Weekly Chillicothe crisis. (Chillicothe, Livingston Co., Mo.) 1878-19??, 1880-05-13
distinguishing the Public Debt.

The following letter has been sent by
the secretary of the treasury to the Hon.
Thomas F. Bayard, chairman of the
finance committee of the United States
Senate:
SIR-l have the honor to acknowledge
the receipt of your letter of the Goth inst,
transmitting the senate bill to define the
amount and manner Of purchases of pub
lie bonds to be made by the secretary of
the treasury, and requesting my views in
regard thereto. The bill in question re-
quires the secretary OF the treasury to
purchase outstanding obligations of the
United States bearing interest at 6 per
cent per annum, to an amount not less
than S5,0O0,000 in each week, until he
shal have purchased and extlnguished all
such outstanding obligations, these pur-
chases to be made in addition to, and IN
dependent Of, any purchases of outstand.
ing obligations Of the United States by
the secretary on account of the sinking
fund. The bill also provides that all pur-
chases Of bonds hereafter made shall be
advertised in the public press on Monday
OF each week. and the purchase amounts
thus advertised for shall be made by the
treasury on Wednesday Of each week. In
reply have to state that the amount of
six per cent obligations now outstanding
Is about $25O,000, 900, which, under the
provisions of this act the treasury would
be obliged to purchase within the next
fifty wee ks. To accomplish this purpose
the surplus revenues within that period
must amount to the face of the bonds and
the premium paid thereon. The present
rate, which is about six per cent, or the
revenue in the treasury accumulated for
redemption purposes must be used or
resort be had to increase taxation. The
surplus revenues since the first of January,
though larger than was expected, or can |
be expected IN the future have been only |
about $lO,OOO,000 Il month, but should |
they continue at the same rate they would |
provide for payment within the next fifty |
weeks Of less than one-half the bonds |
which this bill requires to be purchased.
With the deficiency bill now pending in
congress, and which will soon become a
law, and probable appropriation for the
next year. there is no probability of having
such large amount of surplus revenues
as stated. There i5 at present of cash in
the treasury about $l52, 00,000, above all
matured liabilities, excepting United
States notes. Of this amount there Is of
fractional silver coins and of nickel and
minor coins about twenty-three millions
which would not be available for the pur-
chase of bonds, these coins being legal
tender only In small amounts. This
would leave of available cash in the
treasury about Sl29, 900, ,000, which amount
was accumulated to large extent by the
sale OF bonds for the resumption Of specie
payments and is little less than forty
per cent. of the amount of outstanding
notes. Neither the law nor sound public
policy seems to permit any encroach-
ment on this fund. There would
seem, therefore, to be no method
OF carrying out the provisions of the bill
except by resort to increased taxation, and
the propriety Of such increase for this pur-
pose must be determined by congress.
deem the matter of advertising in adj
vance amount of bonds to be purchasedas as
unadvisable. Such course would only en-.
able bankers and brokers to advance the
price of bonds and to dictate terms to the
treasury. Under the existing method of
making purchases it is understood by all
that the surplus of the government will be
paid out from week to week in the pur-
chase Of bonds, bids for which will be re-
ceived up to noon Of each Wednesday at
the subtreasury in New York. The
amount Of bonds to be purchased is not
made public until after all bids are in,
thus preventing any combination to COM
pei the treasury to pay exhorbitant rates
Tor bonds, and it is well understood that
.he department reserves the right to re- s
ect all bids, should the prices be consid- /
red unduly high, right which would be {
under the proposed bill c
Knew OF no reason for purchasing bonds I
beyond the amount of surplus revenues, '
md for this purpose the treasury already h
las sufficient authority, while the present $
node OF making purchases is probably as
advantageous to the government as any h
hat can be desired. IN
am, very respectfully, t
CSignedl JoHN SHERMAN, Secretary. II