Savannah morning news. [volume] (Savannah) 1868-1887, 1881-02-25
The Funding Bill.


The Funding Bill.
A great variety of opinions are being
expressed in regard to the probable effect
of the per cent funding bill upon the
currency of the country. Washington
dispatches say that there is noticeable
change of sentiment in that city both as
to the ability of the government to float a
8 per cent bond at par, and as to the seri-
Gus contraction of the currency threat
ened by the withdrawal of the circula-
ton of the national banks. Many OF
those who, previous to the passage
of the bill, advocated g 81 per
cent. bond, now say that they believe
the per cents. can be sold at par, and
it is stated that some of the best inform
ed Treasury officials coincide in this
opinion. 1t is also beginning TO be gen
orally believed that even withdrawal OF
national bank circulation will not create
a contraction of the currency, and that
the action of the banks has been taken
simply with the view Of frightening Con-
gress into adopting a bond bearing the
highest rate of interest possible to be Sc
cured.
Many very plausible, and we believe
sound, arguments are adduced to sustain
this opinion. In the first place, the terms
of the bill itself will be likely to prevent
any serious contraction 1t is pro-
vided therein that no bank can
carry out the threat to stop
its circulation until it has deposited with
the Treasurer legal tenders sufficient to
redeem its notes, and as a majority of
the notes of each bank are in circulation
all over the country, and are largely held
by private parties, no bank can get pos
session of its notes for considerable pc
Rod of time. This of itself, it is evident,
must delay the dreaded contraction.
In the next place, it is very generally
believed that so far from contracting the
currency, the first effect of the refund
ing law will be imitation. The $780,
900, 600 Of 8 per cent. certificates pro
vided for by the bill will, in all proba
bnity, at first, and until the approach Of
the period for the collection
OF the interest due on them,
enter into the currency, and will
not only take the place Of the Withdrawn
national bank notes, but will be circu-
lated much more rapidly than the bank
notes can be withdrawn. This will pre-
vent the loss of the notes from being
felt. and ss it is proposed to apply $75,-
OO0. 900 per annum of the surplus reve-
nue. of the government TO the redemption
of these certificates after the first year,
the volume of currency viii thus be pre-
vented from being seriously lessened.
In the next place the 4th section Of
the bill, which provides that the Secre-
tary of the Treasury may expend not to
exceed $50, 00O, 900 of the standard gold
and silver coin in the Treasury for the
redemption of the maturing bonds. if he
thinks it necessary to do so. will prove
the greatest safeguard against any i'm
mediate contraction. In case the new
bonds are not taken up with sufficient
rapidity to enable their proceeds to be
readily applied to the payment OF the
maturing 5's and 6's, this provision will
materially enable the old bonds to be
taken up, and the sums expended upon
their redemption will, of course, imme-
diately enter into the currency of the
country.
We regard all these positions as sound,
and believe that in very short time the
new loan will be fairly under way,
and the fears occasioned by the threats
Of the national banks will have subsidized.
II. however, the banks can successfully
contract the currency, as they allege, it
will, in the end, prove disastrous to
them The people cannot, and will not,
consent to maintaining any institution
which, by concentrating its strength. can
at any time have it in its power to clog
the wheels of commerce, and involve
the country in a disastrous monetary
panic. The banks naturally want
high rate of interest for their bonds, but
the people, who are taxed to pay that
interest, want it as light as possible, and
the banks must yield to the people or
cease to exist.
The House Committee of Ways and
Means evidently do not fear the evil ef
fects which have been predicted by the
banks and their friends as to the result
of the passage of this bill, for by this
mornings dispatches we are informed
that they have adopted the Senate's
amendments and will report the
bill favorably to the House.
1t is not likely that Mr..
Hayes will take the responsibility Of in
terposing his veto to the measure, since
he will probably prefer to let the merits
of the law be tested by experience. If
it succeeds, as it most likely will, it will
reflect great credit upon the Democratic
party, for it is generally conceded to be