New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1894-01-19
THE FIVE PER CENTS.

Wall Street did not manifest The expected on
thllsiasm at the proposal 10 issue bonds There
was considerable hcsitation rather than gen
! eral buoyancy. and those who he'd looked for Il
| sharp advance in securities were not entirely
satisfied. Doubtless this is in part because the
! Secretary does not appear 10 have consulted
those most familiar with such operations. so
| that the business world WAS completely sur
! prlScd by the terms proposed. 1t was reasoned
! by some that he had not been wise in avoiding
the cooperation of banking institutions but
| had fixed the price shade above the calculated
equivalent Of > per cent bond at par so that
| bankers and dealers would have no chance to
make anything by bidding for the bonds. 1t
was generally agreed that the terms would not
be attractive to European investors nor TO
those who have money in savings banks. Never
thecSS. with more than S2O0,0OO000 lying idle
| in this city. it was assumed that the compare
! lively small amount Of bonds offered would be
rcad: taken. The tclcgraphed statement that
considerable bids had already been received.
including one for part of the bonds ut 100, was
therefore received without surprise The quos-
ton whether the effect upon the financial future
would he altogether beneficial was not an
swered to the satisfaction Of some. by the dis
position Of idle money 10 accept temporary en-
poymcnt at Il low rate Of interest. But the
decision of the Secretary to sell bonds instead
Of issuing more paper against the socallcd
seign0rage was everywhere commended.
Ii is too early yet to Judge whether the formal
announcement that principal and interest will
be paid :" in coin " is likely TO cause cmbarrasS
ment. Coming from the same Secretary who
seriously inquired last spring whether new
| Treasury notes should not be redeemed in sill
yer only the statement was not entirely rcas
surfing. But the Secretary undoubtedly meant
to follow the law strictly. and did follow It's
letter. though not its true meaning. In 1919
when the act was passed, payment in silver WIS
not possible. There was no "coin OF IN" | ntc1
States" nor did anybody suppos, there ever
would be. in which such obligations could be
paid. except gold COIN The words Of the act
meant, when They were used. payment In gold
coin only. Cscd now. they might mean some
thing else 1t does not yet appear whether the
Secretary has been asked By any possible bid
der whether payment Of interest and principal
in gold is guaranteed. Under the peculiar cir
cumstanccs existing in Congress. the Secretary
might find II incOnvcnicnt to answer uncquvo-
cay that the act authorized gOld-bcaring bonds
in 1919. and therefor. authorized such bonds
now With more than half Of his own party
opposed to any such pledge. he might prefer
TO cite the yet unrepcalcd clause of de act Of
1890. making il the duty Of the Government 10
maintain the parity Of gold and silver. and add
that the sale of bonds 10 repcnish the Treas
ury reserve was an exercise of power for that
purpose. Though majority of the Democrats
resist and dcnouncc this policy, II is not be
licvcd that they are strong enough TO over
throw it.
1t is The opinion Of competent fnancicrS Of
both parties that the issue Of ) per cent bonds.
though The best thing the Secretary could do.
may prove unfortunate. and ought TO have been
avoided. There is almost universal ccrsurc of
the ignorance and Incompetence Of the Demo
Gratis in Congress. which have prevented wise
legislation for protection of the public credit.
But il is only just 10 remember thai The tariff
policy OF the Administration is at once the main
cause OF deficit and Of danger TO The Treas
ury. and the principal obstacle to prompt action
on Tie finances. The Administration is in that
respect as ccnsurablc as the majority in either
house. The existing deficit IS The direct result
OF it's tariff policy The tariff il advocates is
calculated TO increase that deficit by $4,000
600 Absorbing anxiety TO get that measure
passed prevents timely attention to any other
matter. The bonds offered are therefore, in Che
strctest sense. Frce-Trade bonds. intended 10
supply necessities created by Democratic war
fare on home industries They are acceptable
to investors to-day only because there exists
an abiding faith that the theories which in
spirc the Democratic party will not long pre-
vail In The Government, and that the credit OF
the Nation will no, long be NJ the mercy Of
Democratic incapaclty.