, 1870-02-05
SENATOR sHERMAN's FuEpIFG R1LL

>A0 sAAsA316 MAI AoFo1+EA Uy LII. on8T-
man from the Senate FINANCE Committee
proposes to authorize the issue of four hun
dfed millions Of bonds bearing interest at 5
per cent, rcdeemaole in ten and payable in
twenty 5ears, which may be sold at not less
than par in coin, OF exchanged ut par fo.
any Of the 6 per cent bonds now out,tand-
ing, also, four hundred millions bearing
interest at per cent, redemable in fiftoep
and payable in thirty years, which may be
sold at par in coin, or exchanged at ia.
for any outstanding bonds BEARING higher
rate Of interest; also, four hundred mi1l,ous,
or any other sum not exceeding the existing
amount Of the public debt, redeemable in
twenty and payable in forty years, bearing
interest at per cent, on The same terms
and conditions, except that these last may
be sold for United States notes, at tho dis.
c1eiion Of the Secretary Of the Treasury.
We suppose TINT the projectors of the
funding scheme will continue to believe
that it is practicable to sell Dor cont
bond at par in market where /; pe1
cent bond brings only 90, until they Try the
experiment. Believing this, there is no
reason why they should not believe
that similar feat Of legerdemain
may be accomplished With Il per cent
bond, and also With 1 per cent bond.
There is no objection, indeed, Ia their try
ing tha experiment, but we do object most
strennously to the sixth section Of tho bill.
which authorizes tho Secretary Of the Treas
u1y to spend f.ee9ee millions Of dollars in
gold IN endearoring to accomplish this
illogical and impossible task. II the fund
ing scheme possessea the virtues claimed
for 1t let it be put tn motion; but do not
throw good money after bad, in an affo1t
to nake water run up hill.
We can conceive that the National Banks
may be forced to put up the new bonds in
place OF the old as security for their circu-
lating notee, but they cannot be compelled
to exchange at par bonds worth 90 for other
bonds worth G9. The most that the GOV
eminent can do is to hand their old bonds
back to them, or call in their circulating
notes and redeem them. It is not likely that
the banls will pay 100 cents for bond worth
60, even under the threat of losing their
circulation. Congress may succeed in
producing contraction Of the currency to
the amouut Of $500, 600, 900, but no Law
TINT it can pass will be effectuAl to compel
business men to buy I! per cent bond at
higher rate than per cent bond is
worth, even with the privilege Of banking
attached to it.
The last section of the bill authorizes the
creation Of my additional number Of Ma
tionol Banks, and the removal Of all 70
strictions upon National Bank currency con-
ditioned upon the retirement and cancella-
ton Of an equivalent amount Of United
Suites notes, or grecnbacks. Unfortunate
", such new banks, in nddition to other OBJ
stacles in their way, aro required to bug
1 per cent bond worth say 5s) at par, md
deposit it as security for their circu-
ln.ion. But for this rest.ictiou,-"this
fundamental error" as tho Cologne
Zi'ung says, (Which runs Ike a red
thread through the whole Bout veil scheme,"
the proposed removal Of the restriction on
the National Bank currency would be an
important step toward specie resumption.
But, when coupled with An attempt to get
for nothing, it will prove only
mockery to all who are concerned in folst-
ing it upon the legislation Of the country.