New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1882-07-03
THE KELLEY REFUNDING SCHEME.
lBY TELEGRAPH To THE TRIBC


WAsIINGToN July 2.-Judge Kelley said in the
House, Saturday, in support of his two per cent
refunding resolution, that it was prepared under
the auspices of the Secretary of the Treasury and
was approved by the Committee on Ways and
Means This conveyed the erroneous impression
that the scheme was to some extent the cOncep-
ton of Treasury officials. Judge Folger was asked
by "A gentleman from New-York who he'd been be-
fore the Ways and Means Committee, If he favored
refunding at two per cent. TO which he replied,
Certainly; if the Government can sell two per
cent bond at par l am in favor of it. of course"
Later Judge Kelley asked the Secretary 10 have a
two per cent resolution drafted and this the Secre-
tary caused to be done in the usual form. This
was all the Treasury Department had to do with
the scheme.
1t was runlored that some combination had been
nade;to take large proportion Of these two
per cent bonds at once but nothing of this
kind is known at the Treasury Department.
beyond the fact that some Philadelphia banker said
to Judge Kelley that if the resolution passes,
he. the Pinladelphian, will take $130,0O0 of the
two per cent bonds As the sherman amendment
to the Bank Charter Extension bill has already
passed the House, giving holders OF the extended
bonds the right to rcfuad at will IN three per cents
:; i orcued that no one would invest in tho Kelley
bonds The proposed two per cents have single
advantage over those to be issued under tho Sher-
man amendInent-the same advantage that the
latter have over the extended three and half per
cents-namely, the night Of outstanding until
tie others are paid But, as the pay
ment Of the two per cents must follow
closely upon that OF the trees the advantage, it Is
thought, will not b. enough 10 warrant the outlay.
There are other points Of objection, however which
will probably be brought out when the resolution
reaches the Senate. Professor Elliots interest
tables for June show that investors in governments
realized from two and eighty-sx hundredths per
cent to two and ninety-twO hundredths per cent
npon investments made at ruling prices. This
being the case a bond bearing only two per cent
interest would, of course have market price con-
siderably below par, aud under the present law
il would be the duty OF the secretary OF
the Treasury TO require banks which might nave re-
ccyed ninety per cent III currency OF Tue lul Vaiue
of their two per cent bonds to make further deposit
sufficient TO bring the tlue Of securities up to par
value # the original deposit. Owing to this fact
il il said bankers will be even less likely to invest
in two per cents than they otherwise would be, or II
tbey were permitted to deposit bonds at their tace
value Irrespective Of the market value, the pnbIlc
would not be sufficiently protected IN case oi
banks failure, the bonds might not sell for sum
sufticen, TO redeem It's circulation.
Ii is however not Improbable that tDe Kelley res
CLINTON will pass the Senate. 4 prominent member
ot the Senate Finance Committee, being asked
ahout If this evening, said: "WhO would vote
against it, or who would vote against one per cent
resolution7 NeIther.of them can do any harm"