New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1880-12-08
PLANS FOR EEFUNDTNG.

Secretary Sherman has right TO give advice
as TO the mode of Iefnnding. a recommends
ton from him ought to receive peculiar atten-
ton from Congress and from the country. This,
not only because no other tinancer in any
country has ever accomplished great an
achievement rs the returning within the past
three years; not only because the ableSt tinan-
cieTs of both parties in this country, and OF all
shades OF opinion in other countries, unite in
attributing his remarkable success largely to
bis own tact and wisdom in the exercise Of his
discretionary powers but even more because
of the peculiar position which Mr.. Sherman
now occupies. He does net expect to he IN the
Cabinet after March 4, and therefore the cxecu-
ton of measures now devised will rest with all
other. But there is much reason TO expect that
he will be in the Senate. and if so, necessarily
the leader of the Administration party on finin-
cial questions. He cannot wish to be called to
account there, day after day, by his Democratic
associates, for the failure or evil consequences
OF measures recommended by himself. lie has
no reason to propose an unwise measure; no
personal advantage to gain by getting large OF
discretionary powers for an unknown Secretary
to come and strong personal reason for recon-
mending only the wisest and best measure
that, in the light of large experience, and with
the aid of the ablest advice III the country, he
has been able to devise.
The proposal to issue short-term interest
bearing notes probably strikes many unfavor-
ably ut first 1t Is contrary TO recent practice,
and for good reason the circumstances have
greatly changed. The Government can borrow
at a low rate of interest, but it has also to pro-
al. 1.l,N oh t.n g
$ij00O,O00 to $j0,000,O0O yearly, for ten
years to come, under the requirements of the
Sinking Fund act. The same high public credit
which enables the Government to borrow at
less than 4 pei cent will compel it to pay high
premium on all bonds purchased for that fund.
Hence there would be an actual loss during the
next ten years, in refundng the per cent
bonds now outstanding in any non -redeemable
bonds that can now be sold. But to leave ont
standing $500, 600, 900 OF 5peT cents, winch
become redeemable in July next, until the Gov
eminent could redeem them, would also in
vOlve payment of unnecessary interest. The
short-term notes will meet this difficulty and
avoid loss in either direction. That amount
of such notes can be made redeemable in each
veal which in that year the Government must
can he sold bearing anything less than ) per
cent interest, the Government saves money. 1t
has been feared by some that these notes would
operate to initiate the currency. But their in
terest bearing character would cause them to
be quickly absorbed by people who have small
savings 60 invest, or funds on hand which they
are under obligation to keep safely without loss
of any part of the principal.
1t is in this direction that the plan promises
the greatest usefulness. Nearly all financiers
have been amazed, during the past two years,
by the complete disappearance OF many millions
of currency and gold. 1t is now generally I'M
derstood that this has bern caused by the hoard
ing of their savings by laboIers, especially at
the South. Since the collapse of the Freed
mans Savings Bank, the colOred people have
had no trusted place OF deposit for then saving,
and there is ample evidence that those savings
have been very large. The farm laborers and
others at the West, where savings banks are
rare, have retained large amounts in their own
hands for similar reasons They are at a dis
lance from any banks, cannot always open
small accounts, and hold their money in the
hope that they may ultimately buy some land,
or otherwise establish themselves Indepen-
IDENTIFY. Ii is not possible to estimate the
amount OF savings TINS retained by laborers
throughout the country at less than
$500, 100000 aud this vast sum- withdrawn
both from tho active capital needed foi the
support of industry and from the circulating
medium, makes most important difference IL
the financial situation. II small United States
notes, bearing interest at low rate, can be
placed in the hands OF these labOrers, and their
great hoard of gold and greenbacks can be re-
leased and returned to circulation by the re-
tirement OF or 5per cent bonds, the country
will he the gamer in every way. OF the feast
bility Of selling such notes, to the amount re.
quired, Mr.. Sherman is advised that there is
no reason to doubt.
The plan also contemplates the issue of