Daily globe. [volume] (St. Paul, Minn.) 1878-1884, 1881-08-12

NIAGARA FALLS, Aug. 1.-THE bankers
resumed there session to-day promptly at the
morning hour. Thomas Henry, of Mobile,
presiding chairman, made humorous speech
and the Rev. j. 8. Bacon offered prayer, clos
ing with an earnest duplication for the re-
covery of President Garfield. The first paper
read was that on "Governmnt Finances" by
Secretary Window. 1t was read by the seere-
| tary of the association and was as follows:
SECRETARY WINDOWS LETTER.
TREAsURY DEPARTMENT., OFFICE
OFTHE SECRETARY OF THE TREAeURY,
WASHINGTON, D. c., Aug. y, 1881. }
Geo. Marsland, Corresponding Secretary ol
the Bankers Association, New York:
SIR: have to acknowledge receipt of your
letter of June 80, 1881, inviting me to be pres
ent at the annual convention of your associa.
tion, to be held at Niagara Falls the 10th
18th and 18th inst, to give to the convention
sketch 20 Of the funding s,na. 9pe
present administration. regret that circum.
stances will not permit me to accept your in.
vitatIon to be present, and as the funding ope.
rations to which you refer are not quite COM
pleted, no precise statement of transactions
can yet be given. It may be stated, however,
that when / entered on the duties of my pres
ent position in March last, fOuad that OF the
bonded indebtedness OF the government, there
were per cent. bonds redeemable at the option
of government after May !, 1881, to the amount
of $146, ,9S2, $50, of which amount $40, lOl, ,9OO
were represented by coupon bonds, and Of
per cent. bonds, redeemable at the option of
the government after July 1, 1881, the amount
of $202, ,266, $50, of which $45,391 900 were
represented by coupon bonds, only the
coupons for quarterly interest falling due
May 1, 1881, the remainder on coupons
of 5 per cent. and none upon
coupon per cent, the next semi-annual
interest on which would fall due July l, 1881:
The refunding act by which it was proposed
to retire all these bonds, and to issue therefor
bonds bearing lower interest with several
years to run before the government had the
option of payment, after having received
much consideration by Congress dur
ing the last session had failed
to become law, and the only resources of the
government to meet the maturing obligations
were the surplus revenues and the amount OF
SIC, ,652 200 of per cent. bonds, being part OF
those authorized by act of July Il, 1870 and
January 20, 1871, and remaining unused.
These resources were not sufficient to provide
for all maturing bonds, and owing TO the length
of time which such per cent.
bonds had to run before maturity, it was not
deemed advisable to issue more OF the loan II
such issue could be avoided. While there
was no imperitive necessity for providing for
the registered bonds OF the maturing loans,
some plan was needed to meet the interest pay
ments on coupon bonds, and there seemed to
be no practicable method of meeting the pay
ments without considerable expense to the
government as well as to the holders OF the
bonds. Finally, to meet the demand OF the
public creditors, and at the same time to avoid
calling an extra session of Congress.
which seemed to be the only other alteraa
tive, the plan was matured which has been
put into operation, and has proved successful:
Under this plan, on April IL there was called
for absolute payment July l, 1881, the small
loan of $6SS, 200, being 6 per cent, and known
as the Oregon war debt, and at the same time
for payment on the same date 8 per cent. loans
of the acts of July II and Aug. s, 1861,
amounting to $14O,544,650, and
the act of March 8, 1852, amounting
to $555, ,145, $50, but to the holders Of bonds of
the two latter loans permission to have their
bonds continued at the pleasure OF the gov
ernment with interest at 3A per cent. per an
mum, provided they should so request and the
bonds should be received by the treasury for
that purpose on or before the 10th day OF May,
1881, and in case of coupon bonds, registered
stock for the same should be issued therefore.
per cent bonds to be continued were prompt
ly received in large amount and new register
ed ones issued therefore with the fact
of their continuance stamped on their face,
but it was subsequently believed advisable to
extend the time for the receipt OF old bonds to
May 20, 1881. 1t was also found that foreign
holders Of s per cent. bonds were inclined to
dispose of their investments rather than send
them to the treasury for exchange,
and the immediate payment Of
SO many bonds abroad very likely
to cause a drain of coin from this country and
to disturb business, an agency for exchange OF
bonds in London was established. This plan
for continuing the 6s has proved entirely sat-
isfactory, these having been presented IN due
time for continuance at per cent % interest
the the tn amount be OF o.js oa sov som
the the surplus revenue ss4,211, 400 for which
the treasury has ample resources. Having
succeeded in disposing of the per cents,
May 10, the department gave notice that
coupon bonds of the loan of July Ia, 1870,
and January 81, 1871, would be paid on July
1, 1881, with like privilege of continuing the
bonds at 31H per cent, as such OF the holders
as might request, and at the same
time the treasury offered to receive for
continuance in like manner any OF the un-
called registered bonds of that loan to an
amount exceeding $3.50, ,00O, 600, }he remainder
of the loan being reserveu with a view to its
payment from the surplus revenues. The
continued sX per cent. bonds having mar
ket price slightly above par, the
S per cents. in question were regu-
larly presented, and it became neces-
| sary to extend somewhat the limit fixed
for the amount of registered bonds to be re-
ceipted for continuance on July l, notice for
| the payment on Oct l, 1881, of registered 5s
not continued was given, and the resources OF
the treasury will be ample to meet their pay.
ment. The transactions concerning the 8
per cents are, as before stated, not quite CON-
pleted. Probably there will be contin-
ued In all about $A4, 100000 OF
this loan, leaving to be paid
$39, ,708, ,O50, the remainder of the loan having
already been paid from the surplus revenues
under calls previously made. By this plan the
| department has been not only relieved from
| embarrassment for the payment of coupon in
terest, but has reduced all 6 and 5 per cent
loans of the government to loan payable al
the option of the government and
bearing interest at only So per cent. per
annum, and this with the trihing expense
to the government of preparing new register
ed bonds and of paying the actual expenses OF
the London agency, at which only three per-
sons have been employed for a few weeks, is
suing about $44 ,500, 600 of continued bonds.
| The saving to the government through con-
/ tinuance Of these bonds is very gratifying,
/ On 6 per cent continued the annual saving