New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1872-01-23
THE NEW u. 8. LOAN.
SECRETARY BOUTWELL, AND THE SYNDI-
CATE

Ch1
REPORT OF TIE WAYS AND MEANS COMMITTEE
THE sECRETARY's ACTION SUsTAINED-NO
OPINION AS TO ITS ExPEDiENCY.
WASHINGTON, Jan. 22.-The Committee of
Ways and Means 10 whom was referred tho resolution
OF Representative Cox Dec alleging that the Secre
tary OF the Treasury in placing the newly authorized
Eve per cent bonds upon the market, had violated the
law they considered this resolution In the
II il had been adopted by the House, instead Of
simple reference them for consideration Upon their
invitation the Secretary of the Treasury and the
of the resolution both heard by the Committee
in reference TO IT, The statement OF tho Secretary
cOmpanied the report also that OF Mr. Jay Cooke, in
reference TO the subject.
The allegations OF the resolution are, First That the
negotiation increased the bonded debt OF the United
States in defiance OF law Second That the Secretary
has expended than half Of per limited
by law the expenses OF funding said loan The first OF
these allegations IL founded upon the following clause OF
the first section Of the act authorizing the lOan viz
but nothing in this act or in any other law now in
force shall be construed TO authorize any increase what
of the bonded debt Of the United States" The
Committee Of opinion that this provision OF the act
has not been violated by any of the transactions rected
above, which have come 10 their knowledge. The Com
mitee after quoting the fourth section Of the law
say the clause which is alleged has been violated must
be construed in connection with that section,
well with all other parts OF the law, and
the manifest object for which 10 was enacted.
BY the fourth section IA disclosed the whole purpose
authorizing the Of these bonds and they be
issued for other, their proceeds be used for
other purpose than that specified In this section. All
parts OF this construed together and pos
sbe be Tee0nced with each other and with the
design Of the act that IL shall not defeat itself BY
this section appears that the Secretary negotiate
the bonds authorized by this act for the sole purpose OF
redeemng the outstanding Indebtedness of tho
United States, known Five-Twenty bonds;
nd Ia pyur SQC
ton that be may lawfully apply to such purpose
Of redemption such moneysin the treasury OF
the United states may be derived from the sale OF any
Of the bonds the OF which il provided for in this
act. 1t is obvious that, in order TO make this applca
ton, he frst negotiate the bonds. He cannot
up the old bonds with the proceeds Of the ones
unless he first sells the bonds He first sell
the bonds without in the process and while the act
Of and applying the proceeds Is gong on III
first sells in order obtain the proceeds with which TO
by which the provision Of the law can be carried out
without involving such temporary increase of the pub
clause of the law WHICH IT Is alleged the Secretary has
violated in so doing must be so construed as to permit
of the the other requirements of the statute
has exceeded the onehaf Of per cent allowed
~ ,he FUNDING acc tGr az bb6 f 1 oa b
been thus far negotiated made by the Secretary OF The
5t us atrr dednltn from the agceSate ann which one
haf per cent OF the loan would amount to- all the
penses thus far attending negotiation,
ton o il which had been paid the National banks and
other agencies for such negotiation Of It rs they
had been able TO make the balance OF sald one
hall per cent and no more was 10y the ARRANGEMENT
with Jay Cooke & Co raid to those parties who took the
balance Of the loan II t1is statement is correct and the
Committee reason TO douDt IT, then 1t If apparent
that the limitation OF Onehalf OF one per cent has not
hv ,iI act but port - the aareemen 5v
which the balance OF the loan taken III substance
this: That the banks winch took this loan for them
selves whom they negotiated IT, to he
de
proceeds Of the bonds thus taken deposit with
ton of an equal amount OF FveTwenty bonds, for which
they would not be required in 90 days.
by the banks for the Of the money during
the time which must necessarily elapse between the
OF the old bond with that com in no fair interpreted
ton of the funding accounts be counted az part Of the
expense which limited by that act TO one half per
OF the loan II Is given TO such banks by the law
that makes them repositories and not by the contract Of
II the Secretary had received into the Treasury and
locked up In Its vaults large amount OF coin derived
from the sale of these bonds would have resulted IN dis
aStrous consequences 10 the commercial world Nothing
by the Of the money IN the meantime, for tho Jaw
prohibited its by the Secretary for any other pur
poses while II authorized MIN TO leave II deposit with
these banks upon the conditions stated IL such deposit
of any advantage TO the bank resulted from the
provisions the law, and cannot be said TO be Illegal
The National Banking law authorized him 10 leave II on
deposit The law authorized hm to make such regula
lie made the regulations which have been stated and for
The Committee say, at the conclusion OF their report
Of which the above Is mere synopsis; In the opinion
Of the Committee he not only authorized 80 TO do by
law but these deposits necessary II he would carry
the provisions OF the Funding act In manner that
disturb the money market aud the business
the country In thus usng the banks he has followed
precedent OF his predecessors who have made Of
them in eectng all or tue loans authorized by the Gov
ernment their establishment aud II is worthy Ut
is the first loan effected by the United
states less cost than one per cent, The Committee
have confined themselves to consideration OF the an
thor in law for the Of the Secretary thus far In
eneciing the loan. The wisdom Of these measures may
safely be left TO the public Judgment upon the result
They therefore, recommend the adoption Of the follow
ing resolution:
ssolt,d That in OPINION Secretary Of the
the Jly
bonded Gebi incurred expenditure
law
1t Is understood that Representatives Beck and Kerr
dissent from the report.