New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1881-01-04
REFUNDING MEASURES.
LACK OF CONFIDENCE IN THE HOUSE COMMITTEES
BILL-MONEY WORTH MORE THAN PER CENr-
SECRETARY sHERNAN's RECOMMENDATIONS


BrLL-MONEY WORTH MORE THAN PER cENr-
SECRETARY sHERMAN's RECOMMENDATIONS.
BY TELEGRAPH TO THE TRBUNE
WASHINGTON, Jan "a correspondent Of THE
TRIBUNE conversed briefly to-day with the Secretary
of the Treasury and with number of other officials
OF the Department whose opinions best worth
knowing, and learned that no one there really ex-
pects that refunding operations will be mate
rally forwarded by the passage Of the pending Re
funding BILL unless it is materially amended. Sec
retary Sherman SAID he did not like to interfere in
the matter further than to secure If possible to his
successor law that will undoubtedly he a success.
My opinions continued the Secretary, :" have
been asked BY many members Of Congress, and
have advised them in all to vote for the meas
ure IN the best form in which it can be passed in
the House OF Representatives with view to amend
ment in the Senate aud fuller discussion there of
the details of the bill. l have seen no reason to
change tho opinions expressed in my annual re-
port
A careful computation, based upon the mar
ket price of United States securities, shows
that the borrowing power Of the Govern
ment haS never yet reached so favorable n
point as three per cent. To-day the prices give an
average annual interest yield to the investor of
three and quarter per cent At their present price
the four per cent consols pay three and thrty-one
buHdrrdths per cent per annum and they will have
to sell for more than one hundred and nineteen
before they will pay little as three per cent. At
the preseu ruling prices three per cents having the
same time to run tnat the four per cents have would
command only "a cents.
Tue Treasury Note feature of the bill. sup
ported by the Committee of Ways and Means bears
very little resemblance to tho carefully maturcd
recommendations OF the Secretary of the Treasury.
The Secretary proposed that Congress should
authorize tic issue of four hundred millions Of
Treasury notes, which would be substantially the
same as bonds, inasmuch as they were TO be in both
the registered and coupon form, to mature at diff
ferent periods within tho next ten years,
tho amount maturing in any one year
not 10 exceed the sinking fund for that year.
The Secretary woud thus have provided for about
three -foarths Of the redeemabe bonds estimating
the siraightout red mDuons during the coming year
with the anticipated surplus revenues at about
300 O0O. .OOO The Committee proposes 10 author
ize four hundred millions Of 3per cent notes redeem
able after one year and payable after ten years the
amnynt redeemed IN any year not to exceed
forty millions The feature Of greatest novelty
is contained IN the provision that the particulor
noes to be redeemed each year are 10
be determined by lot. The lottery system has
been found TO work well in some countries. where
loans are frequently placed at discount and whofO
in the annual drawings the chance OF drawing
prize-that is of having his bond drawn for pay
mrnt M paris lncOnsderable element in the cal
culatiOn of tae investor, It Is doubtful however,
IL the of the American people aud especially of
the investor classes. educated mp IN the ncetleS
OF lotteries rs Il feature of National finance.
10 prOvlCc for the remainder of The rcdeemable
per cent bonds the committees bill authorizes an
lssne of bonds to be- redccmable alter twenty years
and payable IN forty years. 1t ~ generally admit
ted that the security must be long one II II II IS
TO carry only csut interest, and this fact weak
ems faith IN the ability of tho Government to dis
of large an amount oil one TO ten-year three
per cents.
The failure to make any provision for rcfnnding
would cost the government about Sl1,OOO,OOO an
nualy but the pa sage of an lmprdcticabe refund
ing measure would IL is feared, have n more dam
aging effect. not only upon the finances OF tue Gov
crnment, but upon those of the country at large.
Secretary Shcrma,s plan possesses, lt i9 believed,
sufficient elasticity TO enable ths Treasury Depart
incut to command an ample success.