New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1881-01-29
THE SECaErfRY md REFUNDIYG.

Secretary Sherman's reasons for opposing the
Three Per Cent bill seem to have produced
crusidt rablc impression upon legislators. IL
i, now tlought that 10 funding lii
will be passed, unless it be one accord
hg in tie main with his recommendations.
Perhaps If there is TO be an extra session ter
other reasons. it might be wiscst to proven;
the passage OF any such measure aS Is likely
to be adopted by this Congress. The prob
ability is strong that a more rational view Of
the matter will be taken by the members
elected last fail.
While the opinions of Secretary Sherman are
entitled 10 great consideration and weight, it
is evident that he crrs. if at all, III the dircc-
ton Of too great hopeiulncss. There is not
little doubt, among competent bankers, whether
the Government would be able to sell ut par
even the securities III regard to which Dir.
sherman expresses himself hopefully unless
the bill authorizing their issue should be m0dl-
fed also in other important respects. As
to the three per cent Treasury notes,
it is possible that Mr.. Sherman may
not have fully considered some of the
difficulties OF dangers in the way. AT all
vents, it is dc sirable that attention should be
called to them, so that they may be fully cX-
anined before any final aciIon is taken.
Bonds bearing only $40 per cent interest
could no doubt be sold, if other provisions of
the law We're satisfactory. But the pending
bill does not specify in what sort of money
either the principal or the interest of the
bonds shall he paid. mere change of the
rate of interest from 3 TO gig per cent would
leave il possible to pay either principal, inter-
est or bOth III deprecated paper or IN silver.
The Secretary of the Treasury for four years
to come, we may be sure. will not be disposed
to tamper with the public credit. But he
who buys a bond of the United States does
not want to stake part of his money upon the
success of a particular party for ten years TO
come. If the Government retains the op-
ton of paying either paper, silver or
gold, there can be no certainty that a
future Congress may not require the
Secretary TO pay in greenbacks, or Ill any new
form of paper that it may make legal ten
der. The four per cent bonds were not sold
with any such uncertainty hanging over them
Nor would it have been possible to place these
bonds mt par, if it had been supposed that
payment In coin or in paper, in good paper or
bad, would depend upon the accidental major
ity in any Congress.
The four per cent bonds were sold because
the banks found 1t advantageous 10 take them
largely. But it would not have seemed to
them advantageous or desirable, had the pro-
visions respecting the banks been such as are
found in the pending bill With the utmost
freedom to retire or increase their circulation
at pleasure and promptly, the banks have de-
clined to take as many bonds, or to issue as
much circulation within $4,000, 900. as their
present capital warranted. Ii they are TO be
deprived Of that freedom to retire or expand
circulation. according to the varying needs of
business, it may be doubted whether still
larger proportion Of them will not refuse
to take three and a half per cent bonds,
and the effect of such refusal
would be contraction of the circulation.
That contraction might arrest the sale of
bonds which would otherwise have proved
acceptable.
the issue Of three per cent Treasury notes in