The Portland daily press. [volume] (Portland, Me.) 1862-1921, 1881-08-13
THE WINDOWS.
Secretary Window Explains and
Defends at Length.
His Bold Stroke Of Policy in placing
the New Bonds.

the New Bonds.
The following is Secretary WindoIn's letter
to the bankers convention. The address was
read by Secretary Randolph, Mr.. Window be-
ing unable to be present on account of the
critical condition of the President:
TREASURY DEPARTMENT, OFFICE OF THE !
SECRETARY, WASHINGTON, ID. G. August 8. !
George Marsland, Corresponding Secretary
American Bankers Association, Niagara
Falls, n. Y:
SIR-I have to acknowledge the receipt OF
your letter of June so, 1881. inviting me to be
present at the annual convention of your asso-
citation, to be held at Niagara Falls the 10th,
18th and 18th inst, aud to give to the conven-
tion sketch of the funding operations of the
government since the incoming of the present
administration. I regret that circumstances
will not permit me to accept your invitation to
be present; and as the funding operations to
which you refer are not quite completed, no
precise statement Of the transaction can
yet be given. 1t may be stated,
duties OF my present position in March last l
found that of
THE BONDED INDEBTEDNESS OF THE GOVERN
MENT,
there were of 5 per cent. bonds redeemable at
the option of the government after May 1, 81,
the amount of $3.50 800 $50, of which S146, ,101,-
900 was represented by coupon bonds; and of
6 per cent. bonds, redeemable at the option of
the government after July l, 1881, the amount
of 500, ,266, $50, of which $45, ,391 600 were rep
resented by coupon bonds. Only the coupons
for the quarterly interest falling due May l,
1881, remained upon the coupon 5 per cents,
and none upon the coupon 6 per cents. The
next semi-annual interest ON this would fall
due July 1, 1881. The refundng act, by which
it was proDosed to retire all OF these bonds,
and issue there for bonds bearing lower rate
of interest with several years to run before the
government had the option of payment. After
having received much consideration by Con-
gress during 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
S104, ,662, 200 per cent. bonds, being part of
those authorized by the act of July IA, 1870,
and January 20, 1871, and remaining unissued.
These resources were not sufficient to provide
for all the maturing bonds; and ewing to the
length of time which per cent. bonds had to
run before maturity, it was not deemed adviS-
able to issue more of the loan if such issue
could well be avoided. While there was no
! imperative necessity for providing for the reg
istered bonds of the maturing loans
SOME PLAN WAS NEEDED
to meet the interest payments on the coupon
bonds, and there seemed to be 10 practicable
method of meeting these payments 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 the calling of
an extra session of Congress, which seemed to
be the only other alternative, the plan was
matured which has been put into operation,
and has proved successful. Under this plan,
on April II, there was called for absolute pay
ment on July 1, 1881, the small loan of
$688, 200, bearing 6 per cent. interest, and
known as the Oregon war debt, and at the
same time for payment on the same date of
the per cent loans of the acts OF July II and
August 8, 1861, amounting to $140544 $50, aud
OF the act of March 3, 1863, amounting to
S55, ,145, ,750. But to the holders of the bonds
of the two latter loans permission was given to
have their bonds continued at the pleasure of
the government with interest at the rate of 81
per centum per annum, provided they should
so request; and the bonds should be received
by the treasury for that purpose on or before
May 10. 1881; and in place of coupon bonds,
registered stock OF the same loan should be is
sued therefor. The per. cent. bonds to be
continued were promptly received III q large
amount, and new registered ones issued there
for, with the fact Of their eontin1 ance
stamped on their face. But it was subsequent
ly deemed advisable to extend the time for
the receipt Of old bonds to May 20, 1881. It
was also found that foreign holders of the per
cent. bonds were inclined to dispose of these in
vestments rather than send them to the treasury
for exchange; and the immediate payment of
so many bonds abroad being likely to cause
drain of coin from the country aud to disturb
business an agency for exchange OF the bonds
in London was established. This plan for con-
tinuing the 6s
HAS PROVED ENTIRELY SATISFACTORY
there having been presented in due time for
continuance, at 81 per cent. interest, the
amount Of $17S, ,055, ,150, leaving to be paid off
from TIE surplus revenues, 24,211 400, for
which the treasury had ample resources, hav-
ing succeeded in dsposing Of the per cents
On May 12 the department gave notice that
the coupon bonds of the loan Of July Il, 1870,
and January 20, 1871, would be paid on July
1881, with like privilege of continuing bonds
at 81 per cent. to such of the holders as might
request; and at the same time the treasury Of
fered to receive for continuance in like manner
any of the uncalled registered bonds of that
loan to an amount not exceeding $3.50 000, COO.
The remainder of the loan was reserved with
view Of its payment from the surplus reve-
nues. The continued 81 per cent bonds hav-
ing q market price slightly above par the per
cents, in question were rapidly presented, and
it became necessary 10 extend for some time
the limit fixed for the amount of registered
bonds to accept for continuance. On July 1 a
notice for the payment on October 1, 1881, Of
the registered fves not continued was given,
and the resources of the treasury will be ample
to meet their payment.
The transactions concerning the per cents.
are, as before stated. not quite complete. Prob
ably there will be continued in all about $780,
100000 of this loan, leaving to be paid, $780,
70S.O50, the remainder of the loan having al
ready been paid from the surplus revenues
under calls previously made. BY this plan the
department has been not only relieved from
the embarrassment for providing for the pay
ment of the coupon interest, but has reduced
all the and 5 per cent. loans Of the govern
ment to
A LOAN PAYABLE AT THE OPTION OF THE Gov
ERNMENT.
and bearing interest at only 81 per cent per
| annum; and this with the trifling expenses to
the government of preparing of new registered
bonds and Of paying the actual expenses OF the
London agency, at which only three persons
have been employed for few weeks Issuing
about $44 SOC, ,000 of the continued bonds. The
saving to the government through the contnu-
| ance of these bonds is very gratifying On the
| 6 per cent. continued, the annual saving here
| after in interest will be 81 45l ,37S75; on the
per cent, assuming $400000,000 10 be con-
| tinued, the annual saving will be about $780,
| 600, making total annual saving hereafter in
the interest of the public debt of S10 451 37S75.
| Meanwhile from March to October L. 1881,
when these operations will have been completed
| there will be paid of per cents. S24.2l1 400,
| of 8 per cents, 500, 800, $780, making an addi-
| tonal annual saving in interest Of S491, ,7i6 80
total reduction OF the interest charge in seven
| months of S15 ,370 O95.25. In other words, the
1881, $40 Si5, $780, will be, October l, 1881, as
nearly as can now be stated SCI, ,475, ,S42 25
| This saving in interest can hereafter be applied
| to the reduction Of the debt, thus reducing Il
| and the burdens arising therefrom more rapid.
| 1y than heretofore. Yours truly
WILLIAM WINDoM.