Lancaster daily intelligencer. [volume] (Lancaster, Pa.) 1864-1928, 1881-08-12

GOVERNMENT D0NDA
Secretary Wlndom's Letter . the Bsnkors'
TRKAsUsr DRARrnxf,
OFFICE OF THE s1CRErARY,
WASHINGTON, August 8, 1851. }
George Aarsla~d, Corresponding Secretary
Amsertcan Bankers Assoctation, Niagara
Fblls, N. +.
SIR have to acknowledge the receipt
of your letter of june 30, 1881, inviting me
to be present at the annual convention Of
your association, to be held at Niagara
Falls. tho tenth, eleventh and twelfth inst,
and to give to tho convention . sketch Of
the funding operations of the government
since tho incoming of the present admins
tration. l 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 transactions
can yet be given. It may be stated, how
ever, that when entered upon the duties
of my present position, in March
last, found that of the bond
ed indebtedness of the government,
there were of five per cent. bonds, re.
deemable at the option of tho government
after May l, 1881, the amount of $460,-
$40, $50. of which the amount of $146, 1O1,-
800 was represented by coupon bonds and
of six per cent. bonds, redeemable at tho
option of the government after July l.,
1881, the amount of $202, ,265, $50, of which
$45, 391 900 were represented by coupon
bonds. Only the coupons for the quarterly
interest falling due on May 1, 1881, re-
mained upon the coupon five Der cents.
and none upon the six per cents, the next
semi-annual interest on which would fall
due on July 1, 1881. Tho refunding act,
by which it was proposed to retire all of
these bonds and to issue therefor bonds
bearing a lower rate of interest. with sew.
eral years to run before tho government
had the option of payment, after having
received much consideration by Con
gress during the last session. had
failed to become law, and the
only resources of the government to
meet tho maturing obligations were the
surplus revenues and the amount of S1C4.
200 four per cent. bonds, being a mart
of those authorized by the acts of Jnlv IA
1870, and January 20, 1871, and remainino
unissued. These resources we're not .nf$
cient to provide for all the maturing bonds
and owing to the length of time which
such four per cent. bonds had to run bo.
fore maturity, it was not deemed advisable
10 issue more OF the loan if such issues
could we'll 6e avoided. While there was
NO imperative necessity of providing fol-
the registered bonds Of tho maturing loans,
some plan was needed to meet the interest
payments on the coupon bonds, and there
seemed to be no practical method of meet.
ing these payments without considerable
expense to the government as we'll as to
the holders of the bonds.
FINALLY, to meet tho demand of public
creditors and at the same time to avoid the
calnng OF an extra session of Congress,
which seemed to be the only other al.
ternative. the plan was matured which
mas Deem put into operation, and has
proved successfnll. Under this plan, on
April II there wascalled for an absolute
payment on July /, 1881, the small loan
OF $685. zoo, bearing 6 per cent. interest,
and known as the Oregon war debt, and
at the same time for payment on the
same date the six per cent. loan, acts OF
July ~ aud August 5, 1851. amounting
to S140,544,6 $50, and act of March s.
1868, amounting to $55, 145, 750; but to
the holders of the bonds of tho two latter
loans permission to have their bonds con-
tlnued at the pleasure of the government
with interest at the rate at three and one
half per centum per annum, provided that
should SO request, and the bonds should
be received by the treasury for that pur.
pose on or before the tenth day of NAV,
1881, and in case of coupon bonds, regis.
tered bonds of the same loan should he
issued therefor. The six per cent. bonds
to be continued were promptly received in
q large amount and new registered ones
issued therefor, with the fact of the con.
tinuance stamped upon their face. but il
was subsequently deemed advisable to
| extend the receipt of the old bonds to Nav
~, 1881. 1t was also found that foreign
holders of the six per cent. bonds were
inclined to dispose of the invest.
ments rather than to send them
to the treasury for exchange, and
the Immediate payment of SO many bonds
abroad being likely to cause drain Of
coin from this country and to disturb
business, an agency for the exchange ol
the bonds in London was established.
The plan for continuing the skies has
proved entirely satisfactory, there having
been presented in due time for continu.
| ance at three and a-half per cent. interest
the amount of SITS, ,055, $50, leaving to be
paid off from the surplus revenues $24..
I'll, 4OO, for which the treasury had ample
resourced. Having succeeded in disposine
Of the six per cents, on May 10 the de
partment gave notice that the coupon
bonds of the loan of July IA, 1870, and
January 20, 1871, would be paid on july
1, 1881, with like privilege of continuing
the bonds at three and a-half per cent. to
such of the holders as might request. and
at the same time the treasury offered ia
receive for continuance in like manner
all of tho uncalled registered bonds of
that loan to an amount not exceeding
$3.50, ,0OO, 900, the remainder of the loan
being reserved with view of its payment
from the surplus revenues.
Tho continued three and a.half per cent
bonds having market price slightly above
par, the five per cents in question were
rapidly presented, and it became necessary
TO extend somewhat the limit fixed for The
amount Of registered bonds to be accepted
for continuance. On July /, a notice for
the payment on October /, 1881, of the
registered fives not continued was eiven.
and the resources of the treasury will be
ample to meet their payments. The trans.
actions concerning the five per cents. are
as before stated, not quite completed /
prOhahlv khovo -sl1 In