The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1875-03-10
Secretary Brtstow's New MOve-The
Sinking Fund, Finance and BUSH
ness.

Treasury that he will stop the interest on
$50 ZOO, 900 OF fve-twenty bonds at the end OF
three months and pay off the bonds in gold
either then or at any intermediate period
when they are presented, is the most impor-
tant event which has taken place under Mr.
Rristow's administration of the department
We will first offer such explanatory observa-
tons as will make it Ineligible from his
own point of view, and then attempt TO inter-
pref its bearing on tie business of the country.
The act of February, 1862, which is the
basis OF the financial policy since pursued by
the government, excerpts duties on imports
from the operation of the Legal Tender act re-
curing them to be paid in gold and setting
apart the proceeds-frst, to payment Of the
interest on the United States bonds; second,
to the annual purchase or payment OF one
per cent of the entire public debt; and
third, requiring the surplus to be paid
into the Treasury for its ordinary
uses. For long period, beginning in the
last years of President Johnson's administrs-
ton, the excess of revenue over expenditure
was so great that little attention was paid to
the specific provisions of law relating to the
sinking fund During the four years of Presi-
/ dent Grants first term the national debt was
reduced at the rate of nearly a hundred mil
lions year, which more than complied with
the spirit if not with the strict letter. of the law
But since the great panic of September, 1873,
the revenues have so fallen off that the reduc-
tons of the public debt have been very slight,
and the requirements OF the sinking fund have
not been met either in letter or in spirit. The
law Of 1862 is regarded by the Treasury as a
pledge of the public faith, whose fulflment is
important element of the national credit.
The pledge could not be kept without adj
ditional revenue, and it was chiefly on this
ground that Nc. Bristow was so urgent to
have Congress pass the new Tariff and Tax
BILL which was forced through near
the close Of the session. The thirty
millions of additional revenue expected
from this bill are applied at once
by the Secretary to the object for which he
asked it. Relying upon the future proceeds
of the enhanced tariff to meet the future
wants of the Treasury he makes bold stroke
and surprises business circles by deciding to
mediate purchase of bonds for the sinking
fund
Doubts have been raised as to his ability to
redeem SO large an amount as thirty millions
of bonds within the ensuing three months;
but such doubts are not well founded. BY
the debt statement Of March it appears that
the coin in the Treasury was SIS, 626, 083 Of
this amount 500, 269 400 belonged to the
holders of coin certificates, and 500, $50, 10
was held for accrued interest, leaving a sur
plus of $27,275,973 against which there was
no demand-a sum which falls short by less
than three millions of the thirty millions which
the Secretary offers to pay for the redemption
of bonds. This will doubtless be made up
within the ensuing three months by
the increased rates Of duties. More
over, the deposits of gold in the
Treasury against which coin certificates
are held by private owners is resource for
immediate uses, for there is no likelihood that
this sum will be all withdrawn or even seri-
ously diminished. 1t is therefore beyond rea-
sonable question that the Secretary will be
able to redeem In gold the thirty millions
of bonds upon which the interest is to be
stopped
The next question is, how this great step
viii affect the gold market and the business of
the country. The answer TO this question de-
ponds upon the classes of bonds which the
Secretary decides to call in. The government
bonds are in two forms-regstered bonds,
which are entirely held in this country, and
coupon bonds, Of which the greater part is
held abroad. If the thirty millions called in
by Mr.. Bristow should consist of registered
bonds, the gold paid for them would remain
in the country, reduce the premium and sup
ply to our importing merchants increased
facilities for paying the higher rates of duties
under the increased tariff. If, on the other
hand, tue thirty millions of bonds to
be redeemed should be coupon bonds,
the greater portion of them would
be sent hither from abroad and the
gold paid out for them would be exported
We presume the Secretary will cali in some
bonds of both forms but it is to be hoped,
in the interest of American business, that
there will be great preponderance of regis
tered bonds If We are ever to reach specie
payments it is necessary to have stock of
gold in the country, and the Treasury opera
tons should be conducted with view to that
necessity
The policy now adopted by the Treasury of
punctual compliance with the law relating to
tie sinking fund will be attended with one
important advantage. 1t will accomplish q
divorce between the Treasury and Wall street.
1t is a remuneration Of the policy SO long pur-
sued by Secretary Boutwell, and his immedi-
ate successor of attempting to control the
gold market through the fiscal action of the
government Boutwells pet idea was to
maintain heavy surplus of gold in the
Treasury, where it earned no interest, TO be
LII torrorecr, c,unr the WILL ctranf c,Aaci,-