Burlington weekly free press. [volume] (Burlington, Vt.) 1866-1928, 1880-01-09

SECRETARY SHERMAN, in letter to Sena-
tor Morrill,, which has been given to the pub
lie, sets forth the facts, which make it ad-
visable that authority should he given by
Congress TO refund at per cent. all the
bonds which become redeemable before
July l, 1881. The Secretary points out that
the remarkable success which has attended
refunding up to the present time has been
due TO the exceptionally favorable state
of our foreign and home trade and the re-
sumption of specie payments and express
ses his 'firm belief that our wiscsi course Is
to fund the remainder of the bonds bearinga
high rate of interest while this state of affairs
continues" lie is very emphatic in his ex-
preston of opinion that the bill OF Fernando
Wood, limiting interest on all future refund
ing bonds TO 81 per cent, would be 'fatal to
refunding" The closing portion of the let
ter is as follows:
Our per cent Consols, now having 2S
years to run, were worth, during the first
half of this month, 1Oal net, nj which price
they yield to the investor (to carry to ma
turity) 1856 per cent. per annum y 30
years 81 per cent. bond, to yield the same
income, would have to be purchased at
S93. 20. Again, a per cent. bond. to yield
but 81 per cent per annum. would have 10
he purchased at 10S.SS. With small sup
ply in the market the great bulk of them
having been absorbed as permanent invest
ments-thc per cent bonds are now selling
for nearly the best price ever obtained for
them, but it is not probable that this price
can be fully maintained against an additional
issue of any large amount, and | would re-
mind you that during the last reiunding
operations sales of these bonds had to be
suspended more than once owing TO derange
ments in the money market and the lniav-
orabe state of the exchanges, these causing
the bonds TO fall below par, at one time to
gS per cent Fortunately these derange-
ments were but temporary, and after more
or less delay the department was able TO re-
sume sales As before stated, think the
present an exceptionally favorable time Tor
the refunding, and | am satisfied that the D
per cent. and 6 per cent. bonds, so soon TO
become redeemable. cannot be 50 safely and
so protitably provided for in any other man
ncr. The very large amount TO he refunded
prior to July ., 1SS1-nearly $500, ,OOO, ,OW-
is considerably in excess of the amount re-
funded in any one year since refunding
began, and respectfully submit that the
time now available is none too great for the
purpose.
The passage of the bill introduced by
Yourself in the Senate and by Gen. Garfield
in the House of Representatives will, be-
lieve, enable the department to refund the
entire amount prior to the maturity oi the
bonds, but if it should not result in speedily
refunding the whole Of them. that clause OF
the bill which renders applicable the pro
visions of the act of July IA, 1870, etc, will
enable the department to cali such . per
cent. and q per cent. bonds, after they shall
have matured, and TO redeem them with the
proceeds of the sale of the 4 per cent. bonds
81 authorized, and such proceeds would IN
clude, of course, whatever premium the
bonds may then sell for. While ii is not
thought safe to assume that, upon resumins
funding operations, with the prospect OF an
emission of 4 per cents about equal IN
amount to the present ISSUE the bonds Will
remain ut price much, if any, above par, 1t
is thought that under the operation OF the
proposed bill parties may he induced TO sur
render the bonds now held by them upon the
payment of an amount not TO exceed the
difference in interest between the bonds re-
ceived and those issued.
Very respectfully, JoHN SHERMAN.