New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1881-01-20
THE FUNDING BILL IN CONGRESS,

A PROTEST AGAINST PER CENT BONDS.
EXPERIENCE OF GERMANY, FRANCE. ENGLAND AND
OTHER EUROPEAN coUNTRIEs-How 8 PER
CENT BONDS WOULD AFFECT THE NATIONAL
BANKS AND THE CURRENCY.
To the BdGtor OF rae Tribune
SIR: The proposition now pending in Con-
gress to fund the debt OF the United States upon which
the option Of the Government als dne the coming year.
at Of the many amazing financial heres;es
which the last few years have developed There arc
good many governments Ia the world whose permauency
income, accumulated wealth and financial status at
least equal to ours that have been able to borrow
money at anything like per cent. Admitting, how
ever our unexampled prosperity Tor the last years.
our great ana growing wealth. enormous production
Ofgran, cotton, tobacco and the preci0s metals and
the excess of exports Imports fair to
say that this wOndrOus Weakening up is not in degree
phenomenal
Is 1t wise to say that in the management Of q great
Government loan OF six eight hundred million dollars
the rate Of interest the Government afford pay
should be the the existing the day the loan
launched, should we take the average for
four hVe years, only In country but in
foreign countries WELT The extraordinary apparent
prosperity which surrounds the moment may last
six months or two but it s not to last during
the life OF these bonds and is just certain that when
we issue per cent loan, though 1t may be taken at
par by the people, It will nos aud cannot. be maintained
year. And when admit ali that can be
said in behalf Of the stability OF our
Government, the Intelligence and SprOsperity
OF our people, aud the supendOus productive capacity
Of country try to all the arguments made by
those VINO really Yaut to pay our debt at par in the
recognized exchange of the world, but who unwsely
think 1t can be done at per cent Il we'll enough for
consider what interest other countries pay,
or other words what the credit OF this world IL.
do not pretend in making the wing statement to
he accurate TO fractions, but In looking the nan
cal papers running back many years. the facts state
are substantially correct. The German Government,
which we all recognize as rich ami strong has never
been able TO float bond less than per Oeut France.
with Its rich mobiles and richer peassDtry, has its
per cents Ear below par. England. the banking
house OF the world. and incOmparaby the
richest people earth, has put its per
at par but for day. and see by London financial
paper that the consols remained at par only fifteen ln
utes. They worth 95 e, and for half century
they have been waverng between 10 aud OF per cent
The Austrian Russian and other securities OF the Con-
tinent at and cent are far below No stock.
bond, government pledge OF any nature,
made by any nation earth at per cent that the pub
lie bought at par or that was ever maintained at
nor will stock bond be issued Until the
oumuated wealth Of the world be increased by many
fold. The average rate Of discount IN LoadOn for the
best commercial paper for thirty years has been less
than "a per cent.
The average rate in EswYOrk for the last ten years
leaviDg out ratesl has shade less than per
cent The average rate at Paris Amsterdam, FL ank-
fort Berlin and Vienna punched together for the
period has been about ga per cent No OF these
countries has been able to sell It's bonds to It's
people under per cent In times - peace and prosper
ity and the greater part OF the time they have ranged
above per cent Or the bonds proposed TO be paid by
the pending bill. about $2l0OO0O0O held by the
National banks and Of the chief arguments OF those
who urge three per cent bond 10 that the banks will
have take three per cent bond to cure their cireu
lation in lieu Of the bonds they hold. 1t seems
to me that this is q great mistake. II the
banks are forced take three per cent bond main
their circulation, ~ my Judgment nine out Of ten
reduce their circulating notes TO the lowest possible
huvDg million Of bonds provide for It's circulation.
E sdss' s o "a @ as sey says psTot s9 s6 e. d
banks should generally d" this what would % inc re-
suit IL means u tremendous aud, as believe, most
holding hyo six per cent bonds should adopt this psn
they undoubtedly VIII If forced to do SO
by tins measure, tue contraction Of the
currency within the next t twelve S ON months
only onefourth of tits enormous sum was
Withdrawn from circulation at tine present moment it
greater financial criss ,lan that Of 1897 or 1873.
that To prevent the banks doing this II Is proposed that
they should be relieved Of the per cent tax pro-
vidcd by upon their circulation making this three
per cent boud four per cent bond far the banks
arc concerned Could any proposition be more absurdf
Are members OF congress stupid enough 10 believe that
the people Of this country would tolerate thing Of
this kind for mUmeutf Not because tue banks should
not DO relieved OF this onerOus and unwlse TAX
but because tueY will be relieved at the expense OF
otEer investors and granted a special advantage
by giving the 6asSs tins advantage they
win take their S2lO,OO0OoO, should be glad TO
have the members OF Congress from Kentucky and MIS-
sUuii, other points where bonds are largey
dealtln to tell US what they would do with the OLhOr
$470,0O0.000f Lat Us know who would buy them at
per thousand and one investments Just
secure aud as desirable IN every way are offered at
and and even per ceut IL Is urged, So by the
House OF Representatives,, that many O the ieadiug
bankers of New York insist that per cent loan can
believe what they say but well enough to consider
that the Judgment OF these gentlemen may be
Influenced by thUso who surround them. great
houses In New. York aud elsewhere ara interested IN
some kind of speculative venture II the Government
decides pay only cent there Is no stock or bond
from - 30 per cent within BRIEF period, and
the speculative opportunities would be Increased beyond
computation.
wisdom of the per sent loan influenced by
tive of personal gain. but only wish to point out what
would be- the inevitable effect IN the market
upOn all other secuTitfes--uamely them
greatly value Que Of the absurd things IN this whole
business 10 that the newspapers as we'll as the members
were due within the next six months There Ia not
dollar Il due for 20 come. The option OF the
United States 20 buy the bonds at par als Iue and that
Ia oil there of It. And seems to many OF US who feel
deep interest the credit OF the Government we'll
as m The future substantial prosperity Of the
try that this proposed Funding bill should not be acted
IMAM TOO hastily delay until the next Congress might
coat the Government two three millions. UnNise
action now might the country hundreds OF millions
OF dollars. Why then should We be In hot haste to
press through Congress at the close Of the session. and
when the political complexion Of not both houses
of Congress about % change, bill 80 frreacning In
It's results this Z g. W. D.
York Ian 10 1881.