Savannah morning news. [volume] (Savannah) 1868-1887, 1881-02-22
The Refundiuw BIN.

Inc keiundlng Bill.
On Thursday last the refunding bill,
which has been before Congress for some
time past, and which had already passed
the House, passed the Senate with some
immaterial amendments, after quite
struggle over the measure in that body.
As it came from the House the bill pro-
vided for refunding bonds and Treasury
certificates bearing three per cent. inter
est. and required that national banks
should deposit the new bonds in
the Treasury as security for their
circulation. Both these clauses met with
much opposition in the Senate. Regard
ing the first, several members, Mr.. Bay.
ard among them, agreed with Secretary
Sherman, that there was danger that
three per cent. bond could not be aoated
at par, and argued that it would be bet
ter for the government to take no risks.
but to make the rate of interest three
and half per cent while in regard to
the second, it was contended, and quite
strenuously, that it would be bad policy
to force the national banks to base their
circulation on these bonds. TIE Senate
Finance Committee was of this opinion,
and struck the clause obligating the banks
to that course from the bill, on the
ground that the banks could not afford
to issue notes to the required extent,
based on bonds bearing so low rate of
interest, and that a serious contraction
of the currency would follow. The Sem
ate, however, did not agree with either
of these views, and insisted on retaining
both these original features In the bill.
The amendments adopted by the SEN
ate are very unimportant. The House
bill required that the government should
have the option of redeeming the bonds
at any time after five and up to ten years
from the date of their issue, and the
Senate increased the option to twenty
years. An amendment was also adopted
to the effect that the Secretary of
the Treasury should give the people
an opportunity to invest in the bonds,
and for this purpose it was provided
that they must be offered all over the
country for thirty days before any con-
tracts with syndicates can take effect.
These are the principal changes in the
bill. They are entirely immaterial, and
doubtless the House will promptly coin
side lir them, Mr.. Hayes will probably
speedily sign the bill, and it viii soon
become a law.
Whether or not this three rAr cent.
bond can be floated at par, -
or not the national banks will reduce
their circulation so as TO create serious
contraction of the currency, are matters
which only experience can determine.
AS tc the first, the country never has en-
ioyed, and probably never viii enjoy
again better opportunity for funding
the $637, $50. 900 of bonds, now bear
ing and 6 per cent. interest,
and which mature after May and June
next, at low rate. As Mr.. Bayard,
-N~"e' ating 81 per cent. bond ad-
mitted, we are hSlsessed with great plenty
and unexceptionably good credit Under
these circumstances, if any per cent.
bonds can be hoated at par at all, this
government can do so, and even the
N~sa 11 of -of, Cd hot
it was possible. As to the second,
opinions greatly differ. Some financial
authorities claim that the amount of ma
tionsl bank notes which will be with
drawn from circulation will reach $780,
900, 900. If so, it will doubtless be seri-
ously felt, but, in the opinion of the
House and Senate, as we'll as of great
many others in the country. the threat
of the banks to withdraw their circula-
ton was very much in the nature Of an
effort to brighten the Senate into
determining on 81 per cent. bond, and
the banks will find it to their inter.
est TO keep up the volume of currency
under existing regulations. Should it
prove otherwise, however additional
fnapcial legislation may be required, and
it may even become necessary to place
the government beyond the power of the
banks altogether.
This refunding act is last effort on
the part of the present Democratic Con-
gress to save millions of dollars per
annum to the country. Therefore,
whether it accomplishes all that is ex-
pected of it or not, it is worthy OF ex-
pertinent, and the Congress which pass
ed it are worthy of popular commenda-
ton.