New-York tribune., 1879-12-29
fERXANDo Wo0D on TIE DEDE


A BILL FOR RrFUNDING THE 1881 BONDS At 3l2
PER CENT NOW BEING PREPARED-THH REASONS
OF SIR. WOOD FOR THINKING HIS SCHEME CAN
BE CARRIED OUT.
lBY TELEGRAPH TO THE TRIBUNE
WASHINGTON. Dec 2s.-In the of a con-
versation with a TRIBUNE correspondent yesterday.
Mr.. Fernando Wood spoke freely on the subject of
refundIng that portion of the public debt which
natures in 1881. In meeting of the House Com
mittee on Ways and Means, soon after the begin
ming of the present session of Congress, Mr.. Wood
expressed the opinion that the Government could
now sell bonds bearing 3l2 per cent interest, and
indicated purpose to Introduce a to effect
that object. Mr.. Wood is engaged in maturing
a bill on the subject, which he expects to bring for
ward soon after Congress reassembles. He declines
Mt present TO divulge the details of his plan. be-
cause. lie says, they subject to change and m0d
ficaton. In general terms, however, Mr. Woods
bill will propose an issue of bonds bearing 3la OF
3G5loo per cent interest and running about fifty
years.
"Do you think the Government would find
ready sale for such bonds !" Mr.. Wood was
asked Certainly" he replied. Il not only
think SO. but | know it. Not only can
such bonds be readily disposed OF, but within
year after they are placed the market they
will command premium. Our per cens, which
mature in twenty-seven years, are selling at 104
to-day If yOu will study the quotations of differ
ent securities You will find that the time they have
to run Is a greater element in determining their
market value than the rate of interest they pay.
There is no question now of either the honesty
solyency of the United States Government, and
man who desires to make a permanent investment
would sooner buy 3la per cent bond running fifty
years at than per cent which natures in
twenty-seyen years and for which he must pay a
premium of per cent. This matter of whether we
could sell gig per cents is the only question at
issue between the Secretary of the Treasury and
myself He says cannot sell them. | say We
can. have not forgotten the struggle had In
the Committee of Ways and Means when the
original Funding act was under discussion was
in favor of 4 per cent bond then. The Treasury
officials opposed it for the same reason that they
now oppose the 3i2 per cent bond. and were
finally compelled to compromise three classes of
bonds-fves. four-and-a-halfs and fours We have
since then refunded about 81 400. 900 900 Of the
debt, more than third Of which Is III per cents"
Mr.. Wood. two objections are urged against
your plan" said the correspondent lone is that
the per cent loan has become exceedingly
popular form of investment. and that any change.
either in the rate OF interest in the terms of pay
mcnt. would Linder the placing of a new loan. The
to encounter the revival of prosperity brought
about by the resumption of specie payments. II is
thought that unemployed capital, now that con-
dence is restored and business become prosperous,
would seek a more profitable form of investment
than 3le per cent bond"
Both of those objections are falacious" Mr..
Wood quickly replied. :" In the first place. the
popularity of the per cents bas nothing to do
with the matter In making investments men are
not governed by sentimental considerations man
does not buy Government bond now as an act Of
patriotism. In the second place, Notwithstanding
the revival of business and the restoration of CONT
dence, there is prevailing disposition among our
people to invest portion of all their savings where
it will not be subject TO the fluctuations and risks Of
business The years of depression and distress
through which the country has passed since 1873
have taught people lesson which they will not
soon forget Within the past three years the balance
of trade of the United States has amounted
TO the enormous sum OF 81 900 000. 900 This vast
sum represents profit which people have real
lied their productions, and 1t formed no In
considerable element of the success Of our
refunding operations this year. Besides this.
foreign investors look upon United States bonds
as the safest of all investments While
was abroad last Summer | met many OF the
most influential capitalists in Europe. | found
everywhere feeling of dstrust toward the securi-
ties of European Governments and a feeling of per-
feet confidence in those Of the United States. This
country mas III tne pist Dttn loOkFu upon ABROAD,
and sought refuge from political oppression
and a land where the poor might better their
condition. Now it is looked 10 by wealthy capital
lists and by all who have savings place where
their money will be ii permanently invested.
Our credit Is better than thatof any European ma
ton even England ITSELF because 1t il felt that our
Government is less exposed TO political eonyulsons
than any of them. Why, then, should we pay
higher rate of interest than England" Z"
Mr. Wood gave another reason why he thinks
n 3ia per cent loan would succeed. OF the
S7S0000,000 OF bonds which mature within the
next two ycais. about one-thrd Ia held by National
banks TO secure their circulation. Ii makes no
difference he says. whether these bonds bear 3ia
per cent interest per cent. The remaining
$500 0OO, 900, Mr. Wood believes, would be readily
taken by our own people, without regard to
foreign demand.