758 



REFUNDING THE NATIONAL DEBT. 



able in coin of the present standard value, at the 

 pleasure of the United States, after ten years from the 

 date of their issue, and bearing interest, payable semi- 

 annually in such coin at the rate of five per cent, per 

 annum ; also a sum or sums not exceeding in the ag- 

 gregate three hundred million dollars of like bonds, 

 the same in all respects, but payable at the pleasure 

 of the United States after fifteen years from the date 

 of their issue, and bearing interest at the rate of four 

 and a half per cent, per annum ; also a sum or sums 

 not exceeding in the aggregate one thousand million 

 dollars of like bonds, the same in all respects, but 

 payable at the pleasure of the United States after 

 thirty years from the date of their issue, and bearing 

 interest at the rate of four per cent, per annum ; afi 

 of which said several classes of bonds and the interest 

 thereon shall be exempt from the payment of all taxes 

 or duties of the United States, as well as from taxation 

 in any form by or under State, municipal, or local au- 

 thority ; and the said bonds shall have set forth and 

 expressed upon their face the above specified condi- 

 tions, and shall, with their coupons, be made payable 

 at the Treasury of the United States. But notning in 

 this act, or in any other law now in force, shall be con- 

 etrued to authorize any increase whatever of the bond- 

 ed debt of the United States. 



SECTION 2. And be it further enacted. That the Sec- 

 retary of the Treasury is hereby authorized to sell and 

 dispose of any of the bonds issued under this act, at 

 not less than their par value for coin, and to apply the 

 proceeds thereof to the redemption of any of the bonds 

 of the United States outstanding, and known as five- 

 twenty bonds, at their par value, or he may exchange 

 the same for such five-twenty bonds, par for par ; but 

 the bonds hereby authorized shall be used for no other 

 purpose whatsoever. And a sum not exceeding one 

 half of one per cent, of the bonds herein authorized is 

 hereby appropriated to pay the expense of preparing, 

 issuing, advertising, and disposing of the same. 



SEC. 3. And be it further enacted. That the payment 

 of any of the bonds hereby authorized after the expira- 

 tion of the said several terms of ten, fifteen, and thirty 

 years, shall be made in amounts to be determined from 

 time to time by the Secretary of the Treasury, at his 

 discretion^ the bonds so to be paid to be distinguished 

 and described by the dates ana numbers, beginning for 

 each successive payment with the bonds or each class 

 last dated and numbered ; of the time of which in- 

 tended payment or redemption the Secretary of the 

 Treasury shall give public notice, and the interest on 



the particular bonds so selected at any time to be paid 

 shall cease at the expiration of three months from the 

 date of such notice. 



SEC. 4. And be it further enacted, That the Secre- 

 tary of the Treasury is hereby authorized, with any 

 coin of the Treasury of the United States which he 

 may lawfully apply to such purpose, or which may be 

 derived from the sale of any of the bonds, the issue of 

 which is provided for in this act, to pay at par and 

 cancel any six per cent, bonds of the United States of 

 the kind known as five-twenty bonds, which have 

 become or shall hereafter become redeemable by the 

 terms of their issue. But the particular bonds so to 

 be paid and canceled shall in all cases be indicated 

 and specified by class, date, and number, in the order 

 of their numbers and issue, beginning with the first 

 numbered and issued, in public notice to be given by 

 the Secretary of the Treasury ; and in three months 

 after the date of such public notice the interest on the 

 bonds so selected and advertised to be paid shall cease. 



On January 20, 1871, an act was approved 

 amending the above, as follows : 



Be it enacted by the Senate and House of Represen- 

 tatives of the United States of America in Congress 

 aetembled, That the amount of bonds authorized by 

 the act approved July fourteen, eighteen hundred and 

 seventy, entitled " An act to authorize the refunding 

 of the national debt," to be issued bearing five per 

 centum interest per annum, be, and the same is, in- 

 creased to five hundred millions of dollars, and the 

 interest of any portion of the bonds issued under said 

 act, or this act, may, at the discretion of the Secretary 

 of the Treasury, be made payable quarter-yearly : 

 Provided, however, That this act shall not be con- 

 strued to authorize any increase of the total amount 

 of bonds provided for by the act to which this act is 

 on amendment. 



At that time there was considerable doubt 

 as to the ability of the Government to sell any 

 of the bonds on the terms fixed by the law, 

 as the nix per cent, bonds which bore interest 

 in coin were still selling in the market at con- 

 siderably below par. 



On February 28, 1871, the interest-bearing 

 debt of the Government consisted of the fol- 

 lowing : 



Statement thawing the condition of the interest-bearing debt of the United States, as shown "by the 

 books of the Treasury Department, on the close of business, February 28, 1871. 



The table on page 759 shows the market 

 price in coin, less accrued interest, of the va- 

 rious securities of the United States Govern- 

 ment from 1869 to January 1, 1879, inclusive, 

 and is instructive as showing the state of the 

 public credit at the dates specified. It will 

 be seen that at the time of the passage of 



the refunding act, July, 1870, the five-twenty 

 bonds of 1862, which had been redeemable 

 longer than any other class of bonds, and 

 which would naturally be called in first, were 

 worth in the market only $93.30 for each $100. 

 The refunding act authorized the sale of the 

 five per cents at not less than par, and it was 



