CONGRESS. (ISSUE OF BONDS.) 



man said on that occasion, March 1, in explana- 



tion of the iiii-n-uiv : 



"Mr. 1're.Milent, the resumption act referred 

 to in the amendment contains an important 

 Mipulatinn, wliich I ask the Secretary to read. 

 I. el t lie clause of the resumption act which en- 

 ables the Secretary to maintain specie payments 

 be read: 



To enable the Secretary of the Treasury to prepare 

 mill provide for tlie redemption in this act authorized 

 or required, he is authorized to use any surplus reve- 

 nues, from time to time, in the Treasury not other- 

 iriM appropriated, and to issue, sell, and dispose of, 

 at not less than par, in coin, either of the descriptions 

 of Umds of the United States described in the act of 

 Congress approved July 14, 1870, entitled "An Act to 

 authorize ttie refunding of the national debt," with 

 like qualities, privileges, and exemptions, to the ex- 

 tent necessary to carry this act into full effect, and to 

 use the proceeds thereof for the purposes aforesaid. 



" I wish also to have read to the Senate the 

 character and description of bonds authorized to 

 be issued under what is called the refunding act 

 referred to in the resumption act : 



That the Secretary of the Treasury is hereby au- 

 thorized to issue, in a sum or sums not exceeding in 

 the aggregate $200,000,000, coupon or registered 

 bonds of the United States, in such form as he may 

 prescribe, and of denominations of $50, or some 

 multiple of that sum, redeemable in coin of the pres- 

 ent standard value, at the pleasure of the United 

 States after ten years from the date of their issue, and 

 bearing interest, payable semiannual ly in such coin, 

 at the rate of 5 per cent, per annum ; aiso, a sum or 

 sums not exceeding in the aggregate $300,000,000 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 4J per cent, per annum ; also, a sum or sums 

 not exceeding in the aggregate $1,000,000,000 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 

 rute ot' 4 per cent per annum. 



" It is apparent from these laws, which are 

 fundamental in their character, that the Secretary 

 has imposed upon him not merely the privilege 

 but the duty of maintaining or providing for the 

 resumption of specie payments and the mainte- 

 nance of the specie standard in gold and silver 

 coin. He is also authorized by a subsequent act, 

 which I do not care to have read because it is 

 not necessary, to maintain $100,000,000 in gold 

 in the nature of a redemption fund, or rather that 

 was the minimum limit provided in the law. 



" Mr. President, in order to perform this grave 

 duty the Secretary of the Treasury was author- 

 ized, at his discretion, whenever necessary and 

 the whole matter was left to the Secretary of 

 the Treasury in order to obtain the coin re- 

 quired, to issue a bond bearing 4 per cent, in- 

 terest running for thirty years, or a bond bear- 

 ing 4 per cent, interest running fifteen years, 

 or a bond bearing 5 per cent, interest running 

 ten years. 



" It has been feared I do not say that there 

 has been occasion for this fear that theSecrotary 

 ot the Treasury can not maintain the necessary 

 resumption fund ; that he may have to resort to 

 the creditof the Government, upon which all the 

 greenback issues of the United States notes and 

 bonds are founded : that he might have to resort 

 to the sale of bonds to obtain money in order 



to maintain the parity of the different forms of 

 money in this country and the redemption or 

 payment in coin when demanded of the obliga- 

 tions of the United States, especially the United 

 States notes, commonly called greenbacks. 



When I came, in examining this question, to 

 see whether or not the law enacted in 1875 wan 

 applicable to the condition of affairs in 1893, it 

 was apparent to me, as it must have been to 

 every man, however ignorant he might be of the 

 principles of finance, that the conditions of our 

 country were such that we would not be justified 

 by public opinion or by the interests of our peo- 

 ple to sell a bond bearing 4 or 4^ or 5 per cent, 

 interest. 



" There was some doubt, in fact, whether a 5- 

 per-cent. or 4i-per-cent. bond could be issued, be- 

 cause the general theory and habit of the Govern- 

 ment has been, when a particular class or descrip- 

 tion of bonds is issued, though the bonds may be 

 sold at different dates, to have them all dated on 

 the date of the first issue. Though many of the 

 4-per-cent. bonds now outstanding were issued in 

 1880 and 1881, yet they all bear the date 1877, 

 because that was the year of the first issue, and 

 they are maintained as of that date. When is- 

 sued the coupons are cut off up to the date of 

 issue, so that the bond shall bear interest only 

 from the date of issue. 



" There are difficulties, therefore, which will 

 fall upon the Secretary of the Treasury when he 

 comes to exercise this power in issuing this class 

 of bonds, first, because they bear too high a rate 

 of interest, and next, because they run too long. 

 The experience of our country shows that the 

 right to redeem bonds within a short period of 

 time is one of the most important and valuable 

 properties which can be given to a bond. I, for 

 one, with my experience and knowledge of these 

 subjects, would not now be willing to issue any 

 bond running more than five or ten years at any 

 rate of interest and then redeemable at the pleas- 

 ure of the United States, because we know that 

 by changing circumstances we may reduce the 

 rate of interest and borrow money at a less rate 

 than the rate of interest we were obliged to pay 

 at the time of borrowing the principal or issuing 

 the bonds. 



"Then there was another trouble. If the 

 Secretary of the Treasury was called upon to 

 issue 4-per-cent. bonds, if he should date them 

 as of the date of 1877, they would mature in 

 1907. So that with this, the most favorable 

 bond he could issue, he would have to issue a 

 bond running for fourteen years and bearing in- 

 terest at 4 per cent. 



"Therefore it was manifest to me, as it would 

 be manifest to any one who would look at the 

 question without any feeling about it at all, that 

 if we could borrow money at 8 per cent, on 

 bonds running for five years or for a short period 

 of time, always reserving our right to redeem 

 these bonds within a short period, it would save 

 a vast sum to the people of the United States, at 

 least one fourth of the interest on the bonds, 

 and we would save-more by the right to redeem 

 them if a favorable turn in the market should 

 enable us to do so." 



Mr. Wolcott, of Colorado, said in criticism 

 of the Sherman amendment : 



" Mr. President, it is very apparent that the 



