New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1879-08-19
THE BANKS md THE TREASURY.

There is no sense i'll the continuance of eff
forts to discredt Secretary Sherman. and to
create dstrust as to the permanence OF re-
sumption, by further statements in regard to
the refunding process. The process was in
deed a difficult one for some persons to UNI
derstand. and there was room for much lnge-
NOUS misrepresentation but that mine Is
worked out, and will have to be abandoned.
Yesterday the statement was made that the
banks by which the four per cent bonds were
taken still owed the Treasury $45, 200, 900,
and that the Secretary, in unjust and danger
ous favoritism to them, had extended the time
for settlement until October /. The assertion,
as 1t happens, is not correct.
The banks do not in literal sense owe the
Treasury half the sum named, because large
payments have been made, in London and in
this country, which have not yet been entered
on the books of the Treasury. One bank
alone is entitled to q credit of S19,OOO,OOO
for called bonds aud coupons, which have
already been delivered 10 the agent OF the
Treasury in London, but are not yet recorded
as paid at Washington. And, second, the
Treasury only abdes by the terms formally
proposed by itself, in the circular inviting
permits the subscribers to pay for their
bonds only as fast as the old bonds may
come in for redemption. BY reference
to that circular. issued some months
ago, it will be seen that the Secretary ex
pressly stipulated that the money subscribed
for the four per cents should .remain with
the subscribing banks until it should be
needed in the redemption of the bonds to be
retired. 1t happens that about Sl6,OOOOOO
or S17 100000 Of the called bonds have not
vet come in for redemption. Consequently, the
Secretary does not, and i'll accordance with
the terms of his original proposal could not,
call upon the banks to settle that part of the
account as yet. All the rest of the accounts
have been finally settled by payments made,
though some part of the credits have not yet
been duly entered on the books at Washing
ton, as in the case of the London deliveries.
1t was the object of greatest solcitude and
study, in the Tefunding process, to avoid
needless and mischievOus disturbance of the
markets. The United States did not want to
raise a new loan of many hundred millions.
1t wanted simply 10 find new creditors at low
rates IN place of old creditors at high rates,
and did so with ease because great care was
taken to make the operation as far as posi-
BILE an exchange of bonds for bonds. If it
Lad chosen to pay off old bonds before it sold
new bonds, the Government would have
been virtually lending money, which it did
not want to do. If it should now
insist upon payment for the new bonds
before the old bonds can be obtained
for redemption, it would be virtually Dor
rowing money of the Street. and that it
does not want to do. Just at present the
New-York banks are not in such condition
that they can conveniently lend the Treasury
money and have 1t lie idle there, and Mr. Sher-
man is wise as well as just in adhering to the
terms originally offered. When the called bonds
come in for payment, as most of them will,
through the subscribing banks, the settlement
for the four per cents will be gradually made
without any inconvenience to the market or to
individuals.