Sacramento daily record-union., 1888-09-01
TIE GREAT PERIL"
REPREHENSIBLE DEMAGOGY OF
THE ADMINISTRATION.
The $132,OOO,OoO "surpIus Kept
on and in Violation of Law
for Political Effect.

The following unbiased statement Just
made by The great banking house of Fisk
Il Sons, concerning the surplus" so
loudly proclaimed and bewailed by the
Administration and the Democracy as
reason for the necessity for turning over to
free trade channels TO reduce the Govern
ment income, will convince all candidly
| disposed persons of the utter sham and
hollow pretense of the President and his
advisers in the present role of Tariff Re-
formers to protect the Dear People"
BANKING OFFICE HARVEY FISK 65 SoYs.
New YORK, August %, 1855.
The last statement isSned by James w.
Hyatt, Treasurer Of the United States, un-
der date cf July 81, 1888, gives the ;" sur
| plus then in his hands As Treasurer, in
| Guiding the fractional silver coin. az Sl32.-
| 5l7,751 % in addition To THIS amount. by
the same statrneul. he held: S9O64 $50 So
| to cover accrued interest on bonds; $43 co.,
! I95 3Ot meet Disbursine Officers balances
! etc, S96, 740, ,339 30 for REDEMPTION or notes
| OF National Banks failed, etc. 100000 900
reserve for redemption of United States
notes.
In short, the Treasurer of the United
States had in his custody on that date, in
money, S732,775, ,527 70, against which
| bad been issued gold, silver and legal ten
| der certificates to the amount of $3.50, ,844,-
79l, leaving 1881. .93O, ,736 76 in his
hands, of which $I32, 100000 is clear
| surplus"
Tins does not seem right, especially as
the United States Government had out
standing on that date $1,014 13S, ,142 inter
est-bearlng debt, on over thousand mill
ions of which it is paying interest at four
TO six per cent. per annum.
| The Secretary of the Treasury has full
authority in his hands, under Acts of
| Congress, to purchase of these interest
! bearing bonds-and stop the interest run
ming longer on all so pnrcbased-up to the
extent OF the surplus" Plenty Of bonds
can be had TO save the Government two per
cent. per annum for the ten years they may
have TO run.
Since the Secretary of the Treasury COM
menced to purchase with the surplus money
in April last, he has, by official statements
! from the Department at Washington, pur-
chased up to August Dist $33 ,601, 100, fours
and tour-and- a-halfs, on which 8 saving to
the people in future interest payments
I upwards of $4,000 600 is made, and this
after allowing for all premiums paid; and
with the surplus money now in the Treas
ury he could save the people, in addition,
forty millions more of future interest pay
ments and take this great peril" and
menace to every interest in the country out
! ofthe calculation of business.
! The enormous crops of the land now
| Just beginning to move, the cotton crop of
| tue SouCh, on which we depend so much
! to pay the balance of foreign trade-au
these interests demand that they shall not
be lmperlled by lack of action on the part
OF the Administration
The spirit of the law authorizing the
Secretary to purchase bonds is clear and
unmIstakable, that, whenever g surplus
acoumulates over the 800, 600 600 reserve
to be held against the greenbacks, it shall
be used, above fair working balance, to
! decrease the debt by purchasing bonds at
| the market price; that surplus" now, is
Sl5z, 5OOO0O over the greenback reserve.
! The Secretary has saved the people, as
stated above, about $l2000,000 on his pur-
caaseS 50 far; therefore there Is every good
/ reason why, as long as he can get bonds.
! he should increase this saving, decrease
he interest bearing debt, comply with the
spirit OF the law and take this great peril"
| OF large surplus from the business Of
| the country.
The four per cent. bonds have nineteen
years to run; two per cent per annum for
each year they have to run would be IS per
cent. II the bonds should run to maturity
each bond of 81, 900 would cost the Govern
ment l76 per cent. or 81, ,760. To save two
TWO per cent. per annum the Government
could pay up to 13S per cent, or s., $50 for
each bond; but millions could be pur-
chased at and Under 130 per cent, or 81, 300
| for each bond. The " four-and-a-halis, u to
save two per cent. per annum, would have
to be bought at not over 1OSg per cent.
| 1t might be very difficult to secure MANY
muhons at better price than to save the
Government live per cent. gross for the
snort time they have to run. The cur
rency skies, not yet included in Govern
ment purchases, could be had in fair ouan-
Titles 10 net The Government over Il per
cent saving for each year they have to run.
therefore. as large dealers in Govern
ment bonds, we DO not hesitate to give our
| opinion that the Government could invest
the whole surplus of S132, 10000 to save
on the average two per cent. for each wear
the bonds have to run, and this Is exactly
two per cent. per annum better than the
government is getting on its large balances
lying in the Treasury and national banks
drawing no interest.
The evils of a surplus" " are best cor
rected by not having any. The present
surplus and It's evils can, in few
months, be all done away with by using it
to reduce-at the best price the bonds can he
puFchased-the interest bearing debt. much
to the saving and comfort of the peOple.
After this fiscal year, judging from the
temper of both parties, there viii not be
much g. surplus" after providing for the
sinking fund, to trouble the business of
the country. HARVEY FISK & SoNs
Bankers and dealers in Government
bonds.
SINKING FUND ACT.
The law in regard to the sinking fund is
to be found in the following provisions of
the Revised Statutes Of the United States: 4:
Sec. 1869. There are appropriated ont of onv
moneys IN the Treasury not otherwise appronri.
ated, for the purpose hereinafter srecified. sn,h
iI Sus as may oe necessary for the same respect
lvely and such appropriations shall be deemed
permanent annual appropriations
Sinking fund of one per centum
oI the entlre debt OF the United States, to be set
apart as a sinking fund for the purchase or pay-
ment OF the public debt, in such manner as the
secretary OF the Treasury shall from time to
time direct "
ported goods shall be set apart as special
fund, and shall be applied as follows
first-To the payment in coin of the interest
on bonds and notes of the United States
Second-To the purchase or payment of one
per centum of the entire debt Of the United
states TO be made within each fiscal year. which
Is to be set apart us sinking fund and the in |
terest OF which shall in like manner be annlied |
to the purchase or payment OF the public debt
as the secretary of The rrea ury shall from time
10 tlme direct tAet of February %, 1922
The requirements of the sinking fund |
for The current fiscal year are estimated by |
the Secretary of the Treasury in bis an |
nual report at SAT ,S44, ,15S 80.
AUTHORITY TO PURCHASE.
The ACT of Congress authorizing pur- |
chases of bonds with the surplus MONEYS. |
under which the Secretary is now acting. is |
as follows:
Section ?. That the Secretary of the Treasury J
may at any time apply the surplus money in the |
treasury not otherwise appropriated, or so much |
thereof as he may consider proper, to the pur- |
chase or redemption of United States bonds |
provided,
That the bonds SO purchased or redeemed |
snail constitute no part of the sinking fund, |
but shall be cancelled.
Approved March 3, 1881.