Fayette County herald. [volume] (Washington [Washington Court House], Fayette County, O. [Ohio]) 1860-1???, 1870-06-16

! tlonS OF this Dill, ana ii INC rasulU
is to break down the prices of all
the government bonds now issued,
then the difference Of interest will
be so much in favor Of the cGiSt-
ing bonds, that no general funding
could be done under this bill, but
any course taken to carry the price
of bonds up, would in the same
ratio Of increase facilitate the fund
ing into lower priced bonds.
For example: There are about
eight hundred million six per cent.
bonds out, bearing six per cent.
interest, payable in two, three, elev-
en- and thirty years, and on a coin
basis, no party holding any ofthese
bonds can sell, and with the pro
ceods invest in the Rve per cent.
Dev bonds, without he gets one
hundred and fourteen for his exist
ing bond, allowing the new bond
to be free from income tax, and
the old bond subject to it, To in
vest equally well and get the same
income on the new four-and ahali
per cent. bond, he must sell his
present bonds for one hundred and
twenty-seyen, and to invest equal.
ly in the four per cent bond, he
must get for his old bond one hun
dred and forty-two,
MIR. Chairman let us allude to a
state Of things thar might exist, in
cese the bill before you should
pass, and many banks in different
parts of the country should give
notice OF their intention Of winding
up. The act requires legal tenders
to be putt to redeem its circula-
tion, in order to obtain the bonds
| pledged, and then comes on to the
market this large amount of bonde
to be sole. 1t appears to us that
there can be but one result, which
is this it would produce q con
traction of the currency ruinous to
all the business interests of the
country, and would necessarily last
for a long time, and it would so re-
duce the price of all government
securities that the funding scheme
would prove an utter failure, and
prevent the formation ofnew banks,
so much desired by the South and
West.
Again, under the seventh section,
suppose the banks put up one hun
dred million legal tenders, to Sc
cure their circulation, Withdraw
their bonds and Proceed to liqui-
date, what can the Secretary do
with these legal tenders? | submit
nothing, unless the bond market
is broken down, so that he can pur-
chase some kind Of existing bonds
Mt par, because the act says, "there
shall be no increase in the aggre-
gate debt of the United States"
under this act, and whatever pre-
MUM he pays, in exchanging legal
tenders for bonds, increases the
public debt just the amount Of such
premium. Then which is he to do,t
lold the legal tenders in the Treas
lry, which would be contraction
with vengeance, chat would fail
every buseness man interested in
and having accommoda-
tions from banks, or is he to break
the bond market down, to enable
him to buy at parY
| do not know what the eighth
section means it is certainly liable
TO two constructions, and if the
shall be put upon it by
the Comptroller of the Currency,
that all ertstiag 6anhs, as well as
all new banks, shall have but eighty
per cont or circulation on the
amount Of bonds put up, then there
is another contraction of tie loans
of the banks to enable them to in
crease the amount Of their bonds
ten per cent, which will amount to
fifteen or twenty million.
! have studied this bill day and |
night, and allow me to say that in
its effects on the business interests
of the whole country, it is the most
of any bill have ey-
er examined on its passage in this
capitol
Now if this state ofthings is like
ly to exist, and there appears to us
to he no doubt about it, namely, |
violcnt and continued contraction
Of the currency, great reduction in
the prices of all United States Sc
curities, and what must follow, q
arrangement and stagna
ton Of business, in such state of
things, can any funding process be
successful We think not, But
ia Funding bill is passed, reliev-
ing the banks Of the objections
named, so that the present system
can continue undisturbed, with abil |
ity under the laws to make fair div
to stockholders, thon we
think the experiment would have a
fair trial, and the banks would be
The first to endeavor to accomplish
that object,
Let me repeat my points; First,
II this bill passes as it is, the banks
live under it, and would
their charters, either to
wind up or to organize in some
other way, which would greatly |
disturb the money market, create a
business panic, and injure the fund
ing process, besides driving this
capital where it would be uatd1ed
Secondly, Ifthe tax on circulotion
aud donosita 10 taken off nnd the |