The Madisonian. [volume] (Washington City [i.e. Washington, D.C.]) 1837-1845, 1839-01-19

though the price was agreed and calculated as for
eGh ihefe was 70 inns, downright, violation Of iar,
which Is not 10 be excused by the alleged necesse, OF
the Treasury, or by any other conside ration
Let us see what was the nature Of the arrange
made by the Secretary Of the Treasury for anti
cipsiing in part the payment Of the bond Of 1889 :
This bond became doe on the 5Olh September, 1888,
and was for about &, 800 900, principal and nteres,
BY letter from Mr.. Woodbury. dated the lllh Au
gust, 49, aud one from the President Of the Bank Mr.
Bdde, dated the 18th August, '3s, (but lutte than
sx weeks before the bond came TO Maturity ar.
rsngemen is defntyely concluded between them for dis
charging that bond as foows-by an instsment Of
100000 10 be carried 10 the credit Of the Treasurer
onthe 18th August 3SaBother lnstslmeDt OF $500 900
10 be, IN Ike manner carried the credit OF the Tea
surer on the 18th SEPTEMBER, and balance Of $685.
zo TO be placed to his credit the 18th October, 3s
These sums were to be paid out from time 10 time
the Secretary Of the Treasury informs US on drafts
TO the public creditors and sit was further stipulated
that interest should each of the nsslmants on
the day they placed 10 the credit of The Treasurer
and made subject to his draft" Now. here was debt
TO the United States bearing interest and the Secretary
Of the Treasury enters into arrangement for stop
ping interest it, before il is paid The ins,slments
10 be carried TO the credit of the Treasurer on the
books Of the Bank, the 18th August, 18th Septem-
ber and 18th October respectively not then actually
paid They remain on deposite in Bank, to be drawn
out, from time to tme by drafts in favor Of the public
creditors Interest, them should have upon Them
ill they were paid or at least till drafts were drawn
upon them. Ia Transactions between individuals where
debt, bearing interest is discharged by partial pay
mens from time 10 time, is the nvariable usage
charge the interest down the period Of each separate
payment; and in these very negotiations with tho
Bank Of the United States, if look back propo-
silion which was made early April '3S, by the
Bank to anticipate the payment Of this bond by advance
ing money the checks OF the government its Off
GERS we shall find that the Bank ITSELF did not ask that
the interest upon the bond should be stopped but from
the date OF each check" or draft MIR. Woodbury.,
however his beralty oustrps even the demanes OF
the Pank, and proposes and concludes nm arrange
men Cor stopping interest upon large portions Of this
bond, only before the Government draws upon Them
but from he they carried to the credit OF
the Treasurer the books Of the Bank though that was
done with the explicit understanding that the sums Gre
dted were not TO be drawn out and paid till sometime
afterwards. | should like to know, Mr. President
what right the Secretary Of the Treasury has 10 stop
interest public debt bearing interest," not only be-
fore it is paid, but before it is drawn upon.
But, will go farther, and ask what sound
could there nave been, only reeks before s bond
came maturity, enter into any arrangement for
tcipating its payment either in whole part, Had
not the Secretary Of the Treasury just put himself in
funds by the sale Of the third bond Of the Bank II is,
moreover, shown by statements before me, that
the very time of this transaction, he could, under the
law of the last session. have issued Treasury notes.
If wanted for the of the Government the
Of at least millions Of dollars There could them
have been fiscal necessity TO justify this arrangement
terms and in the mean time, the power TO issue Trca
sury notes, to the amount Of two millions of dollars
must have been adequate to meet every contingency in
the financial affairs Of the Government In point of
fact, the Treasury full, and that too, without
any resort 10 this resduay power of issuing Treasury
notes. that the Goth Of October the Secretary issued
official notice that all the outstanding Treasury
issued previous the 2lst May 1888, would then
be paid presentation TO the Treasury, Advance Of
ne period al which they fall due" This was, indeed,
brilliant operation Of finance, and fair specimen OF the
ability which has presided your Treasury, Mr..
President for some years past-Bonowing money, in
effect at per cent (for that the interest borne by
the bonds Of the Bank to redeem Treasury notes. be-
lore they were DUE which BORE respectively interest
OF one null per cent, per cent, and fue per cent,
these being the several rates of interest the first
issue OF Treasury notes, proposed to be redeemed by
the Secretary
The Secretary of the Treasury being sensible that
this grautous arrangement with the Bank anti
cpation in part, Of the payment of second bond,
only SIX weeks before it would reach maturity stood in
need of Justification has attempted very strange
and unsatisfactory apology for it, He says he ap-
Prehcnspc that, unless he made the arrangement in
question: the Bank would pay its bonds falling due the
3Oh September, 1885, sin new Treasury notes, not
re-issuable available, in any way to discharge APP
preparations" Now what possible ground could there
have been for any such apprehension These new
Treasury notes all bear interest of per cent and
extensively taken up by capitalists throughout the
country, the best they could make Of their
dsposabe funds. have o statement from the Trea-
sury now before me, showing that of the whole
of IS, 700 900 of Treasury which have been
issued S3,4S0 900 actually exchanged for specie
Prime, Ward & King, of New York, took about million
and half Of these Treasury notes and paid for them
in specie The Bank Of America, New York took about
million, paying for them in specie The Manhattan
Company bought about three quarters Of million for
specie The ohercapitasts took up other
portions from the Government with specie, making,
cording to the Treasury statement before me, the
aforementioned sun, of SO 100000 in new Treasury
notes actually exchanged by the Government for specie
These facts forming part of the operations Of his
Department, must Of course have been known 10 the
Secretary, and certainly justified no apprehension that
the Bank would have attempted to pay its bond in new
Treasury notes. which it could have acquired only by
paying specie for them, and even then, probably only
premium OF the sum Of somewhat less than two mil
hons OF new Treasury notes, which, appears from the
statement just referred to- were issued to public credi-
tors IN payment OF warrants, by far the larger portion
nearly a) says the document .were RENTED to
the south and west" They were doubtless taken
up there, as they had been the north, rrpest
mcnt or otherwise sought desirable medium OF re-
mttance; and appears from the table Of exchanges
compiled from prices current, which the Secretary has
annexed to his report that the gath of September
1888, week before this bond fell due, Treasury notes.
in the money market Of New Orleans were at a pre-
MUM OF AZ per in the local currency, while spe-
and United States Bank notes both at premium
OF 81 per cent only. How then, again ask, Mr. Pres
dent could there have been the least possible ground
Tor apprehension under circumstances like these, that
the Bank would attempt pay of its bond fslinc due
3Oth OF September 1888, in new Treasury notes And
II 1t had done So the Secretary had have already
shown under the law of the last session. the power
once to issue about two millions Of dollars, ian equva
lent amount,) in other new Treasury notes.
No, sir. This arrangement with the Bank for ac-
coptng. anticipated payments, in part, Of its second
bond but six and two weeks before fell due by its
own limitation, admits Of but one rational explanation.