Butler citizen. [volume] (Butler, Pa.) 1877-1922, 1881-01-05
The Funding Bill

really important-measur of general
legislation to be acted upon by this
Congress, it is to be regretted that 1t
did not pass the House before the holl-
davs. allowing time for ample discus
sion ia the Senate after the recess, and
for the adjustment ofditferences between
the two houses if the Senate should
think it wise to amend the bill.
1t is possible that the House might
have passed it previous to the holiday
recess if the irrepressible Mr. Weaver
had not thought fit to obstruct it on
Tuesday by getting up a disgraceful
fracas which led to an carly adjourn
ment and consumed the time of the
House in extortiDg apologies which
were due to its dignity. But as
Weaver had his claws pared by the
humiliatiug necessity which was forced
upon him of apologizing under athreat
of expulsion be may not be quite as
cantankerous after the recess.
Next to the annual appropriation
bills. which are a matter of course,
there is no subject on which this Con-
press is called to act which can be COM
pared in urgency with the Funding
bill A heavy amount of national
bonds bearing interest at the rates OF
six per cent and five per cent become
redeemable on or before July ] next
1t is needless and was.eful for
the government to pay such high rates
of interest There is no sort of doubt
that the seven hundred millions of
redeemable six and five per cent bonds
could easily be refunded at three and a
half per cent, and perhaps at still
lower rate Whatever may be the
rate finally determined upon by Con
gress time is needed for printing the
new bonds and making arrangements
| for Offering them to the public in ad-
vance of the dates when the old high
rate bonds are redeemable This is
the one subject of general Legislation
which demands early action by this
expiring Congress 1t is unfortunate
that the Funding bill goes over to the
tender mercies of the House after the
holidays. There is strong probability
that the Senate will amend it and that
disagreements leading to committee
of conference may push a final determi-
nation into the closing days of the
session and perhaps defeat it altogeth-
| er
Our only doubt as to the wisdom OF
the House bill relates to the proposed
rate of interest. OF course nobody dis.
putes that three per cent is the proper
rate to be insisted on if the new bonds
can be sold at par But if the authors
of the bill should prove to be mistaken,
if it should turn out that three per cent
/ bonds cannot be disposed of, while
three and half per cent boz Dis would
be taken. it would be q mistake to pass
bill fixing the lower rate. But as
the Committee on Ways and Means
has a settled opinion on this point il
is better that its bill should pass the
House, leaving proper amendments to
the more mature consideration of the
Senate. If the wise heads of the Senate
should agree with the House that
three per cent is feasible rate for the
new bonds the country will be glad to
be assured that it can borrow on such
| favorable terms. But We shall have
doubts until the experienced men OF
| the Senate adopt tine rate proposed by
the House. If the new bonds are
offered at too low a rate of interest to
to be taken we might as well have no
Funding bill at all
Secretary Sherman, who is, perhaps,
the most competent Judge, thinks that
a three and half per cent loan could
he placed, but doubts whether three
per cent loan would be taken. The
judgment of SO experienced and sue
cessful fDancier is entitled to great
weight, and if refunding is defeated by
passing bill which his judgment
does not approve the Ways and Means
Committee will have incurred an un-
pleasant responsibility
The natural way of dealing with the
divergence of opinion between Secreta-
ry Sherman ard Mr. Wood would be
to pass an act prescribing three and
one-ha!f per cent as the maximum
rate of interest and leaving the Secre-
tarv of the Treasury to make the best
terms he could below that rate. The
country would then have the benefit
of three per cent if the condition of the
money market made that pat3 practi-
crble. and should it be impracticable
refunding would nevertheless go on at
rate not exceeding three and cne-half
per cent.
We must admit that there is force in
the reply which has been made to this
argument. 1t is said that IL three nhd
half per cent were fixed as the maxi
mum rate, with discretion to sell bonds
bearing a lower rate, bankers would
combine to reject loans offered at a
lower rate in the expectation of COM
| pelling the government to concede the
highest rate permitted by the law
There is great force in this suggestion.
1t would perhaps be better to establish
by law an invariable rate Of interest
on the new bonds but this makes it
all the more necessary that the rate
should not be so high as to block the
process Of refunding, and compel the
government to pay six and five per
cent when it certainly could do a
great deal better. 1t is wiser to make
sure thing OF reducing the interest
to three and half per cent than to
offer three per cent and have the new
bonds rejected. which would entail a
necessity of continuing to pay the
present high rates.-N. y. Herald.
why Should They.