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Show TELEGRAPHIC REi lSBIXG THE DEBT. How Secretary Slicrmaii Wants It Done. Washington, 30. Senator Morrill has madf public the following letter from tho secretary of the treasury, concerning refunding: TllEASUHT DEr.RTMKNT, Ol'FlC'i OF THE tSfcURE TART, W AbniHOTON. To Hon. Justin S. Morrill, committee on finance. United States Senate-Sir: Senate-Sir: In respor.EC to your verbal enquires en-quires I have the honor to submit tho following obervati"ns respecting the refunding ol the general debt: In addition addi-tion to 18,415,01X1 G por cent, bonds tibsolulelv payab'o on December 31st, '80 and 945,000 payable on July 1st, 'SI, thH (ollowinit honosof ttio United States will bo redeemable within tho next vcir and a half, viz: May 1, 1S81, fi per coat., gy'.i8, 440,850! Juno 30, 1881, G pjr co-its., 264,321,350, making n total of 772,-7G117U0, 772,-7G117U0, tho annual interest charge on which is 41,881,298.60. About half ol theso are coupons, running only on the dittos of redeenvtig, und if they aro not refunded or paid otfthe holders wit have to bo supplied with udditional coupon sheets at the expense of government, and tit h coat probably nearly as great a would ptiy fur Iho original issuo of tho loan. It is manifest th -.t theso bonds cannot can-not bo paid oft in 18S1, and I, then-fore, folt it my duty lo rccomm-nd, in my annual an-nual report, that authority be granted to refund them into 4 per cent, bonds, thus clTtCting a siving in tho annual inlfr.-gt ehargo ot about 10, 500,000. Tho present time I believe the most advantageous ad-vantageous fi-r such refunding, probably much more favorable for refunding than any future time, and we have ut hand 4 por cent, consols, a bond already well known and popular. Tho successful funding of so largo a portion of tho public . debt into those bonds during the "past year was mainly duo to the exceptionally lavorablo ftato of our foreign and home ; trade, and the resumption of specie payments, pay-ments, and it is my lirm belief that oui surest course in to refund tho remaindei of the b jnds bearing a high rate of interest inter-est while this state of ai&irs continues. Tho bill introduced in the Housooflle-prescntalives Housooflle-prescntalives on tho 3d Instint, by Fer- i nando AVood, chairman of the committee on ways and means, and which hns beL-n sont to me, provides as f Hows: Tuat ec much of tho authority con fern d upon tho eccretnry of tho treasury by t'io acta of Ju'y 14th, 1S70, and January S Oth , 1871 , to refu nd the public dobt to the extent ol $1,500,000,000, as has not b on exhausted and executed, bo and the sam is hereby inodifi.d, so as to limit Iho rate of in-tori'at in-tori'at upoa bonds yft tl be issued, as - -.UgUiijVytheBe acts, the rale of in- aunum. This bii;, if i ncted--into law, would perhaps be construed as prohibiting prohibit-ing tho salo of bonds for resumption purposes, pur-poses, at a greater rato of int-rc3t than VA per cent., although such is not probably prob-ably the intent of the bili Aside, however, how-ever, from its possible boarlug upon the ability of th-department to maintain rc- sumption, I belicvo its passage would be fatal to refunding, although I should ol course bo happy lo rcfuiut tho debt intc VA per cents it' it wore practicable to dt. so That a 3J per cent, bond would not now sell at par 1 am fully satisfied, and 1 I tee no reason tu ospecWuch a bond wili bo nion- favorably looked upon as an investment in-vestment in 1S81 than it would bo now, . on tbo contrary, with a revival of indus-1 indus-1 try and groLt activity in manufacturing, stem of which are already to be seen in all parts of tho country, and tho constant con-stant and increasing demand for money , .rising therofrom, it soem-i to me to be not ot all ccrtaiu that we shall ' then be able to born w freely, a' even 4 per cent, per annum, ai d of tbe correctness correct-ness of these, views, received positive as-siirancos as-siirancos during my recent vis'it to Now York. Our 4 percent, consols, now having hav-ing twenty -eight ycarB to run, were worth duri' g the tirst half of thia month, 102 ! net, at which piieu they yielded to the investor, to carry to maturity, 3 Qio per i cent, per annum. Athirty years' d'A per ' cent, bond to yield tho same income ! would have to be purchased at 93.70. I Again a 4 per cent, bund lo yield but 2i I per cent por annum, would have to re purchased at K'8 83 and therefore a 3 i per cent, bond cannot toll for par until 4 : uer cent, bonds aro worth 108 88 I would remind you that during the last I refunding operations tho tales of 4 pt.-r ! cent, bonds had to bo suspended more ' than onee, owing io tho derangement in tbo money markeland unfavorable stale of exchanges, this causing the bonds to fall bolow par, atone lime to 08 por cent. Fortunately the derangements were but temporary, and after more or less delay tho department was able to resumo sales. I think the present an exceptionally lavorablo time for refunding, and lam satiliod the 5 por cent and G per cent, bunds, so soon to become rtdcomable, cannot bn so Eafely and bo profitably provided for in nny other manner. The very inrgoan.ount to bo refunded prior lo i July 2d, 1881, 800,000,000, is consider-. consider-. nbly in excosB of tho nmount refunded in nny one year i inro refunding began, and I respectfully submit that lie lime now available is none too great for the purpose. Tbe passage of the bill mtroduc..d by yourself in the Senate and by General Garfield in tho House of Kcpr soDtativcs, will, I believe, enable the department to refund the entire amount prior to the maturity ma-turity of the bonds, but if it should not rr-sult in .-peedily refunding tho whole of them, that clause of the bill which renders applicable tho provisions of the act of July 14ii, 1870, etc , will enable the de-par, de-par, mont to "call" snch 5 por cent, and G per cent, bonds, atlor they shall have matured, and to lvdcem them with iho proceeds of the salo of 4 por cent, bonds ao authorized, and such proceeds would includf, of coureo, whatever prum-um tho bonds may then sell for. While it ic not thought safo to tssumo thai upon resuming re-suming funding o, e ations, with tho propped prop-ped of the emission of 4 per cents, about equal in amount to the present issue, iho bondj will remain at a prtco n-'t much if any tibovo par. It is thought that undnr the operation of thi proposed bill P-trlies may bo induced to surrender sur-render tho bonds now hold by them, upon payment of an am-'Unt nut to exceed tin; dill'urcnce in interest, bo.ween the b.-nd? received and thori iri-iin d (Signed) Very respectfully, John CJiiehmav, Secretary. |