National Republican. (Washington City (D.C.)) 1872-1888, 1874-12-08

~ NEW 3-65 BoNDs.
ID Section of the act OF Congress, approves
IN June 20, 1874, reads as follows:
m "Sec. I. That the sinking fund commissioners o
said District are hereby continued; and 1t shall
be the duty Of said sinking fund commissioners T.
y pared, in sums Of fifty and five hundred dollars
u bearing date August first, eighteen hundred AM
bearing interest a the rate Of three and si4ty
hEe hundredths per eentum per annum, payable
RI semtannualy, to be signed by the secretary anC
~ treasurer OF said sinking fund commissioners anC
- eOuntersgned by the comptroller of said District
and sealed as the board may direct; which bond!
re or municipal authority engraved and printed AZ
h the expense Of the District of Columbia, and fl
4, form not inconsistent herewith. And the faith
z OF the United States is hereby pledged that the
United States will, by proper proportional appro
Priations contemplated In this act, and by caus
i district such taxes as will lido sol provide the
: revenues necessary to pay the interest on said
bonds as the same may become due and payable,
b, and create sinking fund for the payment of the
y principal thereof at maturity. Said bonds shall
be numbered consecutively, and registered in the
4 office Of the comptroller of said District, and
shall also be registered in the office of the Regis
4 ter OF the Treasury Of the United States, for
i which lastnamed registration the Secretary Of
: the Treasury shall make such provision may
: be necessary. And said commissioners shall use
all necessary means for the prevention Of any un-
authorized or fraudulent issue of any of such
bonds, and the said sinking fund commissioners
: are hereby authorized to exchange said bonds at
par for like sums Of any class Of indebtedness in
|
sewer taxes or assessments paid, evidenced by
certificates Of the auditing board provided for in
this act"
1t will be observed that the language of the
act as It finally passed is rendered Somewhat OBJ
seure by the omission Of the words ''do So" where
they appear in brackets. These words are stated
by the committee, in its report of June 20, 1874
to be in the law as it passed, but seem to have
been unaccountably omitted from the act as en-
crossed. The defect in the wording of the law,
and the absence OF such an express and explicit
guarantee by Congress as would satisfy counsel
MI Cd has ,kaAF hn,A
from being taken as an investment by various
financial institutions in the larger cities and be-
ing i, thus dependent upon the local market for
than was anticipated when the act was under con-
stderation. In preparing the bonds the commits
! sioners have adhered to the language Of the act
! as approved, but would suggest that Congress
take the proper steps to correct its phraseology.
Inc bonds were prepared In accordance with law,
/ Of October. Previously we had submitted to the
President certain questions concerning the bonds,
| which were referred to the Attorney General
and are by him answered in the following COM
municatiOn:
LETTER OF THE ATTORNEY GENERAL.
DEPARTMENT OF JUSTICE |
WAS HINGTON. August II, 1874. |
Tie President:
sidered the question submitted by the sinking |
fund commissioners of the District Of Colum bia in
mo, which, with the brief mentioned therein, you
were pleased to refer to me on the 9th ultimO in
accordance with their request.
Those questions relate to the bonds which by
the seventh section of the act Of June 90 1874 It
is made the duty of the Sinking Fund Commits
sion Of the District to cause to be prepared, and
which they are authorized to exchange at par for
like sums of certain indebtedness of the District
referred to in that sections and the point to
bonds are intended by the statute to be payable
in coin, or in lawful money of the United States
In the first place 1t is to be observed that the
statute of itself contains specific directions on
that point. 1t requires the Commissioners to
cause bonds of the District Of Columbia 'tO be
prepared in sums OF fifty and five hundred dol
lars, bearing date August l, 1874 payable fifty
years after date, bearing interest at the rate Of
three and sixty-five hundredths per cent. per
annum, payable semi-annualy,r etc
Here, it is plain, no authority is conferred upon
the Commissioners, either directly or in
directly, to.make the principal and interest of the
bonds payable in coin, by expressing their face
that the principal and interest thereoTw be paid
in coin; and in the absence OF such authority
conceive that it is not competent to them in pre-
pairing the bonds, to ma Ike them so payable.
Even the case of United States bonds it is we'll ]
known that the practice of the Government
when issuing them, has been not to express upon
their face that the principal and interest thereof
will be paid in coin, unless the law authorizing
their issue in positive terms provides that they
shall be thus paid. On the other hand, the Com
missiOners are not compelled to make in q cor
responding manner the principal and interest of I
the bonds payable In lawful money or currency.
IN my opinion, their duty to the preparation of
the bonds will be discharged in entire conformity
with the requirements OF the law by making them
payable in dollars simply, without introducing
any qualification threin respecting the Kind Of S
money in which they are to be paid.
. Surprising the bonds to be prepared without
my such qualification, the inquiry now presents S
itself as to the intention of the statute in regard
10 the payment of the principal and interest
hereof. So far as that intention may be gathered
rom the language of the law ITSELF the scope and
purpose of the provision authorizing the issue of
he bonds and the peculiar facts and circumstances
lpOn which the action of Congress in the premise -
vas based, the only reasonable conclusion that u
AN be deduced therefrOm appears to my mind,
q RI of hn hfnnf 70 hn
his: that such payment is not intended by the (,
tatuto to be made solely and exclusively in CON-
nut, the contrary that it is thereby intended to
)e made in whatever now constitutes or shall at L
he time constitute lawful money Of the United c
states.
Congress has pledged the faith of the United 8,
States to provide the revenue necessary for the .
payment of both the principal and interest of
bonds by making proportional appropriations
is contemplated in the act, and by caus-
ng taxes 10 be levied on the property OF
the District for that purpose The proportional
appropriations so to be made, and the taxes SO q
10 be levied, were PROFESSIONALLY meant to be o
paid in such money as the Government ordinarily
tsburses in discharge of its indebtedness, and as
It ordinarily receives in payment OF its internal
taxes; and tie provision Just referred to may, l
think, be looked upon as indicating the charac-
ter or kind Of money in which Congress contem- /.
plated the principal and interest of the bonds to
be paid. The views on this subject, presented in
the brief which accompanied the communication
Of the Commissioners, are in the main founded on
supposed connection or identity, as to subject
matter, between the various acts of Congress
heretofore passed providing for the issue Of or p
relating to, the securities or bonds Of the United
States, and the aforementioned act authorizing
he issue of "bOnds Of the District of Columbia" "
But it is very manifest that these acts cannot
With proprety, be regarded in Pari mGteriG;
Ind hence it would seem that the provisions OF
he former acts, and the reasons for the interpre-
alton given thereto touching the payment of the
principal and interest of the bonds to which they
efer, are not adducible in explanation of the ,
after act and cannot be legitimately invoked u
or the purpose Of determining its meaning with St
aspect to the payment of the principal and in Z
crest of the lands therein named.
l am, sir, with great respect, your Obedent \,
GEORGE W. WILLIAMS,
Attorney General. .
The first coupon falling due LIST of February a
49, VIC would here suggest that If the interest In
question could be made gold interest the price of
he bonds and, therefore, the credit of the Dis -
riot of Columbia would be thereby considerably U
nhanced, probably at least 10 per cent, the ad-
itional charge for premium on the gold would
hundred dollars; thus, for a period of say four
'ears, within which time it is probable specie s.
payment will be attained, would amount to but
'l.46 per hundred dollars, but the premium
nay be reduced in that time it will amount to a
smaller sum; this would make a
sain to the community receiving the bonds Of
1854 each hundred dollars, far the bonds e.
we're paid out to our own citizens and probably N
esult in permanently placing large proportion
If the loan abroad, where the long period the
ponds have to run would be a desirable feature T
md the low rate of interest less Objectionable
han at home. "
The amount of auditors certificates so far con-
Terted is s., 0SS 1878. v
Many claimants have abstained from convert p
ng the certificates of the board of audit under Il
he impression that they bear interest and con-
titute claim against the District Of Columbia Il
government, for which some other and better
node Of payment will be devised or may be en- r
orced; possibly the appreciation Of the bonds .
which would result from an adoption of the re- S
to make the interest payable in T
gold, together with the clear guarantee of the
United States Government and a declaration
hat the conversion Of the certificates CT the board
Of audit would cease after a given time, would H
,ause the whole, or nearly the whole, to be v
funded contemplated in the act of Congress.
A careful record is kept of those who have con- a
7erted certificates should it be deemed proper F
hereafter offer better terms to those who have
refused TO convert, in order that all may be on
The same footing. T
1t would much conduee to the convenience Of G
he holders of these bonds that authority be
given by Congress for the issue of e,stered in L
lieu of coupon bonds when desired, aud that the
interest on both classes be made paya BILE through
he officers of the Treasury the United States.
The operations of the Sinking Fund Commits
sion have been from its origin more those of an
auditing and funding board, owing to the duties
imposed on it by the Legislature, of settling up
inally the financial affairs Of the late corpora
lions Of Washington, Georgetown and the Levy 5
Court, and, by act of Congress, in funding the b
coating debt Of the District into the new 3-65 =