Volume II Part 14 (1/2)

(A reduced facsimile of the communication is shown below.) An attempt was made through the police and the secret service system to trace the authors.h.i.+p of the superscription. The attempt was ineffectual.

[Facsimile]

If gold does not sell at 150 within 15 days I am a ruined man. You will be the cause of my ruin! Your life will be in danger.

Wilkes Booth.

It appears in the review that Mr. Gould originated the scheme of advancing the price of gold and that Mr. Fisk was his princ.i.p.al coadjutor. It also appears that Mr. Fisk entered into the arrangement upon the basis of friends.h.i.+p for Mr. Gould, and not in consequence of an opinion on his part that the scheme was a wise one. Mr. Gould had two main purposes in view: first, the profit that he might realize from an advance in gold; and, second, the advantage that might accrue to the railroad with which he was connected through an increase of its business in the transportation of products from the West. As set forth in Mr. Gould's letter, he entertained the opinion, which rested upon satisfactory business grounds, that an advance in the price of gold would stimulate the sale of Western products, increase the business of transportation over the railways, and aid us in the payment of liabilities abroad. If the price of gold had not been advanced beyond a premium of forty or perhaps forty-five per cent, all these results might have been realized, without detriment to the public, while Mr.

Gould and his a.s.sociates would have realized large profits. When the price had advanced to forty or forty-five per cent, Mr. Gould or his a.s.sociates made calls upon those who were under contracts to deliver gold to make their margins good or else to produce the gold. These demands created a panic, and the parties who had agreed to deliver gold entered the market, and bidding against each other, they carried the price beyond the point that Mr. Gould had contemplated.

x.x.xVI AN HISTORIC SALE OF UNITED STATES BONDS IN ENGLAND

If there should be any considerable interest in the history of the funding system of the United States, the interest would be due to a sale of bonds some thirty years ago and certain incidents which could not have been antic.i.p.ated, which arose from the execution of the trust.

In the month of July, 1868, a bill for funding the national debt which had pa.s.sed the Senate of the United States was reported, without amendments, to the House of Representatives by the Committee on Ways and Means.

When the bill was under consideration in the House, I proposed a subst.i.tute. In the debate of July 21 I made a statement of the nature of my subst.i.tute, and I reproduce an extract which sets forth the first step in a policy which culminated in the Act for Funding the Public Debt, and which was approved by President Grant July 14, 1870:

”The amendment to which I wish to call the attention of the House provides for the funding of $1,200,000,000 of the public debt $400,000,000 payable in fifteen years @ 5 per cent interest, $400,000,000 payable in twenty years @ 4 per cent interest, and $400,000,000 payable in twenty-five years @ 3.65 per cent interest, the latter sum of $400,000,000 payable, princ.i.p.al and interest, at the option of the takers, either in the United States, or in London, Paris, or Frankfort.”

At that time I had not entertained the thought that I might come to be the head of the Treasury Department. Indeed, I had no other purpose in public life than to remain in the House of Representatives.

I had had experience on the executive side of the Government and also on the legislative side, and I had a fixed opinion in favor of the latter form of service.

As Secretary of the Treasury, I proposed a bill in 1869 in the line of the subst.i.tute for the bill of the Committee on Ways and Means which I had challenged in July, 1868. The bill proposed an issue of three cla.s.ses of bonds, each of four hundred million dollars, which were to mature at different dates, and to bear interest at the rates of 5, 4, and 4 per cent. It was further provided that the princ.i.p.al and interest of the bonds bearing the lowest rate should be made payable either in the United States, or at Frankfort, Paris, or London, as the takers might prefer. The provision was rejected through the influence of General Schenck, who had then returned recently from Europe, and with the opinion that the concession involved an impairment of national honor. As a subst.i.tute for the feature so rejected, I originated a plan for the issue of registered bonds, upon the condition that the interest could be paid in checks to be forwarded by the mails to the holders of bonds at the places designated by them in any part of the world. This plan is far superior to the first suggestion, as it is susceptible of a much wider application.

I have received from Mr. Roberts, the Treasurer of the United States, the following letter and statement:

STATEMENT SHOWING THE PROPORTION OF UNITED STATES BONDS OUTSTANDING JANUARY 25, 1900, ON WHICH INTEREST IS PAID BY CHECK.

t.i.tLE OF LOAN. Total issue. Registered Percentage bonds on of bonds on which interest which interest is paid by is paid by check. check.

Funded loan of 1891 continued at 2 per cent . . . . . . . . .$ 25,364,500 $ 25,364,500 100.00 Four per cent funded loan of 1907 . . . . . . . . . 545,342,950 478,195,600 87.69 Five per cent loan of 1904 . . . . . . . . . 95,009,700 64,615,650 68.01 Four per cent loan of 1925 . . . . . . . . . 162,315,400 117,997,200 72.70 Three per cent ten-twenties of 1898 . . . . . . . . . 168,679,000 109,450,060 55.09

Totals . . . . . . . . $996,711,550 $795,623,030 77.49

TREASURY DEPARTMENT.

OFFICE OF THE TREASURER, WAs.h.i.+NGTON, D. C.

_January_ 25, 1900.

HONORABLE GEORGE S. BOUTWELL, Boston, Ma.s.sachusetts.

_My Dear Mr. Secretary:_ It gives me pleasure to enclose to you a table showing by cla.s.ses of bonds the percentage of interest paid by checks. The interest on all registered bonds is now so paid. Only the coupon bonds, by their nature, are differently treated.

Your plan has worked admirably, and the drift is slowly from the coupon to the registered form, and so to an increase of the payment of interest by checks.

With kind regards, Yours very truly, (Signed) ELLIS H. ROBERTS, _Treasurer of the United States._

The plan has been adopted by corporations that are borrowers of large sums of money upon an issue of bonds, and the use of the system is very general in the United States.

In my report to Congress in December, 1869, I made recommendation of the Funding Bill, and I placed copies of the bill that I had prepared in the hands of the Finance Committee of the Senate, and in the hands of the Committee of Ways and Means of the House of Representatives.