Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1879-07-19

this sum almost the whole was taken
abroad, where the considerations which
made the new bonds desirable were much
more powerful than with the people of the
United States. During the next three
years. within which occurred the panic,
the bursting of the bubble which had so
fascinated and infatuated the public mind.
only $3.50, 5000 more of the reiunding
bonds were disposed of. still largely to
foreign markets, and mostly > per cent.
bonds.
When Mr.. Sherman assumed office. the
condition had materially changed. In the
first place. he found himself clothed with
the authority to sell, at his discretion. bonds
of the descriptions provided for in the act
of 1870. to prepare for resumption, the
period fixed for which was less than two
years distant. In the next place, the ire
mendous change involved in the crisis
of ls73-the final and complete dissipation
of the speculative spirit, and the revival
of the traditions which had been recog-
nized in sounder times-had measurably
taken place. Not only this. but there had
even been a reaction which had rendered
capital, for the time being. unduly timid,
and which made absolute security and long
duration of investments more important
than they had ever before been in the
minds of American capitalists. Nor was
this state of affairs confined 10 his own
country. There had taken place through
out the financial world remarkable Sc
res of delinquencies in respect of securi
ties, and particularly of public securities.
State loans which had been thrown upon
the markets of England and the Continent
at rates ruinously low for the borrowers
and extravagantly profitable tor the lend
ers, had. in an alarming number of cases,
collapsed, and the eager investors were
being compelled to face the simple prob
lem in arithmetic whether very high rAe
of interest on IL bond bought far below par
was profitable when after few years. in
tetest was stopped and the prospect of the
payment of the principal, vanished hope
lessly. In addition to this was the widely
extended failure of industrial and com
mercial enterprises, the promoters of which
had advanced extravagantly the price Of
loanable funds.
Mr.. Sherman was shrewd enough to see
that the time was propitious to complete
the work of relunding, and he entered upon
itwith an energy. an independence of .iudg-
ment and of action, a firmness and patience
of purpose, which cannot fail to be remem-
ed to his honor. Whatever may have
been his errors in other, and even in more
important, departments of financial policy
and we have never concealed our opinion
that these have been exceedingly grave
he is entitled to the credit of having car
ried the task of refunding to successful
conclusion with great skill, Judgment and
fidelity. Within two years and quarter
he has placed in the markets OF the world,
and, to a considerable extent. in our own,
some $50, 000, 900 of the bonds provided
for by the act of july II, 1870. OF this
amount Sl0I, 100000, in round numbers,
has been for redemption purposes. The
remainder represents bonds bearing Il
higher rate of interest called in and paid
OF the 1850, 100000, about $500. 000. 600
are ID per cents, and $3.50, 900, 900 are
1 per cents, the latter being the cheapest
loan ever issued by the United States.
BY the terms of the law, all the bonds
were to be disposed of at not less than par
in coin, and the bonds redeemed were to
be paid at not more than par, These con-
ditions have been, it is needless TO say,
strictly observed. and the fact must be
kept in mind in order to appreciate the de-
gree to which the credit of the United States
has been maintained and advanced It is
not an exaggeration to say that it now
stands as high as that Of any nation in the
world.