The Stark County Democrat. [volume] (Canton, Ohio) 1833-1912, 1878-01-24
sHERMAN's FINANCIAL SCHEME,
lie Gives His Views to COMMITTEE How to Place
the A Per Cent Bonds.

popular b60Jllu6uli anu hlpO AOi WV w.
venience of negotiation, it was deemed
best to terminate that contract and to
place those bonds in the market on
somewhat different plan, namely, to em'
ploy, as far as possible, all national
banks and bankers of established credit
who would give requisite security in the
sale of bonds, to reach, if possible, all
classes of people, to treat them ali alike,
to allow all the same concession and to
deliver bonds to them in any part of the
country free of charge, and to invite pop
ular subscriptions for that purpose
When, however, the Treasury Depart
ment came to put that plan in actual OPP
Grafton, it was found that under existing
laws there we're some embarrassments,
which, if Congress should see proper to
remove, would enable it very largely to
increase the loan, and to distribute it
more rapidly than it could be done at
present under the law as it now stood
The Secretary then proceeded to show
the existing embarrassments and pre-
sented to the consideration of the COM
mittee the draft of a bill to promote the
deposit of savings and the refunding of
the national debt. Commenting on the
provisions of this bill, he said if Congress
would pass it, he would be able to refund
the public debt very rapidly and to carry
out the operations of the Treasury with
increased advantage to the public. He
preferred this mode to the one he had
previously indicated for the popular loan.
It propo, ed that any holder of United
States notes may deposit them at any
postal money order Office in the United
| States. and shall be entitled to receive
therefor free of charge, postal order on
the Treasurer of the United States. Such |
postal orders, when presented to the
Treasurer at Washington in sums OF ten |
or any multiple of that sum shall be con-
vertible into certificates of deposit of the |
United States of the kind and description
provided for in the bills. Such certifi-
Gates may also be issued in exchange for
United States notes at the Treasury OF
the United States, at the Office of any as.
sistant treasurer, or at any designated
depository of the United States. The
certificates of deposit are to be issued by
the Secretary of the Treasury, of such
form and description as he may pre-
scribe, and of denominations of ten,
twenty, fifty and one hundred dollars,
and bear interest at the rate of 365 per
cent. per annum for term of one year
and no longer, and shall be received and
redeemed by the United States in pay
ment only for bonds, and certificates
may be held by any National bank for
that portion of its reserve not required to
be kept on hand in specie or legal tender
notes.
The Secretary is authorized to receive
either United States notes or postal or.
ders or certificates of deposit at their
market value in coin in payment in Uni
ted States bonds issued under authority
of law, or in lieu of such bond register
ed bond, or inscribed debt on the books
OF the Treasury, similar in character,
leaving interest to be compounded every
six months, All United States notes re-
ceived into the Treasury to be applied
exclusively to the payment of any bonds
of the United States, redeemable at the
pleasure of the United States, or to the
purchase of coin or bullion to be applied
exclusively to the payment of such
bonds.
OBJECT OF THE PROPOSED NEW BILL
Several questions were asked by men,
bers of the committee with regard to the
true meaning and intent of this bill,
among others by Mr.. Wood, Chairman,
who INQUIRED whether the Secretary did
not think that certificates authorized to
be issued in lieu of postal money orders
that the bill called for could not be used
for currency, especially as denominations
ran down as low as ten dollars, and
whether, after the expiration of the one
year in which they bore interest, they
could not then be used upon their par
face with accrued interest as currency
the same as legal tender notes
now are, and if this view was correct,
whether the effect would not be to add
six hundred millions of dollars, the
amount Of the 520s yet unrefunded, to
the circulating medium of the country ?
The Secretary replied he thought not.
Mr.. Wood said, but, after the expira-
ton of a year, during which they were
entitled to draw interest, having mean
while gone into popular circulation, the
question is whether they might not con-
tinue to be issued as currency, and not
be presented for redemption or Conver-
sion2
The Secretary replied they never
could be converted into more than
four per cent, bond, and that they
would be entirely presented for such in
a year.
The Chairman said he understood that,
but the people did not receive any inter
est now on United States legal tenders,
and if holders of these certificates choose
to regard them in that light as currency
you would have no control over them.
The Secretary replied the difference
would be United States notes or legal
tenders and these would not be.
Mr.. Wood said the legal tender feature
was not of practical importance regard
ing circulating currency passing from
hand to hand. We have already large
National bank circulation which is not a
legal tender by law, but yet it is circu-
lating medium of great value and gener-
ally regarded as such. Now, the question
arises whether these certificates repre-
sented generally by postal orders may
not continue in circulation the same way
unless there be something in the act to
prevent it.
Mr.. Tucker of the committee, said that
as he understood the point of the Chair
man, it was that when certificates ceased
to bear interest they might pass as cur
rency.
The Secretary asked, is there any OBJ
lection to that2
Mr.. Wood-I have not raised the
question. / merely wanted to obtain
your views as to the possibilities under
your bill. |,
The Secretary referred to the feature Of
n. III - L -G l