The Evening critic. [volume] (Washington, D.C.) 1881-1885, 1881-08-11
THE NATIONAL DEBT.
TREASURY FUNDING OPERATIONS.

TREASURY FUNDING OPERATIONS.
Important letter and Explanation
OF Secretary wfndom-How the
Funding Operations were Carried
On,-Great Reduction I'm Interest
A Good Showing.
NIAGARA FALLS, Aug. 1.-THE follow
ing is Secretary WINDOWS letter to the
Bankers Convention:
TREASURY DEPARTMENT., I,la
OFFICE OF THE SECRETARY,
WASHINGTON, ID. c., Aug.S.
George Mdrsldnd, esq, corresponding Secretary
american Bankers Association, Niagara
Falls, N. y:
SIR have to acknowledge the receipt Of
your letter of June 80, 1881, inviting me to
be present at the annual convention of your
association, to be held at Niagara Falls the
10th, 18th and 10Th instant, and to give to
the convention sketch Of the funding op-
eratioDs of the Government since the in
coming of the present administration. re-
greet that circumstances will not permit me
to accept your invitation to be present, and,
as the funding operations to which you re-
fer are not quito completed, no precise state
ment of the transactions can yet be given.
1t may be stated, however, that when 1
entered upon the duties of my present posi-
tioh ia nAdhSh iooos hOuhu uhds VI thc
Bonded Indebtedness of the Govern.
ment
there were Of five per cent. bonds, redeem
able at the option of the Government after
May /, 1881, the amount of $469, 320,650 of
which amount $146, 101 800 was repre-
sented by coupon bonds, and Of six per
cent bonds redeemable at the option of the
Government after July /. 1881, the amount
was 5000, 266, $50, of which $45, 391, 900 were
represented by coupon bonds. Only the
coupons tor tho quarterly interest falling
due May 1. 1881, remained upon the coupon
five per cents. and none upon the coupon
six per cents, the next semi-annual inter-
est on which would fall due on July 1, 1881.
The Refunding Act
by which it was proposed to retire all Of
those bonds and to issue therefor bonds
bearing lower rate of interest, with sew
eral years to run, before the Government
had the option of payment. after having re-
ceived much consideration by Congress dur
ing the last session, had failed to become q
law, and the only resources of the Govern
ment to meet the maturing obligations were
the surplus revenues and the amount of
$104 ,652, 200 four per cent. bonds being
part of those authorized by acts of July IA,
1870, and January 20, 1871, and remaining
unissued. These resources were not sufIi-
and owing to the length of time which
such four per cent. bonds had to run before
maturity, it was not deemed advisable to
issue more of the loan, il such issue could
well be avoided. While there was no i'm
perative necessity for providing for the reg
istered bonds of the maturing loans, some
plan was needed to meet the interest pay
ment on the coupon bonds, and there seemed
to be no practical method of meeting these
payments without considerable expense to
the Government, as we'll as to the holders
of the bonds Finally, to meet
The Demand Of Public Creditors,
and at the same time avoid the calling of
an extra session of Congress, which seemed
to be the only other alternative, the plan
was matured which has been put into opera
tiOn and has proved successful. Under this
plan, on April IL, there was called for abso-
lutte payment on July /, 1881, the small
loan Of $685., 200 bearing 6 per cent. inter-
est, and known us the Oregon war debt, and
at the same time for payment on the same
date of the six per cent. loans under the
acts of July II and August 5, 1861, amount
. ing to $40, 544 $50, and the act of March 3,
1868, amounting to $50, 145,75O. But to hold
ers of the bonds of the two latter loans permits
sion was given to have their bonds contin-
ued at the pleasure Of the government, with
interest at the rate of 81 per cent. per an
nun, provided they should so request and
the bonds should be received by the Treas
ury for that purpose on or before the 10th
day of May, 1881; and in case of coupon
bonds, registered stock of same loan should
be issued therefor. The 6 per cent. bonds
to be continued were promptly received in
q large amount, and new registered ones
4. were issued therefor, with the fact of theil
continuance stamped upon their face but il
was subsequently deemed advisable to ex
tend the time for the receipt of the old
bond to May 20, 1861. 1t was also found
that $500
Foreign Holders OF the Six Pei
Cent.
bonds were inclined to dispose of their in
vestmcnts rather than send them to tn,
Treasury for exchange, and tho immediate
payment of SO many bonds abroad being
likely to cause drain of coin from thil
agency for exchange of bonds in London
was established. This plan for continuing
the SIS has proved entirely satisfactory
there having been presented in due tim'
terest, the amount Of $17s,O55 15(
leaving to be paid off from thu
surplus revenues $24211, 400 for which
the Treasury had ample resources. Having
succeeded in disposing of the six per cents
on May IL, the department gave notice ina
the coupon bonds of the loan of July IA
1870, and January 20, 1871, would be paid
on July l. 1881, with like privilege O.
continuing bonds at 81 per cent. to such o
? the holders as might request it, and at tn,
same time the Treasury offered to receiv,
for continuance, in like manner any o
the uncalled registered bonds of tina
loan to an amount not exceeding $3.50,
100000, the remainder of the LOAF
being reserved with a view of its paymen
from the surplus revenues. The continued
81 per cent. bonds basng marke
price slightly above par the per cents il
question were rapidly presented, and it sool
became necessary to extend somewhat tn
limit fixed for the amount of registere,
bonds to be accepted for continuance. Oh
July l, a notice for the payment on DC
- tober l. 1881, of the registered fives no
continued was given, and the resources o
the Treasury will be ample to meet thei
payment. The transactions
Concerning the Per Cents,
are, us before stated, not quite complet,
Probably there will be continued in a
about $400,000,0O0 of the loan, leaving to b
paid about 500, 70S050, the remainder Of tn
loan having already been paid from sun
plus revenues under calls previously mad
BY this plan the Department has been nC
only relieved from the embarrassment {