This new agreement gave at once a great impetus to the new loan in all parts of the United States, as well as in London. The following letters received indicate this:

"Merchants' National Bank, } "Cleveland, O., June 11, 1877.} "Hon. John Sherman, Secretary Treasury United States.

"Dear Sir:--We learn that you propose to offer the public a certain portion of the new four per cent. loan for a limited time, the amount subscribed to be paid in gold at the par value of the bonds.

"This bank, being a public depositary of the government of the United States, shall be glad to further your plans, and act as agent for the sale of such portion of the loan as you may suggest, and endeavor to give it such publicity as would secure the sale of a portion of these bonds in this part of Ohio.

"Wishing you success in the effort, I remain, very respectfully and truly,

"T. P. Handy, President.

"Treasury Department, June 12, 1877.

"John P. Hunt, Esq., Philadelphia, Pa.

"Sir:--Your note is received. The department will be happy to receive your subscription in a short time. The bonds are not prepared, and the treasury regulations for the popular subscription cannot be issued for a few days, when a copy will be sent you.

"It is the purpose to give you, and all other citizens of the United States, an opportunity to subscribe at some convenient place in the city of your residence, to be designated in due time, requiring only a small deposit at the time of subscription, and allowing the privilege of paying at any time within ninety days thereafter.

"The bonds will bear date the 1st of July, and will be sold at par in coin and accruing interest to date of payment.

"Very respectfully, "John Sherman, Secretary."

Contemporaneous with this contract for selling the four per cent.

bonds for gold coin, there appeared in the New York "Times" a suggestion that these bonds could be paid in silver. Henry F.

French, a.s.sistant Secretary of the Treasury, in a published letter of the date of June 11, a.s.serted his opinion that the bonds issued under the act of July 14, 1870, for refunding, were redeemable in coin of the standard value at that date, and that "as it cannot be known what bonds have been transferred since the act of 1873, all bonds under the act of 1870 must be paid in gold coin of the standard value named in the act of 1873."

I received a letter from Messrs. Seligman & Co., inclosing an extract from the New York "Times," as follows:

"New York, June 12, 1877.

"Hon. John Sherman, Secretary of the Treasury, Washington.

"Dear Mr. Secretary:--We beg to inclose a short editorial article which appeared in to-day's New York 'Times,' which, coming from a Republican paper, may frighten investors in our country and abroad.

Intelligent people know that you, sir, as well as President Hayes, are sound on the silver question, and yet it may appear to you proper, and highly advantageous to the prompt marketing of the four per cent. bonds, to disabuse those who have been led to believe that the President and you favor the remonetizing of silver, with a view of paying our national debt in a metal so fluctuating as silver has become since the princ.i.p.al nations of Europe have demonetized it. We remain, dear Mr. secretary, your obedient servants,

"J. & W. Seligman & Co."

The article in the New York "Times," of June 12, 1877, said:

"In a dispatch received by the Secretary of the Treasury yesterday from Mr. Conant, the syndicate agent in London, it was stated that the contract touching the four per cent. bonds is well received in London, and the new bond bids fair to be the most popular of American securities. There is no doubt that the bond has many advantages both for home and foreign investors. It has only one point of weakness, and that is, if the silver ring should succeed in getting an unlimited issue of legal tender silver dollars, this bond would be payable, princ.i.p.al and interest, in that coin. Shrewd men, who know what silver has done and is liable to do in the way of ups and downs, will take this fact into consideration, and the government will ultimately be compelled to do the same. At present the strength of the silver movement is estimated to be small, but if this estimate should prove to be mistaken, the new four per cents. would suffer."

Mr. August Belmont wrote me a letter upon this subject of the date of June 14th, in which he said:

"Permit me to add a few words to the letter of my house of this day, in order to urge upon you the _vital_ importance of an official expression of yours _over you own signature_, in the sense of the letter of a.s.sistant Secretary French, published in this morning's papers.

"You are placed at this moment, by a large portion of your political friends, in a somewhat similar position as the late Mr. Chase was by the attempt of Thad. Stevens to have Congress pa.s.s a law to declare the princ.i.p.al of the 5-20 bonds payable in currency.

"Mr. Chase took the bull by the horns by declaring, over his own signature, that the princ.i.p.al as well as the interest of the 5-20 bonds were payable in gold, the faith of the United States being pledged to this by the tacit understanding of the government and its creditors.

"Nothing has reflected more credit and renown upon that great statesman--then as prominent and favored a son of the n.o.ble State of Ohio as you are to-day--and nothing more effectually paved the way to the great work of reducing the burden of our people by lowering our interest one-third than that expression, sanctioned and confirmed by subsequent enactment of Congress in 1869.

"You will, in my opinion, insure the success of your financial measures, and add greatly to your high and prominent political position, if you will unequivocally declare that the funded debt of the government can only be redeemed, princ.i.p.al and interest, in gold coin, and that until otherwise agreed upon by the mutual consent of the great commercial nations of the United States, England, France, and Germany, the silver dollar can only be accepted as an auxiliary standard for the payment of fractional indebtedness."

To this I replied as follows:

"Treasury Department, } "Washington, June 16, 1877.} "Dear Sir:--Your private note, the letter of your firm, and one from Messrs. Seligman & Co., asking me to make a public statement over my own signature, similar to that of Mr. French, are received.

I have given to this important suggestion the most serious consideration, and have come to the firm conclusion that such an act on my part would be inexpedient, and defeat the very object you have in view. As a purely executive officer, I have no power to pa.s.s upon the question mooted. My attempt to do so would at once unite all those who are seized with this mania, and those who oppose executive encroachment upon legislative power. It would create excitement, personal and political animosities would mingle with it, and it would tend more than anything else to defeat the success of the law. I am quite sure this would be the result.

"As to whether Congress or the people would ever undertake to pay either princ.i.p.al or interest of the bonded debt, and especially the bonds sold since 1873, in silver, I have a firm conviction that the question will never seriously be raised. These bonds will be paid, princ.i.p.al and interest, in gold coin. The people of the United States have always been extremely sensitive as to the public credit. They never have, for the sake of an apparent profit, yielded any question involving the public honor.

"The great satisfaction that will arise from the funding of the loan at a low rate of interest, together with their strong sense of public honor and public faith, will always secure the payment of these bonds, princ.i.p.al and interest, in coin.

"Parties or factions may, for a time, raise and contest questions, but they are but bubbles, and will pa.s.s away, and, like all other questions involving the public credit, will be rightfully settled, in due time, by Congress and the people.

"Nothing would so tend to disturb this result as unauthorized 'theses,' or dogmas, by an executive officer, upon a question purely legislative or judicial. Indeed, it may be that too much has already been said about this matter by both the President and myself, and I a.s.sure you that you will have no occasion to be disturbed by anything truthfully reported of either of us hereafter.

The better way is to move right along, making your own statements, and if, at any time, I see a proper occasion for a strong expression of my opinion, I will give it.

"Please show this to Mr. Seligman, and such of your a.s.sociates as you deem proper, as an answer to all.

"Very truly yours, "John Sherman.

"Hon. August Belmont, New York."

The new loan was promptly placed on the market on the 14th of June by the following circular letter signed by the members of the syndicate:

"Under the authority of a contract with the Secretary of the Treasury, the undersigned hereby give notice that from this date until July 16, at 3 p. m., they will receive subscriptions for the four per cent. funded loan of the United States in denominations as stated below, at par and accrued interest in gold coin.

"The bonds are redeemable after thirty years from July 1, 1877, and carry interest from that date, payable quarterly, and are exempt from the payment of taxes or duties to the United States, as well as from taxation in any form, by or under state, munic.i.p.al, or local authority.

"The interest on the registered stock will be paid by check, issued by the treasurer of the United States to the order of the holder, and mailed to his address. The check is payable on presentation, properly indorsed, at the offices of the treasurer and a.s.sistant treasurers of the United States.

"The subscriptions will be for coupon bonds of $50 and $100, and registered stock in denominations of $50, $100, $500, $1,000, $5,000, and $10,000.

"The bonds, both coupon and registered, will be ready for delivery July 2, 1877.

"Forms of application will be furnished by the treasurer at Washington, the a.s.sistant treasurers at Baltimore, Boston, Chicago, Cincinnati, New Orleans, New York, Philadelphia, St. Louis, and San Francisco, and by the national banks and bankers generally.

The applications must specify the amount and denominations required, and for registered stock the full name and post office address of the person to whom the bonds shall be made payable.

"Two per cent. of the purchase money must accompany the subscription.

The remainder may be paid, at the pleasure of the purchaser, either at the time of the subscription or at any time prior to October 16, 1877, with interest added at four per cent. to date of payment.

"The payments may be made in gold coin to the treasurer of the United States at Washington, or a.s.sistant treasurers at Baltimore, Boston, Chicago, Cincinnati, New Orleans, and St. Louis, and to the a.s.sistant treasurer at San Francisco, with exchange on New York, or to either of the undersigned.

"To promote the convenience of subscribers, the undersigned will also receive, in lieu of coin, United States notes or drafts on New York, at their coin value on the day of receipt in the city of New York.