National Republican., 1888-01-20
No Authority to Paw premluma.


In another column we reproduce edi
torial from the NATIONAL REPUBLICAN of
August o, 1887, addressed to the President,
in which It was conclusvely demonstratso
that the Secretary OF the Treasury had no
power, under the law, to pay a premium
upon United States bonds that were to con.
stltute the sinking fund.
We are induced to republish this article
because OF the resolution offered by Mr.
Plumb, of Illinois, on Wednesday, and ruled
out by the Democrats, as the only method
left them to protect the administration from
the unlawful payment OF premiums, rang
ing from to "a per cent, upon bonds
which could have been called and paid at par.
Even without the alteration alleged by
MIR. Plumb made in the act OF July IA, 1870,
there Is no authority to pay premiums for
the bonds required for the sinking fusd.
The bondholiers entered into contracts
With the United States, aud the terms OF
those contracts are contained In the laws
under which the bonds were issued.
The Upited States should abide by It's con.
tract, and require the same OF the bond
holders. 4 part Of the contract was that
the United States should set apart, by pur.
chase or payment, a certain portion OF all
its bonds, each year, to render certain
through this reduction, the payment OF the
remainder.
The bonds were below par at the tin !
the contract was entered into, and the word
purchase was inserted In the contract to
give the United Ssitus the benefit Of thai
b. a. ., hat -,
executive officer would presume, upon h!.
own motion, to increase the public de0t, a
function uf government exclusively lugis
latiye.
Congress, besides making the inveStiga.
lion suget sted by MIR. Plumb, should also
pass resolution directing the Secretary OF
the Treasury, at the beginning of each
fiscal year, to cali hy numbers sufficient
amount OF the outstanding bonds to meet
the requirements Of the sinking fund law,
aud the interest on these bonds should
cease at the time fixed in the call.
An examination OF the debates AT the
time Of the passage OF the act will show
| the Intention OF the legislators. 1t Is not
even necessary to do this to establish the
fact that Secretary FaIrchild exceeded his
| powers when he paid premium on bonds.
, To prove this It is only neediul to examine
section eight OF the first article Of the con-
stitution, which defines the powers Of Com
grets, and section two OF the second article,
which defines the powers OF the President
That the whole question may be consid-
cred at once we give the laws In relation Ia
the payment Of bonds, as they are found
on the statute books, and ask for them, aud
the article from the NATIONAL REPUBLICAN
OF Aug. 0. a careful perusal by all mem
bers of Congress.
Here are the laws as to bonds: On thu
25th OF February, 1862, Congress passed the
law entitled IAN act to authorize the ISSUE
of United States notes, and for the redemp
tion thereof, and for the funding the nolt
ing debt OF the United Statesn The nth
section OF that law reads as follows:
That all duties on imported goods shall b.
| paid in coin, or in notes payable on demand
heretofore authorized to be issued, aud by Law
| receivable In payment of public dues, aud the
coin so paid shall be set apart as special fund
and shall be applied as follows:
First. To the payment in coin of the interes
on the bonds of the United States.
Second. To the purchase or payment of on
per ctAiim of the entire debt of the Unitel
hie'iS @tUm9dH within GPGR isfs' SPa5g sc
sIGrt as a sinking fund. and the Interest o
which shall in like manner be applied b thu
purchase or payment otthe public debt as tht
Secretary OF the Treasury shall from time L
time dlrect.-lrnitcd states Statutes at Large
vol. y, page 3iG)
On the lSth Of March, 1860, Congres
passed the law entl led "Au act t
strengthen the public credit" The fol
lowing is an extract from It :
But none Of said interest. ,aring Obligation
not already due shall be redeemed or paid be-
tore maturity unless At such lin Cnilcd State
| notes CTe convertible into coin ut the option o
| the holder, or unless I'll such time bonds of In,
| United States bearing lower rate of interest
than the bonds to be redeemed can be sold al
per in coin. - Cnitcd States Statutes at Large
| vol. ID, p. l y
On the 81 OF March, 1881, Congress passet
| the refundlng act, the second section o
which reads as follows:
That the Secretary of the Treasury may Il
any time apply the surplus money In the treas
| uTy rot otherwise appropriated, or so muci
thereof as he may consider proper, TO the pur
chase or redemption of United States bonds
ProHdtd, That the bonds so purchased or r.
deemed shall constitute no part of the sluklni
fund, but shall be Cancelled. limited State
Statutes at Large, vol, 81 p, d57)