Daily globe., 1879-04-07
SHERM4N,S FINANCIERING.

The latest achievement of the treasury de-
partment, under the management of John
Sherman, has been the refunding of the 52O
bonds and consuls of 1868 into four per
cents. The last subscription, made on Fri
day, was for fifty million dollars, which was
made by syndicate of New York banks.
On the surface this appears to be great
achievement of finance-a saving Of two per
cent. in the rate of interest on all our ma
tional bonds. Yet will close examination
Of the transaction support such suppo-
sition? We confess that we are not at all
pleased, and the public will share our disap-
pointment when they fully understand the
matter.
The banks made their subscriptions to the
four per cent. loan on ths 4th of the present
month, and the bonds commenced to bear
interest from that date. The subscribers are
not compelled to pay for these bonds, how
ever, by the surrender of six per cents. until
che fourth day of July next. They therefore
draw fourper cent. interest on fifty millions of
the refunding bonds, while drawing six per
cent. on an equal amount of 5-20 bonds for
the space of three months. Mr.. Sherman has
therefore agreed to pay to the banks, as
bonus for taking the bonds, in addition to
the one-eighth of one per cent. allowed by
law, the enormous sum of three quarters of
million dollars. Since the refunding COM
menced Mr.. Sherman has pursued the same
policy of allowing three months interest on
the six per cent. bonds after they had been
offered in exchange for four per cents. It
will thus be seen that he has paid as bo-
nus for subscriptions to the loan, in
| addition to the lawful commission, q
sum amounting to nearly, if not quite, seven
| millions of dollars. The amount of six per
ceLt. bonds refunded thus far is about
| S47O,O00,000, and on this amount the coun-
| try has been paying the exorbitant rate of
ten per cent. interest for three months.
This may be regarded by Mr.. Sherman
and his backing as a triumph of financial
management, but the GLOBE does not SEQ it
in that light. It looks to US more like a
systematic plundering of the people for the
benefit of the rich corporations of
the East to whom Sherman has shown ex-
ceptional favors. It will be nearly year
before the country can derive any benefit
whatever from the refunding of the dsbt
and the reduction of the rate of interest,
and who knows but ere that Tins some other
device may be concocted to still further rob
the treasury. Is it any wonder that during
The progress of this refunding-this reducing
of the interest on the public obligations
the debt statements have shown constant
md very considerable increase?
Divested of all the glamour with which
MIR. Sherman has sought to surround his
operations, they resolve themselves simply
into this: He has gone deliberately to work
to give to the money kings of Wall street a
profit of seven millions of dollars more than
was allowed by law in fixing the rate of com
mission on the sale of the bonds. This
may be sagacity iu the opinion of Sherman
and his confreres, to our mind it is simply
robbery. It has imposed an additional
burden upon the people that they are o.
present but poorly prepared to stand. II
shows that Sherman either has very poo1
idea of fnanciering, or that he has a very
tender feeling for the money brokers. Ger
cain it is that if the treasurer of Ramsey
county should pursue the Same policy, mucl
IS the people of St. Paul esteem him, the,
woald be constrained to adorn lamp-pos
with his venerable form as an example t.
those who may hereafter hold the purse
strings to avoid that system of inanciering