The Portland daily press., 1879-07-24

sumption, within one hundred days after its
coming, we sold 1913, 110250 four per cent
bonds, with which to pay an equal amount of
6 per cent bonds, securing a saving of So, ,862-
20j a year Nor is this all. There were out
standing at that time S194 800, 300 five per cent.
ten-forty bonds, redeemable at the pleasure of
the United States. To pay off these bonds the
Treasury Department offered $1,000. DC four
per cent. bonds at q premium OF one-half OF
one per cent, the residue to oe paid from the
proceeds of ten-dollar refunding certificates or
the direct exchange of bonds Pending the
preparation of this offer, ii was greatly doubted
whether the Department was justified in de-
manding premium but as these were the
last bonds that could be offered within two
years, then thought premium could be Sc
cured, and would have demanded higher rate
but that the law required the refunding certifi-
Gates to be exchanged at par for lawful money.
These refunding certificates were designed to
furnish an easy opportunity for persons of linn
tied means to invest their savings in small
sums, and were of great importance, not only
for the convenience Of all classes of our people,
but to interest them in the advantages and sta
bility of the public debt Within two days the
whole S150000,C bonds were Gold upon the
terms stated, ard offers were made for the
whole of the refunding certificates, which offers
were declined, and the certificates were sold by
postal money-order Offices throughout the
United States. and were eagerly taken i'll sums
of one hundred dollars. This closed all the
refunding operations authorized by law, for
there are no other bonds that can now be re-
deemed except by purchase in the open market
at their market value.
The annual saving in the interest charge,
effected by these refundiro operations since
the 1st of January last is $3.50, ,463, and since
the lst of March, 1877, to the present time,
S14,297, III.
Sometimes complaint hos been made that,
during this process of rounding the amount of
interest-bearing debt was temporarily in
creaced, and that interest was paid on two sets
OF bonds at the same time. This, from the
nature of things, was unavoidable under the
provisions of the refunding act of 1870 BY
that act, before any bond can be redeemed
notice must be given for the period of three
months. before that notice can be given,
bonds have to be sold and the money either
collected or secured, and this process necessa-
rily involves the payment of interest for three
months, not only upon the bonds sold, but
upon those to be redeemed. Advantage was
taken of this fact to unjustly arraign the De-
partment for matter beyond its control. A
constant outcry was made that the interest
bearing debt was being increased. The debt
statement would necessarily show that, during
the three months, two sets of bonds were out
standing but it would show also that the
money was in the Treasury, and this being de-
Quoted would leave the balance of the debt as
before. Thus, if you owe thousand dollars
with the right to pay it at your pleasure, and
borrow money for that purpose, you Will nave
two notes outstanding at the same time until
you can apply the borrowed money to the pay
ment of the first note.
This is precisely the condition the United
States was in when borrowing money to pay
outstanding bonds. The debt statement of
July 1st shows as part of the public debt the
whole of the ten-forty bonds, and also the
| whole of the bonds issued for their payment,
| but also shows the money in the Treasury to
| pay them. In the next debt statement the
| ten-forties will disappear, or such as are un-
| paid will appear among the debt bearing nc
| interest. The cash in the Treasury will also
| decrease accordingly. l thought the notice re-
| quired by the law was entirely too long, and in
my annual report to Congress, Democratic in
| both branches, earnestly urged shortening OF
the period to thirty days or less, in order to
save this double interest, but the recommends
tion was declined or ignored. If any one is to
be held responsible for the double interest it
| should be Congress. In justice to the Depart
| ment 1t is but fair to state that all the loans
| negotiated for the two years have been on
| more favorable terms than any loans ever
| made by the United States. They were gener-
| ally made by popular subscriptions by the pee
| pie directly. The saving from the amount
| allowed for the expense of negotiating the loan
| is over 81, ,100,Cyo, and the premium exacted OIL
| A and 4 per cent. bonds amount to 81 Ass
| 94S.25. can say without fear of contradiction
! that no nation ever negotiated its loans at'f
| less cost or on as favorable terms. The sales O
| the famous per cent. consoS OF England
| when made, were on far less advantageou:
| terms than the United States was able to Sc
| cure after accomplishing resumption.
The resumption of specie payments has had
the same beneficial effect upon the business OF
| private citizens The reduction of interest Oh
| the public debt has made it possible to reduce
| the rate on all debts, whether State, corpora
| tion or private, Nothing is more certain thar
| that irredeemable money necessarily leads tt
the increase of the rate of interest. The frs
effect of its issue is to reduce the rate of inter
/ est and to advance prices. If not redeemabl,
in cointit depreciates in value, and more of it il
| necessary to conduct business. 1t causes over
| trading and speculation, not only as to thu
| prices of commodities, but as to its own value
| This is soon shown in the advance of the rate o
! interest, and what is called a scarcity of money
This general rule is stated by such old writers
| as Adam Smith and Thomas Tooke, and il
fully verified by the rate of interest before thu
panic and since resumption. Private debts arr
now being rapidly reduced from 10 to anC
| even to per cent.
The State of New York has, by law, reduced
the rate of interest in that State from to 6 pc
cent The city of Providence sold A per cent
| bonds at above par The State of Pennsylvan
| ia sold 81, 100000 per cent. bonds at above
| par. The city of New York sold 5 per cent
| bridge-bonds at 1876. Five million dollars o.
| Denver and Rio Grande Railway Company pc
| cent bonds were subscribed in two hours-th
| first time for years that money has been pledges
| for building railroad. All securities have ad
vanced since January at the average rate o
| 10 per cent Mortgages at from to 10 per cent
are daily being reduced to from to per cent
Capital is again seeking investment in any saf
securities that offer.
With the first decided preparations for re
sumption there came slowly revival of busi
ness; with the success of resumption, that revi
val is marked in nearly every branch of indus
try.
do not propose to weary you with a mass O
statistics, but will only state the general result
with regard to few leading branches of Am
| erican industry.
The increase of our exports of domestic mer
chandise, since the period of the panic, is with
out example in our history. In the year end
| ing June 80, 1878, the amount of our export
was S505, ,033, ,439. In the year ending June
1879, the amount of our exports was $69961S
9}3. In the five years preceding the panic on
exports were S2013, 02,6l3; and during tn
past five years they were 81 1893, 1877 ,652.
The net imports of mechandiSe decrease
from 1924 ,6G7 ,727 during the year 1873, to S42:
G9502i in 1913, or 81 per cent; whereas the va
ue of our exports of merchandise. representa-
mainly our agricultural and manufacturin
products, increased from S505 033, ,439 in 1877.
to $3.50, ,709, ,263 in 1875 or 35 per cent.
1t may be stated generally that the interna
commerce OF the country shows gradual il
crease of traffic since 1S73-the improvemer
during the last year having been more rapi
than during any preceding year since 1oI
The tonnage of the great railroads from til
of commerce in this country, shows an increas
since 1873 of 375 per cent. The production
wheat and corn the two leading cereal pr
ducts of the country, which constitute the pril
cipal part of our exports of breadstuffs, indi
Gates during the last year large increase owe
the production of 1873. The production {
corn in 1913, was 932 ,C00,CJ0 bushels; in 1917
about 1360,C ,C00,Co1. Production of wheat i
1873, 2S1, ,0C0 900; in 1878, about 425 C00,C1).
The cotton crop of the United States, durin
the year 1878, was larger than any previou
crop in the history of the country. Our e,
poris of cotton increased from 1,200,Cc)CS
pounds in 1873, to sos, ,0CO ,0Co pounds in 1871
The quantity of wool produced increase
from 15S, co., 60 in 1873, to 207 Cc0CS0, in 1877
The total amount which went into consumI
ton, including domestic production and i'm
ports representing the manufacture of woolle
goods in the United States, increased frol
236,C00,0oO pounds in 1873 to 2i9, ,000,C % pound
in 1878.
Even our shipping interests engaged in 70
eign trade-the industry most depressed
some signs of hopefulness. Ships and bark
are the classes of sailing-vessels principally Ell
plOyed in foreign trade. The average numbt
of VESSELS of these two classes built during eaC
of the years 1917 to 1853 inclusive, was 24S, bu
dnring the year 1911 the number was only Al
in 1872, only 10; and in 1873, only 2S. Sint
that time, however, there has been conside
able improvement, the average number bui