Year: 1873

Dispatches from Washington state that it
has been announced in various quarters that
among the propositions to be presented to the
next Congress will be new issue of govern
ment bonds or certificates bearing rate of in
terest not exceeding 365 per cent. per annum.
1t is said that General Butler will propose
the issue of such bond convertible into
greenbacks at the pleasure of the holder. 1t
has been heretofore reported and believed that
the President will advocate such an issue and
that it is favored at the Treasury Department.
Conversation with a number of the prominent
officials about the department indicate the fol-
lowing to be the views which number OF
them hold, and which will, without doubt,
find expression in the forthcoming reports.
There is a general disposition to favor the low
interest certificates, chiefly because of the be-
lief that it would prevent the deposit of large
amounts by the country banks to the city
banks, thus inducing the country banks to re-
tain their surplus funds in their own vaults,
for use at time when they are most needed.
1t is believed that the suspension of the banks
in the city of New York was caused mainly
by the demand of the country ban nks upon
them for large amount subject to draft which
had been attracted thither by the paymenEot
interest on deposits, and which was asinvested in
call loans, which were not available when de.
manded. The country banks would not send
their surplus to New York if they had at their
command Government security which they
could purchase at par, and which could be
converted into greenbacks when demanded.
No such security can now be obtained, except
at large premium. The English banks hold
but small amount of reserve, but their sur
plus funds are invested in English consols
bearing three per cent. interest, which can
readily be converted in the market into cash,
with a slight depreciation, in any monetary
panic 1t is thought that such all issue could
also be made of great use to the laboring
classes, for if these certificates were issued in
sums of $50 the earnings of this class could
be safely invested in such funds, giving to the
! Treasury the permanent use of large sums
! of money at this low rate Of interest. Such
bond would, in fact, become a savings bank
for the people, without any necessity for the
machinery of a savings institution. 1t is be-
leved that since the panic the confidence OF
the laboring classes has been shaken in the
savings banks which have received their de-
posts and now refuse to return them except
upon notice of from thirty to sixty days.
These deposits are known to be likely to be
called for only in small amounts, and all that
is needed is to offer to the laboring man an
investment which is safe, and which can be
readily converted into money if required. 1t
is thought that the government might utilize
such certificates, and by the investment of
half the amount received in 500 bonds, reim-
burse itself for the whole amount of interest
paid upon the new certificates, and at the
same time serve the laboring classes in the
same manner that the laboring men in Eng.
land are served through the organization of
Post Office savings banks, without any of the
cumbersome machinery and risk of such in
stitutions.