The Washington herald., 1913-09-04
MARKETS, FINANCE, COMMERCE

2 per cent issues, the national banks
had purchased to the extent OF their
needs, and that there was no invest
ment demand for a bond bearing SO low
a rate of interest. For more than two
( years this circular constantly argued that
! to authorize the issue of bonds bearing a
higher rate thans2 per cent without ad-
justing the circulation taxes would re-
suit disastrously to the public credit and
be in effect bad faith on the part of the
! government, inasmuch as the 2s had been
issued with special circulation privileges
as an inducement to the national banks
to exchange their holdings OF IS. Is. and
IS for the lower interest-bearing bonds,
and to destroy this privilege by issuing a
higher interest-bearing bond without at
the same time establishing parity as
between the proposed new IS and the old
IS would be most unjust
This circular was the first to call at
tention TO the dangers involved. and the
then Secretary Of the Treasury began a
vigorous campaign to secure legitlation
that would safeguard the position of the
IS and SO keep faith with the holders of
the governments obligations. He refused
to avail himself of the new bond author
ity at a time when the Treasury was
seriously in need of funds, and declared
officially that sooner than be a party to
buGn lDluSllGe ne WOuIu TeSOTI 10 an Issue
of per cent temporary certificates Of
Indebtedness. This position was main
tanned with great strength of purpose for
many months, until Congress finally cor
rected the defect in the original au-
thority.
When the postal savings bank act
was under consideration in the Senate.
it was proposed that postal savings
funds should be invested in United
States bonds bearing a higher rate Of
interest than , per cent This circu
lar at once characterized such legisla-
tion as a gross discrimination against
those bonds which constitute by far
the greater portion of our public debt.
and pointed out that these bonds had
been issued under circumstances i'm
posing upon the government officials
the duty of exercising the utmost good
faith.
National City Attitude.
Respecting the historical attitude of
this bank toward the public credit. we
may be pardoned for recalling that
when the government, at the begin
ming of the war with Spain in lS9S, was
fearful OF the success of the $500. .00O,-
900 war loan. the National City Bank
organized a syndicate which agreed to,
take at the governments terms the
enllfe loan OF any part tnereOt which
might remain unsubscribed. President
Mckinley acknowledged this to be a
patriotic service, particularly as there
was no prospect of obtaining any OF
the bonds unless the public should not
think well enough of the loan to sub
scribe.
Time and again this bank has quail
ified as a bidder for the various insular
loans which have been issued Eiece the
Spanish war. and in a. least one in
stance such a loan would have failed
OF being placed had it not been for the
bid OF this institution.
The incidents above recited do not
ditfer in character from anything this
may have said or done incl
dent to the proposed legislation in the
currency bill, and our attitude now is
just as strong in support of the public
credit as IT was when a previous Con-
gress, dominated by another political
party than that now in power. pro-
posed and passed a measure which
failed to safeguard the integrity Of the
. per cent bonds.