion which preceded
its passage through the Chamber was chiefly
directed to that subject, and a; there was no
obvious reason, it shows how wholly men's
minds are influenced by the mere position of the
hour. When these debts were contracted nobody
anticipated that they could be paid in anything
but coin, and now many anticipate that thirty and
forty years hence, they cannot be paid in any-
thing but paper, yet the greenback then in ly
only be preserved in museums as a curiosity.
There is a letter from " An experienced American
Jurist" in the 7 lines of last Tuesday on the subject
of these securities. He regards the question of
payment as purely legal, and the contract being in
writing it must hinge on the interpretation ; nor
do any party or class in the United States seek
anything more or less than the legal fulfilment of
the stipulation. He considers that it might as well

be argued that repud'ation was threatened if a man
declined to pay more or in a different currerwy
from that stated in the contract. But this does
not put the question fairly, for no one in the
country when the contract was made held money
to be anything but coin, and they took the prof-
fered Bonds in this belief. A sovereign power
may declare anything to be money within its terri-
tory, and the United States c)uld scarcely get a
cheaper material than small bits of paper. These
the Washington Government decreeing to be money
circulated as currency, and the experienced jurist
considers that unless expressly stipulated to the
contrary, the bondholders can legally be paid in
them. The City editor says that " the letter seeks
to place these various questions on the only base
that can be practically recognized, namely, the
precise phraseology of the Acts of Congress
under which the several loans were created. The
declarations of the Secretaries of the Treasury, of
the Government banker, of the Legislators, were
mere matters of sentiment, which could not bind in
the slightest degree either the Legislature or the
Courts of the country in their interpretation of the
written law." But it is not to the courts of the
country that the bondholders appeal. When the
Hon. THAD. STEVENS wrote his celebrated letter
on this question, which has done so much to damage
his reputation, he cited a simple case by which we
may illustrate our view. A friend of his borrowed
from a gentleman a sum of money, the stipulation
being that it should be repaid in gold. The
lender, after the lapse of a certain period, de-
manded the fulfilment of the stipulation, and
Mr. STEVENS'S friend, gold being then over
200, offered the amount in paper. Of course
this was rejected, but on appeal to the Courts for
enforcement of the contract the lender discovered
he was at the mercy of the borrower, greenbacks
being the legal tender for gold as for everything
else not expressly exempted by law. Had Mr.
STEVENS'S friend been an honest man, he would
have observed the stipulation of his contract, what-
ever construction might have been put upon it by
the law, and we have little doubt that the credit of
THAD.'S friend after that transaction was at a low
ebb. If the public creditor appealed to the law,
notwithstanding the assertions of the Government
agents, notwithstanding the open and uncontra-
dicted statements which brought the money in, the
Court would interpret the written contract by the
written law, and no one would blame the judges
for so doing, however greatly their ruling might
damage the credit of the United States. But there
is another side to the subject, which doubtless
TII.A.D. STEVENS'S friend has realized long since.
There are moral questions, and those of political
economy which are of infinitely greater importance.
The United States is a sovereign power, and may enact
anything the majority of the people choose within
its territory ; but the tribunal is the world, and the
punishment that, no nation has failed to receive which
outraged such obligations. Jesuits might argue to the
Impeachment Trial length, but the subject is in a nut-
shell, and will so remain. The money was lent on
the honour and good faith of the United States,
few of the lenders either knew or cared about
the legal terms, but they understood what their
Representatives said, what was publicly announced
by the successive Secretaries of the Treasury, and
by the agent who floated the loans. If the
Government repudiated these and appealed to the
strict letter of thelaw, it would stand convicted of
being a party to a fraud by which it largely
benefited, in all minds whether justly so or not,
and it is this consideration that would preven6
the Government from availingi tself of the oversight
in the contract, unless driven by an overwhelming
pressure. We can only hope that the Funding
Bill, as passed by Congress, will be acceptable
to the bondholders, and settle for the present this
vexed question.—Anglo-American Times.