Year: 1879

however the necessity of which would be very re
mote, for as has already been shown. the expendi'
tare OF a moderate PROPORTION OF the idle balances
in tbs Treasury in the purchase OF outstardsrs
bonds would of itself force the demand Tor the ! =
per cent bonds rapidly their sale would be de-
siraDls so that after the first iorty nifty millions


ad been 80 expenGed the process OF replenish1ncit
by rainvestment IN ia per cent bonds would 20
regularly and steadily on without resort TO amy
other means. to the full extent that it might be
deemed advisable to keep up tho Treasury balances.


SINKING FUND.


Any refundng legislation should provide for
n mandatory sinking fund.- to be regularly main
tanned by its investment in bonds OF the government
at regular stated intervals The process of refunds
ing the skies and nyes OF 1881 need not be delayed
for redemption natures. IL should be commenced
at once soon as the necessary legislation tor the
purpose can be perfected by the purchase.
with moneys now in the Treasury, OF the
skies and fves of 1881, rapidly they be
bought ut prices at which they would pay. for tho
balance of the time they have to run. certain mimi
mum rate of interest TO be fixed by the act say not


less than "a per cent per Ilnum. or as much better
as the Treasury Department should be able to buy
To the extent and for the period that such pur.
chases should be made in anticipation OF the sale OF
31a per cent bonds or in excess of the amount of
3a per cent bonds authorized to be sold from time
TO time to replace the moneys 80 invested. as
hereinafter explained. there would be u saving OF
lnteres. to the government on money now lying
ide at rates, according to the prices paid as shown
i'll the following tablet


Skies of 1881. having eighteen months to run from
January J. 1851, Will pay for their unexpired terI
per cent per annum if bought at 2Ss and accrued
interest
32l per cent per annum If bought at las and


criled interest


5 y per cent per annum If bought 103 90 and


crued interest.


81 per per annum if bought at los99 and ac-


crued interest.


per cent per annum II bought at l04.37 and


crEei interest.


These bonds are now selling in the market at .
price about equal to SOB % and accrued interest.


Fives OF 1881. having eighteen months to run from
November 1o79 would pay from that date for their
uneApired term (supposing that they We're to be
tually redeemed Nav !. 1881. when the option
deem them will mature)


81. per cent per annum If bough at. $1o1 81
"a per cent per annuln il bought at lO2 II
81 per cent per annum II bought at lU2 %


These bonds are now selling in the market at .
price equal to about $lOl 06 and accrued interest.
NoTKThe of interest which bonds having certain


periods will certain prices given in all


the STANDARD authority stock The prices given


s sns % Of


IN tho stock Exchange reports are @ In


correct eompars"n hsve stated tho prizes a. SO much
value Of the principal


NECESSARY SAFEGUARDS
1t would not be necessary or advisable to author.
ze the immediate sale or 3s per cent bonds to the
full extent that the moneys now in the Treasury
should be invested in the outstanding bonds. but
only when and to the extent that 1T might be
in order to keep the surplus balances OF the
Treasury to such an amount as might lie determined
aud fixed by the act necessary and proper
against the demand obligations of tho government.
maximum reserve which might justly be con-
sidered insufficient to insure the maintenance
| OF resumption and the uninterrupted continue
ance of specie payment, in tho absence of
| any provision other than the surplus rever ues
of the soyernment tor its maintenance ana replern-
| ishment. would be entirely safe when backed by
authority to sell 81 per cent bonds at any time
when the Judgment OF tho Secretary or tho Treas
ury Tor OF the President and Secretary, or of the
Cabine it should appear to be necessary to do so in
| order to guard the from being drawn too
low, or by such other provision might be deemed
advisable in case of an emergency. in which the i-
mediate sale OF 3s per cent bonds at might not
| be practicable should any such arise.
The provided by the National Banking law,
TO be held by national banks against their circula
tion and deposits is 25 cent. which consid-
cred in framing the act and has been found by ex.
perence thus far to be sufficient. As. however. the
Treasury the United States ought to be the sound
est financial institution In the world. IL would prob
ably be better fix its at higher percentage
than that OF the national bankssay 30 l3 per cent
| the point to which it should be reduced by pur-
chases of outstanding bonds and say. % cent
the point below which 1t should not be allowed to go.
with authority to the Secretary of the Treasury
sell ga per cent bonds whenever the reserve be-
tween those two points, his discretion, until the
| full maximum was restored or to meet more con-
| servative views. the maximum and minimum might
be increased to IS per cent and 81 cent. to 40
| per cent and So Is per cent


In the event that it should be imprnctcablo for the
Secretary of the Treasury to purchase the per cent
and per cent bonds anticipation of the maturity
OF the option to redeem them ut prices which would
yield the rate of interest fixed by the act IN sui-
cicnt amount to reduce tho surplus In the Treasury
to the required percentage of maximum reserve the
principle could be applied, after the maturity
the bonds aud the replenish by the sale of 31s
per cent bonds, OF the amounts dtsbursed for that
purpose when below the maximum reserve ana cons
| tinued until they should all be redeemed.


For these Ibclieve that all existing author
ity for the of bonds of any class for any
pose bearing 3l per cent interest should be
peacd ut This subject should receive the carly
attention of Congress and the necessary legislation
should be perfected as it's proper considers
| ton will permit. To promote the success OF the
proposed measures for funding the Outstanding fives
aud SKIES at low rate of interest it is desirable that
all legislation agitation in Congress upon the
subject of the currency should be avoided far
| possible.


will conclude this explanation and defence Of my
views upon this subject by the following significant
extracts from the financial column of the NKw YoRK
| HERALD of today