The Democratic press. [volume] (Ravenna, O. [Ohio]) 1868-1901, 1871-09-21
MI. BoutwelI.s violation of the Law.

Mr.. BoutwelI's violation of the Law.
1t has become SO common for the
officials of the present Administration
following the example of their chief,
to disregard the laws, that one instance
more or less of illegal action on their
part seems hardly worth noticing
When, however, q gentleman of Sec
retary BoutWelfs past reputation, sue
cumbing to the. spirit OF demorallza-
ton that surrounds him, palpably
violates statute passed at his own
solicitation, and drawn, it may be
supposed, just as he wanted 1t drawn,
the case is pretty serious one.
The Funding Act of July Ia. 1870,
as amended last January, embodies, 1t
is well known, Mr.. Boutwell's pet
scheme for reducing the rate of inter-
est on the national debt. Its first sec
ton authorizes the issue of $500, 0,0OO,-
600 of bonds bearing five per cent.
interest per annum, $500, ,0O0, 600 bear
ing AZ per cent. interest, and $780,
000, ,O0O bearing four per cent. interest.
The second section then enacts:
- The Secretary OF the Treasury is hereby au-
thorized to sell and dispose OF any of the bonds
issued under this act at not less than their par
zdtUe FOR coiat and to apply the proceeds thereof
70 the redemption OF any OF the bonds OF the
twenty bonds, at their par value; or he may es-
change the same for sEch JSre-t.oeRty bonds par
for par, but the bonds hereby authorized shall
be Used for no other purposes Whatever; and a
sum not eeceedsna osse-hGkfof oaee per ceAfaae,
OF the bonds hereby approprla. ed to pay tne eS<
the same.''
In respect to the first $70,000,000 of
the $500, 600, 600 five per cent. bonds
authorized by the act, the Secretary
observed the limitation of expense
fixed, and sold them at par in gold,
allowing one-haIf of one per cent. on
the amount to his agents for their
commissions and the cost of adver-
tising. To dispose of these few bonds
occupied, however, nearly five months
time, and the prospect for further
sales looked very unpromising. Then
the Secretary resolved to at least get
rid of enough more to make up $780,
100000 of five per cents, cost what it
might. The AZ and 4 per cents were
evidently hopeless job; but the fail
ure, he thought, would be somewhat
covered up by the success of the five
per cents. Consequently he sent an
agent to Europe, and there. by the
offer of extraordinary compensation,
he indnced clique, or syndicate, as
the phrase is, of stockholders to take
a portion of the remaining $130.000, 600
of the 100000, 900 offered, while an
other portion he coaxed and threaten
ed the national banks of this country
into accepting. But 10 accomplish
this result he has practically enlarged
the cost of the transaction from the
irar nna-ha1f of
to1nearly two per cent. and has thus
expended, instead of $3.50, 600 allowed
by law, $2,600,000-Qr all excess of
nearly $2,OOO,O0O.
"a The method by which the expendi-
ture of 100000 has been attempted
to be covered is. ingenious, but inef-
fectual. The act, it will be observed,
requires that the bonds be ID sold at
par in gold, or (2) exchanged at par
for five twenties. The Secretary has
apparently done both of these things,
but in reality he has done neither
Nominally he has sold some of his.
bonds at par, and is going to exchange
others for five-twenties at par. In
reality he has sold some at SO in gold,
and is to exchange others for FIVE
twenties at discount of 2 per cent
He has done this by accepting SUBJ
scriptions for the new bonds from
present holders of fve-twenties, and
then agreeing:to allow them to draw
both interest on these bonds and in
terest on the five-twenties for the
space of three months, in addition to
a commission of one and one-half per
cent, and this added to the one half
per cent. makes the two per cent.
which it has really cost the Secretary
to market the $130,000,000 of his five
Fer cent. bonds.
1t remains to be seen whether the
orators and writers
will glorify this transaction as tri-
umph of financial skill. It would not
be surprising if they did. Men who
can support the President in his ille-
gal use of the navy in San Domingo,
in his retention of military officers
about his person to civil capacities, in
his appointment of collectors of in
ternal revenue for districts in which
they do not reside as the law requires,
in his repetition of the census of New
York and Philadelphia, and in his
of the national troops
for the furtherance of his private po-
litical schemes, will not be likely to
finch when SO small a thing as the
expenditure of $2,000,000 is in ques-
York Sun.
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