The sun. [volume] (New York [N.Y.]) 1833-1916, 1878-12-25
SHARP TALK rRoM Mr. nEWIrE
What he says about shrrman's Transaction
with the First National hank.

Prom ne Ecrnfnq Post
"The grievance is this: That the Secre-
tary of tho Treasury has exercised discretion
uf he has any discretion, and this is yet to be
ascortainedl to tho advantage Of this bank and
not OF the Government. This Is the grievance.
During the last eight months the double In
tcrcst-that is. the interest on the four per CEN
tum bonds and on the six per centum bonds
paid out by the Government ON the 100000 600
monthly average held by this bank is more than
ti,000,000. What proportion tho bank has made
| don't know. I only know that the Govern
ment has lost the million dollars"
Do you blame the bank2 ?"
DO you blame Mr.. Sherman ?"
II he has violated the law. no Ia TO blame. III
he has obcyed 1t he IL not TO blame. III he has
discretion In tho matter, and in the use OF TINT
discretion selected n method loyal, but inIudi-
cious and improvldent then also no Ia TO blame.
! don't say that he had any discretion, He GER
tainly has frequently exercised discretion. The
Ereniu0 Post last evening gave an illustration
in it's leading editorial. in the matter Of his re-
cent circular allowing groenbacks to 30 into the
Treasury through tho custom houses instead
OF going thcro direct In exchange for coin. He
exercised discretion also In regard to the mode
in which silver was to be put out; and can't
Imagine an administration Of the Treasury
where u man IL not forced to exercise discretion.
=. But MI. Hewitt continued, " II the transac-
lions with the First National Bank are defcnsi-
bic. what is there to hinder such transaction
as this. for example: Mr.. sherman delivers
being secured by deposit Of 90 in six
per centum bonds. which can bo easily OBJ
tanod at n slight change Tor use; the man or
bank that deposits them makes the interest
either on the four per ccntums or on the six
per centums. Or. suppose a banker. in what
ho considered to bo u favorable state OF the
market, takes 800 900 900 in four per centum
bonds Mr.. Sherman delivers them at once
taking IA security u deposit Of tho same amount
in ak por centum bonds The banker draws
interest on both bonds Tor three months. and all
he has ever put up Is the six per ccntun bonds.
1t Is equivalent 10 getting ten por centum ON
your mOney-a clear profit OF seven per ccntum
per annum on 800 1000. 000 whom II IL worth
only thrce per centum: in other words. no
makes $1,000 900 II tho transaction goes on for
Now. | hold" Mr.. Hewitt proceeded ear
nestly, "thnt Mr.. Sherman should sell the four
| per centum bonds put the money into tho
| Treasury, and then invest II from tmc TO time
| in such manner as the law may prescribe. and
| In no other manner. As far as he has any dis
crction he should use II for keeping proper bal
anccs Just IA n merchant would. The question
| to DO decided when the First National Bank
| matter comes up again In Congress will be
| whether or not MIR. Sherman's transactions
| with that bank were OF tho nature OF u loan Of
| the national funds TO private parties. As l
| have said tho Government has already clearly
| lost ut least 81 OO00 900 by those transactions.
| Could not the Government have saved that sump
| This Is what want Congress TO ind out"
| When will the question come up 2"
| Immediately after the opening OF the ses-
| sion. II the Committee on Ways and Means re-
| port on II. | may say that did not make my
| statement in concert with any human being
| but entirely at my own instance"