"Inform the contracting parties and accept no new subscriptions."
On the 4th of April, 1879, I had the satisfaction of issuing the 95th and 96th calls for 5-20 bonds, covering all the bonds outstanding issued under the act of March 3, 1865, and the last of the United States 5-20 bonds. The early twenty year bonds, issued during the first two years of the Civil War, were not yet due or redeemable, and, therefore, could not be called for payment. This was a practical illustration of the importance, in issuing government securities, of reserving the right to redeem them before maturity.
The rapid and irregular subscriptions made on the 4th of April involved the department in serious difficulty in determining who of the many subscribers were entitled to the bonds. The aggregate of subscriptions was more than double the amount of 5-20 bonds outstanding. By adopting a rule of accepting bids made before a fixed hour of that day, and by voluntary arrangements among the bidders, a distribution was made.
The only serious controversy in respect to this distribution was upon the claim of the Rothschilds that they had option extending to the 30th of June for ten millions of bonds, and for one million extended from April 1 to April 8. The latter was allowed, but the department held that the option for ten millions June 30 was dependent upon whether the bonds were previously sold, and this occurred on the 4th of April. This gave rise to a controversy which was settled by the voluntary transfer, by the National Bank of Commerce, of ten millions of the forty millions bonds subscribed for by it. Rothschild, the head of the house, would not accept this offer, but, with some show of resentment, declined to receive his share of the bonds, but they were eagerly taken by his associates.
The 5-20 bonds having been paid off or called, the department proceeded, as soon as practicable, to execute the laws of January 25 "to facilitate the refunding of the national debt," and February 26 "to authorize the issue of certificates of deposit in aid of the refunding of the public debt."
On the 16th of April I published the offer of $150,000,000 four per cent. bonds at one-half of one per cent. above par and accrued interest, and reserved $44,566,300 of these bonds for the conversion of ten dollar refunding certificates.
The following telegrams, addressed to the Secretary of the Treasury on the 17th of April, tell the result:
From the Bank of New York National Banking Association, New York:
"Send two millions four per cent. bonds under terms of to-day's dispatch."
From Chase National Bank, New York: