New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1881-01-10
DEBATING HEFUNUING.

Tho discussion in the House on Saturday
did not Justify increased hopefulncss in re-
spect 70 the passage of good Funding bill.
| Very strong reasons were given for the belief
! that CONGRESS- had better do nothing than to
| pass the pending three per cent bill, II 1t could
be carried into full effect, because 1t would
cause q violent contraction OF the bank circu-
| lation, and consequent industrial and CONNER
| cial disasters. The notion of many members
of Congress is that additional issues of green
| backs or silver notes will take the place OF
! bank circulation that may be surrendered
But a further issue OF grcennaCkS Is
prohibited by solemn pledges OF public faith
and any bill to that effect would be vetoed
ny President Hayes or Plcsident-c!cct Garfield
| Further issues OF silver notes are rOw possible
oniy to tnc amount Of thc silver dollars i'll the
Treasury not already Represented by such
notes outstanding. The standard dollars now
amount to SIS. 19O,51S. and the silver notes
| in actual circulation to $50, 12T11l, so tlat
| NV &i2.062 S07 more silver notes could
| row he issred-an amount little greater than
vas added to the circulation i'll December
alone. Tie only possible increase that Ir-
main. is at the rate of about {;2,00O,000
per month. in place of SILVER dollirs c0"cd,
|
| into circulation. Thus it i not possible to aid
more than about so 10000 TO the clrcula-
tiou within six months either OF silver dollars
or Of paper But tn" strongest reasons 'N-
! ist 1or the belief That thr N,tionll banks
which now hold $;209, 100000 OF five and SIX
me- cent bonds on deposit for circulation,
would retire more than half thlt amount Of
notes within six months, If tcrccd to choose
between taxed circulation based on three per
| cent bonds anC no circulation Ii would suit
| some money TENDERS and some Spt CuldtOr7. 10
! 0oubt, to have contraction of T13,OOo,O0O
or more before July 1. But the Consequences
wouli not suit members OF Congress who
cause them by their votes.
The debate also brought to light the strong
est possb!c reasons for believing that three
per cent BOMBS cannot be sold at par. The
tables submitted by General Ha@l2y, con-
elusive as they are, do not cover the strongest
Dart of the case. The iourand four and a half pcr
cent bonds do not now sell, aud at 10 time lave
! sold, at such prices az to return only 3 per
cent on the investment. But that is not all
The recent prices have been largely the result
of speculative manipulation. All we'll
informed persons know that this is the
| fact. Many are aware, too, that the
| most powerful speculative combination
ever formed in Wall Street has been
| straining every nerve for months to keep the
rate of interest low. and to make the succ;S
| of a three per cent rcfundiug bill appear prob
| able. in order to secure higher prices for
500. 600, 900 of four per cents held by Mr.. Van
| derbilt. and for more than 1900. 900 shares
Of stock ut one time held by tho combination.
There is nothing out Of the way in all this.
considered as shrewd and successful Wall Street
| strategy. BIT there is no reason why Con-
| cress should he deceived by it.
Bonds sell at 1924 ut present, because tn G
demand is large and the supply peculiarly
| limited by the speculative movement. But
! Congress has to consider, first, what four per
cent bonds would bring if $GOO,00O,00O Of
| them should suddenly be offered. Does not
every sensible man perceive that the price
would be much lower? Yet this Is the ptac-
teal test upon which must depend decision
as to the possibility of selling OO,OOO,OOO
three per cents. Even British three per cent con-
sols, now selling at 1885, would inevitably drop
! al once if only $1O0 000,O 900 ncw bonds OF that
| class were offered, as surely rs the price
of wheat would drop if 100000, 900 bushels
could be unexpectedly added to the amount
for sale. There is not single intelligent
business man on either side OF the ocean, it is
safe to say, who would not instantly anticipate
serious fall in consols if new supply of
| 5000, 100000 were offered, or i'll tour per
cent bonds if the same amount should be
newly issued. The price ut which 5000, 00O,0 900
ew three per cents can be sold must be
! Judged, not from the present price of cOrsols
or four per cents after nearly all have been
absorbed or locked up, but from the price ut
which such bonds would probably sell if q
new issue of them were thrown upon the
| market.
1t is said however, that the four per cents
| did SELL demand for them being created by
| the retirement of other bonds, and that the