Daily globe. [volume] (St. Paul, Minn.) 1878-1884, 1880-05-05
THE PURCHASE OF BONDS.

The letter of Secretary Sherman to Sena-
tor Bayard in relation to the bill requiring
the purchase of United States six per cent.
bonds at the rate of five million dollars a
month is one of the most sensible of his
financial productions, and will find general
approval for most of the sentiments express
ed. The secretary shows that the amount
of six per cent. obligations now outstanding
is about two hundred and fifty millions,
which, under the provisions of this act, the
treasury would be obliged to purchase within
the next fifty weeks. To accomplish this
purpose the surplus revenue within that pc
Rod must amount to the face of the bond
and premium paid thereon at the present
rate, which is about 6per cent, or the re-
serve in the treasury accumulated for re-
demption purposes. must be used, or resort
be had to increased taxation. He then
states that the surplus revenue at the present
time amounts to but ten millions a month,
less than half the amount required to carry
out the provisions of this bill. There is
surplus in the treasury, available for the
purchase of bonds of but a hundred and
twenty-nine millions, but to use this for the
purpose would leave the treasury unable to
meet any unusual demand upon it for the
course of year to come. He also objects
to advertising the purchase of bonds for the
reason that it would give holders and spscu-
lators an opportunity to combine and raise
the price upon the government.
Mr.. Sherman's views appear to be based
on correct premises. Until the revenues of
the country are sufficient to permit of the
purchase of these bonds without completely
obliterating the reserve in the treasury, no
fixed amount should be ordered to be bought.
1t would be safer to leave the matter discre-
tionary with the secretary of the treasury,
provided the secretary is disposed to exer-
else that power to its fullest extent. Unfor-
tuuately Mr.. Sherman's course has not been
such as to inspire confidence in his DISPOSE
ton to do 80. He has rather sought to pile
mp large and needless reserve in the treas
ury on the plea that it was needed to main
tain resumption.
1t is undoubtedly true that the treasury
would be seriously embarrassed by the re-
demption of so large an amount of bonds in
SO short time. A resort to increased tax.
alton is out of the question. The people are
already taxed as much as they can bear. It
would also be unwise to give the spectators
a chance to combine in order to bleed the
government. Perhaps better law would be
to command the secretary to purchase bonds
to an amount equal to the excess of revenue
monthly, leaving the surplus reserve for the
time being untouched, but liable for unex-
pected drafts upon the resources of the gov
eminent.
The bill in its present form should not
pass without full consideration. It is not
the desire of any one that the government
should encounter the least embarrassment,
and it seems as if this bill was calculated to
bring about such result. 1t is to be hoped
that the exact amount of the purchases be
left indefinite, while at the same time COM
polling the secretary of the treasury to nse
all surplus revenues for the purpose of re-
ducing the debt and lessening the rate of in
faraat