New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1881-02-07
THE SENATE REFUNDING B!LL.


| in spirit, purpose and practical effect it is il
new bill. The House passed a bill "To pre-
vent rcfunding OF the public debt. to worry
- the National banks, and to cause panic.
The Senate has before it a bill to refund the
| public debt.
The Committee deserves credit for the prcpa-
ration of this bill. 1t is true. most OF the
changes madr were recommended by Secretary
Sherman and Controller Knox. But the Com
mttee deserves credit for having recognized
| the fact that the suggestions made were wise.
| In at least one matter of some importance the
| action of the Committee improves upon the
recommendation of the Secretary, for he spoke
quite encOurlglngly as to the possibility OF
floating three per cent short-tcrm notes, whiIc
maintaining that three per cent bonds could
NOT he sold. But the Committee has wisely
nronoscd to give him power to Issue notes
bearing not less than 3l2 per cent interest.
II does not seem probable that three per cent
NOTE, in any large amount could have been soli
without causing such a withdrawal Of de-
po,its from savings banks ia must have dis
turhcd the money market, ana seriously IN
tprferrd with the desired sale of bonds. As
the bill does not authorize Salc OF more
than 800 OOO, 900 bonds, while the debt to
be refunded amounts to SG1l, 2O1O5O, the
Treasury must rely upon sale Of nrar'y
S211 O0O. 900 notes, less such sum ~ 1t may
he able to apply from lis su OiuS revenue, or
temporarily from its bullion fund. Ii is OF
vital importance. thclcforr, that the notes
offered shall be such ~ will he taken without
doubt or hesitation. For, if there Is Il doubt
at the outset whether a sufficient number OF
notes will be taken To retire all tae bonds
which become Icdccmth'e. holders may hc
slow in coming forward hoping that their
bonds may be Of the number which my finally
escape redemption for year "r two. In tins
way doubt among holders ~ to the Success
of some Fart of the operation might cause
hesitation and delay as to any part.
The form of bonds proposed is probably the
best 10 which the assent OF Congress can now
be obtained. Investors, in bidding for the
proposed three and half per cents, viii be-
likely to take into consideration the tact that
part Of the new bonds may not be redeemed
within more than fifteen years. If the surplus
revenue should not exceed $4,000, 600 II
wear, only 5000, 100000 ont OF the
SG1O. OO0 900 of new bonds aud notes could
be retired before the fnul aud half per
cents become rcdccmahle in 1891, aud after
that date it would obviously bc more advan-
tagcous to expcmd the surplus in cxinguiShng
the debt of the latter class. Indeed, prc-ump-
ton that a. much ~ $4,000. 900 yearly can be
paid is one not at all warranted by facts,
until something has been done to stop the
great leak IN the Treasury which the Pension
Arrears bill has opened. The House bill was
particularly Objectionable, therefore. in making
the proposed new bonds mat re in the very
same year in which the four nd half pr
cents will berom" rcdrcmabIe. The change to
the familiar "iiye-twcnty' form has every
thing to recommend it, and involves no pos
sibc Inconvenience to the Government.
Another change of great practical mport-
ance is the allowance of q per cent for
expenses. The statement submitted by Mr..
Sherman to the Committee shows that the en-
tire expense of issuing the fOur per cent loan
of $40, S47. 800 was So, CAS-, SO2 60, or thirty
five hundTedls of one per cent, divided AS fol-
lows: $3SG.3G9 SO. or five hundrcdths of one
per cent, III commissions to the Syndicate;
81, 1868, 523 20, or eleven hundredths of one
per cent, III commissions to all other persons
under the circulars; and S695, 9O9 81. or nine
hundrcdths OF one per cent, in expenses of
engraving. printing, transporting aud employ
ing extra force. No other loan ever was
placed rs chcapy, and the marvellous randi
ity with which 1t was placed was entirely due
to the commissions Ivy which the Government
was enabled to induce competent parties to
secure subscriptions.
But the most important change in the bill
change which deprives it of lis most peril
GUS feature-is the exclusion of the bank
plunderng section. In all the discussion of
the subject before the COMMITTEES. neither
Secretary Sherman nor Controller KYox mp
Taycd az strongly as they might have done
the dangers to which this section would hnyc
exposed the country. Senator Wallace and
Senator Beck talked ignorantly of Thanking a
compulsory market for the bonds.u and of
Il" compelling the National banks to surrender
" the whole OF their bonds to take the thrrc nor
cents But the truth is that the Government
absolutely pOwerlcSs 10 pcrpctratc this bit of
highway robbery. No doubt many honest
men voted for the fifth section in n sincere
belief that circulation is valuable to fine
banks that they will not surrender it. even if
forced to take three per cent bonds. The
mistake of these gentlemen would have been
fatal to them and very costly to the country
had the bill passed in the form they favored.
Others, 10 doubt honestly. believed that th,.
banks might league together to make money
artlficially stringent by temporary surrender
of circulation, in order to defeat the issue
of three per cents, and sought to picyent
this by the fifth section. Their error il in
not seeing that $5O,OoO,OOO in legal
tenders or gold could DO thrown into the