en completed. In the meantime I wish to keep steadily
in view the sale of the balance of two hundred million four and a
half per cent. bonds, and, if possible, I wish to make the necessary
calls during this month and next.

"You can assure Messrs. Rothschild of every disposition on the part
of the government to meet their views, and to extend the contract
with the necessary modifications. Their efforts in maintaining
the credit of the bonds and securing this result will be highly
appreciated.

"I would like to have you write me at least twice a week as fully
as practicable.

"Very truly,
"John Sherman.
"Mr. C. F. Conant, London."

As the process of redeeming called bonds required a notice of ninety
days, I postponed the termination of the existing contract until
after that period. My purpose in terminating the contract was to
substitute for sale the four per cent. bonds of the United States
instead of the four and a half per cent. bonds. I believed that
the advancing credit of the United States would justify this
reduction of the rate of interest. Another reason for this step
was that, in addition to refunding at a lower rate of interest, I
wished to commence preparation for the resumption of specie payments
on January 1, 1879, according to law. This could only be done by
the sale of bonds for gold coin. I reserved the remainder of the
four and a half bonds, amounting to $100,000,000, authorized by
the refunding act, for resumption purposes in case the four per
cent. bonds could not be sold at par in coin.

Another reason for a change in the existing contract was that it
gave to the syndicate a monopoly in the sale of bonds while I wished
to sell the bonds directly to the people. The new contract was as
follows:

"This agreement, entered into this 9th day of June, 1877, between
the Secretary of the Treasury of the United States, of the first
part, and Messrs. August Belmont & Co., of New York, on behalf of
Messrs. N. M. Rothschild & Sons, of London, England, and associates
and themselves; Messrs. Drexel, Morgan & Co., of New York, on behalf
of Messrs. J. S. Morgan & Co., of London, and themselves; Messrs.
J. & W. Seligman & Co., of New York, on behalf of Messrs. Seligman
Brothers, of London, and themselves; Messrs. Morton, Bliss & Co.,
of New York, on behalf of Messrs. Morton, Rose & Co., of London,
and themselves; and the First National Bank of the city of New York--

"Witnesseth: That the said