The New York herald., 1875-12-08

NJ
To which add the reduction in the item Of
"Intercst duo and unpaid and accrued -. -
interest TO date ,................'.'. -'i,"'A %
Making the sum or...............sl,O or 81, ,O22, $50 So
II will therefore be perceived that difference
lists in these accounts other than that which grows
out OF the manner OF their preparation
or the necessity for economy in administering the
finances OF the government tho Secretary says
Frusalty in administration is among the foremost
and most important points OF a sound financial policy
Faithful collection Of the revenue and reduction of
pendii urcs TO the lowest point demanded by the
sites Of government constitute the first duty Of those
inrusted with making and administering the law.
The obligation adhere strictly 10 this duty has pcc
liar force, while the public indebtedness large and the
industries OF the country suffering from financial
depression Rigid economy at such time must lead
TO two important rcsns;-First, advancement OF the
credit Of the government throughout the financial
world and hence ability 10 refund the debt at lower
rate OF interest; second, and by means least IN i'm
portance greater Willingness on the part OF the people
10 bear the burden OF taxation when they see that their
government like themselves, reducing expenditures
TO the lowest practicable point, and applying tho
revenue received from them TO its necessary and egit
mate purposes. The general depression OF business
which followed the era of imitation and extravaganza,
through which we have just passed. has made II
sary that individuals, associations and corporations
should reduce hoir expenditures to the minimum and,
having done so, the taxpayers have right demand
that the government shall do likewise. While tho in
erest on the public debt and all other national oblga
tous must be promptly met, there many points at
which II is believed that considerable reduction OF a
preparations properly be made aud the Secretary
invites critical examination OF all the estimates submit
ted to Congress. Increase of public expenditures in
time of great prosperity and extravaganza is accom-
plshed by easy process but n corresponding rcduc
ton when the reverse comes can be brought about only
by the closest vigilance and most determined resistance
to every appeal for appropriations not required by the
existing necessities OF government.
No appropriation OF money should be made without
reference to the probable amount OF revenue TO accrue
within the year III excess OF existing obligations and
Liabilities.
THE SINKING FUND
The h section oi the act OF February 25 1862, sets
a special fund all duties imported goods and
directs the application thereof
FrSf-To tho payment in coin Of the interest on the
bonds and notes oil the United States
Second-ro the purchase or payment OF one per cent
of the entire debt Of the United States, to be made
within each fiscal year alter tho lst day of july 1862
which to he set apart as sinking fund, and the in
tcrest of which SHALL in like manner be applied to the
purchase payment OF the public dobt the Secre
tary OF he Treasury shall from time to time direct
ThirdThc residue thereof to be paid into the Treas
ury OF tho United States.
Section six of the act OF July a. 1870 directs that
the bonds heretofore purchased and then held in the
Treasury in accordance with the provisions of the act
aforesaid, and all other bonds which had been pur-
chased By the Secretary OF the Treasury with surplus
funds in the Treasury, and any bonds thereafter applied
to said sinking fund, with all others thereafter
deemed pad, shall be recorded, cancelled and de-
stroyed, and that the amount OF the bonds oil each
class so cancelled and DESTROYED shall be deducted
respectively IRON the amount each class OF the out
standing debt Of the United States. The last named
act also provides that, in addition to other amounts to
be applied to the redemption or payment OF the
public debt amount equal TO the interest
on all bonds belonging to the aforesaid sinking
!
shall from time to time direct TO the payment OF the
public debt provided Tor in section live of the act
first above named and appropratcs from the receipts
Tor duties on imports the amount so to be applied.
These acts are regarded by the Seer etary imposing
upon him The imperative duty to take of the sink
ing fund, therein directed, out or the coin received
from duties on imports This requirement is secondary
only to the payment OF interest the public debt II
takes precedence all other appropriations Us by the
very terms of tho legislation only the residue of re-
ccpts from customs after deductng interest tho
public debt and providing for the sinking fund, goes
into the Treasury
%hc statute imposes upon the Secretary duty to be
performed annually the requirement being that the
purchase, payment, for and OF the sink
ing fund shall be made within each fiscal year.
During the past fiscal year IT not practicable TO
purchase the amount Of United States bonds required
Tor tue sinking und ior the reason that such bonds
could not be bought at par and the Secretary for
hidden by law to pay more But the eleventh section
OF the act of March 1870 authorizes the Secretary
ior the purpose Of obtaining bonds for the sinking fund
TO give notice that he will redeem in coin at par, any
bonds of the United States bearing interest at the rato
OF six per cent OF the kind known as nve-twenties and
further provides that interest such bonds shall
at three months from the date of notification
REFuNDlNG THE NATIONAL DEBT.
Since the Secretarys last report TO Congress the
funding oil the national debt authorized by the OF
July H. 1870 and January 90 1871 has been continued
Tho contract which was entered INTO July 2S 1874 and
which is fully set forth and explained in
ary 20, 1915, tho contracting parties being
Messrs August Belmont 4 Co., OF New York on behaf
Of Messrs. n NJ. Rothschld 4 Sons, of London, Eng
land Mcssrs. Drcxel, Morgan Co., OF New York,
behalf of Messrs j. ). Morgan Co, of London Eng
land, and Messrs. j. & W. Seligman Il Co Of New
York. on behalf OF Seligman Brothers. London, Eng
land. The conditions OF the contract slightly
modified the contracting parties being allowed half
OF one por cent commission and binding themselves to
dciray all expenses incurred transporting five per
cent bonds to London and six per bonds, United
States coin coupons, and gold coin from London to
Washington, besides the expenses of preparing the new
bonds.
Under this agreement the contracting parties have
subscribed for sl22 6SS 800 the balance of Gves,
then remaining unnegotated; and the Secretary now
has the pleasure of announcing Congress that tho
funding OF the $500 ooOo 600 of SIX Per cent bonds into
those bearing five per cent interest has been accom-
plished thereby saving an annual interest to the gov
ernment OF $4,000 000
The success which has attended the refundng
of slTS 4S, 800 OF the national debt during the last
sixteen months, with the steady improvement OF the
national credit induces the belief that the remainder
of the six per cent bonds be refunded, within
reasonable time, in accordance with the provisions
OF the acts before mentioned. The attention of Con-
gress is however, called TO the fact that by the terms
OF the authorizing act, the bonds to be issued the
rate of four and one half per cent redecmablc
any time after the expiration of fifteen years from the
date OF their issue Bonds most easily placed on the
market, which are most sought for by investors,
and considered in all respects the most valu
able, are those having a long period TO run.
Taking into consideration the fact that but little
induccment is offered in the amount allowed
as commissions for placing the United States
loans compared with thar paid by other governments
IL is thought important TO give these bonds all the ele
of popularity that may be possible: and the Sec
retary, therefore, recommends that an amendment be
made to the act fully II, 1870 which shall extend
tho time OF redemption OF such bonds to thirty years
from tho date Of their issue
RESUMPTION OF SPECIE PAYMENT
The depression OF business and general contraction
Of values which followed the financial panic OF 1873
have continued TO greater less degree in all parts
Of the country. Similar financial commissions have
occurred ia other countries and their effects now
being felt TO degree as great perhaps in this
try These disastrous disturbances have been brought
about IN our own country by oyertrading, overcrcdt
and excessive enterprise of speculative character
stimulated by too great abundance OF promises pay
existing in tho form Of currency not based
upon, or convertible uto, the only actual money
OF tho world and Of the constitution gold and silver
Other commercial countries which have suffered and
now suffering from financial depression have felt
the influence of like causes while in some of them tho
temptation to carry prosperous times TO has,
has often happened before led to ovcrproduction and
that superuity Of trade and credit which ncvta-
bly, sooner or later, be followed by a collapse and
corresponding period Of depression. Although there
gratifying indications OF increased activity in Ger
tam branches OF business the United States,
be admitted that confidence has not yet
TO the extent necessary TO bring about general revi
val to put the trade and Industries OF the country
upon basis OF activity aud permanent prosperity. Nor
Is II reasonable TO expect that this Will be done until