Daily globe., 1879-08-28
SLIPPERY SHERMAN.

SLIPPERY SHERMAN.
Attempted Explanation of the Charge of
Favoritism In Connection With His
Syndicate Operations.
CINCINNATI, Aug. 27.--Secretary Sherman to-
day visited the Merchants Exchange and after
being introduced by Vice President Cunning
ham, spoke as follows:
GENTLEMEN-I am deeply grateful to you for
your kind reception in this busy mart Of COM
merce, and know there is but little time ex-
cept for the e3exchange Of courtesies. however
wish to make purely business statement re.
garding matter in which you, in common
with other business men, are interested. Com
plant has been made of y recent order of the
treasury department extending somewhat the
time for the withdrawal from national bank
repositories of the proceeds Of the
sale Of 4 8per cent. bonds.
did this after full examination of
the matter, and am firmly of the opinion that if
L had not done no serious injury to business
would have been the result. The refunding
Opet ations of the government have been uni
formly 80 conducted as to interfere as little as
possible with the money market or with private
business The object has been to make the
exchange of per cent. bonds for the and 6
per cent. bonds, either directly or by credit,
through national bank repositories authorized
for the purpose. With this view notice was
publicly given that the proceeds of the per
cent. bonds would not be called for till needed
to pay the called bonds, which could only be
paid when presented after the ninety days no
tice required by law. When, how
ever, the refunding operations ceased
on the 2lst of July it was the desire
Of the treasury department to close the
loan account rs soon as practicable. Believing
that the called bonds would be presented by
the first of September, / directed the treasurer
to draw on the depository banks for money as
fast "a needed to meet the called bonds, and at
all events to close these accounts from Sept.
lat to the 18Th, and he was acting on this order
when returned from the North early in Octo-
ber, and under it over three hundred million
dollars of called bonds were paid for; but the
called bonds had not been presented as antici-
pated.
On the 18th of September the amount of
called bonds outstanding was about sixty-five
million dollars, but only about thirty-eight
million dollars remained on deposit with the
national bank repositories. Over sixteen mil
lion dollars in excess of the sum wanted to
meet the pay nent of the called bonds had been
withdrawn into the treasury from the market
10 exceas of the sum wanted to meet the pay
ment of called bonds, with a view of closing
the loan account.
At the time stated general complaint was
made that this operation was injuriously affect.
ing business, was advancing the rate of interest
and was unnecessarily drawing legal tenders
from the market. To meet this condition of
affairs, upon the advice of the treasurer III
Washington and the assistant treasurer at New
York. issued this order:
TREASURY DEPARTMENT, Aug. Is, 1879.
Hon. James Gilfillan Treas urer of the United
States:
SIR: With view to closing as soon as prac
ticable the accounts of tho department with
depository banks on loan account without un
necessary disturbance of the money market
or the withdrawal of legal tenders from cur
rent business, you will please receive from
such repositories in payment called bonds
to be credited when passed through the loar
division. You will require from such deposi
tories sufficient money in addition to the calle(
oOnds creditedto meet all demands for the pay
ment Of called bonds. and 40 as to insure th,
withdrawal of all deposits on the loan accoun
on or before the 1st of October next. The let
| ter of the department of March 25th, is modi
fed accordingly. Very respectfully,
JOHN SHERMAN, Secretary.
The statements that this was done to reliev
the banks or to help any one; or that I eve
have been or was interested in any bank ar
simply false, made without foundation or ex
cuse, but as political sensation. The reason
| Why the unsettled accounts are with the FRS
| National bank and the National Bank of Com
| merce, New York. is because the Bank of Com
merce made the $40, ,O0O, 600 subscriptions clos
| ing the 5-2Os, and the First National banl
made the subscription Of Sl2l, ,0O0, 900, closing
the lO-4Os, and, those being the last subscrip
sions. are naturally the last drawn upon.
have received a statement Of the balances OF
the evening of Saturday last, showing that th
| amount of outstanding called bonds uppait
was then $4S,952,223.6l. The proceeds O
bonds sold was $32. .947 6l3.5l For all of thi
the government is secured by deposit of
larger amount of United States bonds
When per cent bonds ar,
taken as security an additiona
margin of per cent. is required. About $40,
OO, ,OOO of these bonds are held by Mr. Convet
the United States agent in London, for ex
change, and are daily being paid by the trans
mission Of called bonds in the ordinary cours
of business. None of the outstanding bond
| bear interest.
submit to you whether on the 18th o
August it would have been admis sible for m
to have combined to drain the money make
of legal tenders and board them in the treasur,
to await the presentation of called bonds. 1
this course had been adopted the clamor woul,
have been much louder and much more Just
did exactly right in the order Of the 18th o
August and stand by it and now under it. Th
loan accounts are quietly and rapidly close,
! without any disturbance in the money market
If this clamor will only induce the holders o
| the called bonus to send them in for paymen
l would be greatly rejoiced.