Watertown republican. [volume] (Watertown, Wis.) 1860-1906, 1880-12-08


mated by the ten-doar refunding certificates
authorized by the act of February rs, 1879.
No other United States bonds than those stated
become redeemablc prior to the LIST Of Septem
Der, 1891, the date Of maturity OF the four-and-
a-half per cent. bonds. The requirements of
the s1nklng-fund prior to the maturity of the
four-and-a-haif per cent. bonds, for period of
ten years, from 1882 to 1891, both inclusive,
are estimated by the secretary at an average of
$50, 100000 a year.
Itmay be that during this period, by the change
of our financial condition, OF from unforeseen
events. the government will not be able, as in
times past, to apply sums SO large to the re-
duction Of the debt; but it IS probable that any
temporary deficiency would soon be made good
by increased revenue. This contingency may
be provided for by the terms of the bonds.
The secretary, therefore, recommends that
provision be made for the issue of an amount
not exceeding $500, 100000 of treasury notes in
denominations not less than ten dollars, bearing
interest not exceeding four per cent. per
annum. and running from one to ten years,
to be sold at not less than par the amount ma
turing during any year not to exceed the SINK
| ing-fund for that year, and the proceeds to be
applied to the payment OF five and six per cent,
bonds, maturing in 1881. 1t is believed that,
with the present favorable state of the money
| market, sufficient amount of such treasury
| notes, bearing an annual interest OF three per
cent, can be sold to meet o considerable por-
confer upon the department q discretionary
power to stipulate for o higher maximum rate,
to avoid the possibility of failure. Such dis
cretion is not likely to be abused, while power
too carefully estricted may defeat the beneficial
| object of the law.
1t is also recommended that authority be
| given to sell at par an amount not exceeding
| R400, 600, coo of bonds of the character and de-
scriptiOn of the four per cent bonds Of the
| United States now outstanding, but bearing a
rate of interest not exceeding three and sixty
five one-hundredths per cent. per annltm, and
redeemable at the pleasure of the United States
after fifteen years, the proceeds to be applied
to the payment of bonds redeemaDle on on before
July 1, 1881. Though the amount of the two
classes of securities recommended exceeds the
amount of bonds to be redeemed, no more
can be sold than the bonds to be redeemed
while the alternative authorized will permit q
limited discretion to sell the securities most
favorable to the government. With the author
ity thus recommended, it is believed that the
department can within a year redeem all the
five and Six per cent. bonds now outstanding
| and thus reduce the interest of the public debt
So, 000. 900 per annum and leave the debt III q
form most favorable for gradual payment by
application OF the sinking fund without cost or
premium.
RESUMPTION.
Nothing has occurred since my last annual re-
port to disturb embarTass the easy maintenance
are readily taken at par with coin in al parts of
this country and in the chief commercial marts
of the world. The balance of coin in the treas
ury available for their redemption on the first
day of November last was $141, 597, 01361, and
the average during the year has not materially
varied from that sum. The only noticeable
change III the reserve is the gradual increase of
silver coin caused by the coinage of the silver
dollar and the redemption of fractional silver
coin, more fully stated hereinafter.
Ihe amount OF notes presented for redemp-
ton for one year prior to November 1880, was
| $70G,658- The amount of coin or bullion de-
posted IN the treasury, assay Office, and the
mlnts, during the same period was 81, 1885,
535.67. These deposits have usually been paid
for In coin, through the clearing house, but at
times, when the currency in the treasury would
allow, and at the request of the depostors. they
have been paid for In United States notes and
! silver certificates. Gold coin now enters largely
| into general circulation. Of the revenue from
customs collected i'll New York for one year end
ing November l, 1880, 81, 475per cent. was paid
IN gold com, .O0.125 per cent. in silver coin,
.31,OS7, IN silver certificates, and .11,313
Ter cent. In United States notes. While no
distinction as to value is made between
coin and notes IN business transactions, q mark
ed preference Is shown for notes, owing to their
superior convenience i'll counting and carrying
Many of the current payments from the treasIl-
ry are necessarily made in coin, and much of
the funds held for the redemption OF national
bank notes and of notes of banks that have
failed or suspended is in com. The total coin
in the treasury, at the close of business, Novem-
ber /, WAS S2l8, 710, 1914 of which Sal, 597-
| O13.61 constituted the reserve fund for the re-
dempti0n OF United States notes, as above
stated.
All the requirements of the RESUMPTION act
have thus far been executed, and its wisdom
has been fully demonstrated. 1t only remains to
inn VIII i111fn
essary OF eXpedlent to secure the maintenance
of resumption. The secretary expresses the
utmost confidence that without new legislation
the entire amount OF United States notes now ar-
| thorlzed and outstanding can be easily maintain
ed at par In coin even If the present favorable
! financial condition should change; but IN order
| to accomplish this, the coin reserve must be
kept unlmpaned except by such payments as
may be made from it in redemption of
notes. Notes redeemed should be temporarily
held in place Of the coin paid out.
| especially if it appears that the cali
for coin is greater in amount than
| the com connng III due course into the
| treasury Or the mints. Ordinarily the superior
! convenience Of notes will, as at present, make a
| greater demand for them than for coin: but in
| case OF an adverse balance Of trade or sudden
| panic, or other unforeseen circumstances, the
ample reser He Of coin on hand becomes the sure
safeguard OF resumption, dlspelling not only
| imaginary fears, but meeJing any demand for
COIN that Is Likely to arise. In a supreme emer-
gency the power granted to sell bonds viii sup
| ply any possible deficiency.
| 1t Is suggested that congress might define and
| set apart the coin reserve as a special fund for
resumption purposes. The general available
balance LIS now treated as such fuld but, as
this balance may, at the discretion of the score
tary of the treasury, be unGuly drawn upon for
the purchase or payment Of bonds, 1t would ap-
pear advisable that congress prescribe the max
/ imum and minimum of the fund
United States notes are now in form securi-
ty and convenience, the best circulating medium
known. The objection is made that they areis-
sued by the government, and that it is not the
business OF the government TO furnish paper
money, butonly to coin money. The answer is,
that the government had to borrow money, and
is still III debt. The United States note, to the
extent that it is willingly taken by the
people, and can, beyond question, be maintain
ed at par in coin, is the least burdensome form
of debt. The loss of interest in maintaining the
resumption fund, and the cost OF printing and
engraving the present amount of United States
| notes, in less than ole-half the interest o,l an
equal sum of TOUR per cent. bonds. The public
thus saves over seven million dollars of annual
interest and secures a. safe and cOuvanioD+ mo