oad; and a contract has been made with bankers
having houses in London, on precisely the same terms as were extended
to all in this country. It was thought that this would be best
for the domestic loan. No contract of arrangement will be made to
interfere in any way with the free, open, popular subscriptions in
the United States.

"I am glad to notice your success and will give you every facility
that is extended to anyone else.

"Very respectfully,
"John Sherman, Secretary."

The sale in London was fully justified when the called bonds matured,
and those held abroad were paid for without the exportation of
coin. It was my desire to secure the exchange of four per cent.
bonds directly with the holders of the six per cents. For this
purpose I invited, by a department order widely circulated, such
an exchange, allowing to the holder of any six per cent. bond,
whether called or uncalled, the same commission and allowance for
interest granted to banks and bankers. By these expedients I hoped
for, and succeeded in conducting, the change of bonds without
disturbing the ordinary current of business.

The process of refunding the 5-20 six per cent. bonds, by the sale
of four per cent. bonds, went on with some fluctuations until the
4th of April, 1879, when all the six per cent. bonds then redeemable
were called for payment. This period in the magnitude of business
done was far the most active and important while I was Secretary
of the Treasury. The struggle between banks and bankers, not only
in the United States but in London also, gave rise to many questions
which had to be promptly acted upon, chiefly by cable or telegram.
The amount involved were so large as to induce caution and care.
The principal difficulty in refunding arose out of the provision
in the act of Congress that ninety days' notice should be given,
to the holder of bonds, by the government, when it exercised its
option to pay, after five years, any portion of the bonds known as
the 5-20 bonds, payable in twenty years but redeemable after five
years. Prudence required the actual sale of four per cent. bonds
before a call could be made or notice given to the holders of the
5-20 bonds, designated by description and numbers, of the intention
of the government to pay them. When sales were made the money
received was deposited in the treasury of the United States, or
with national banks acting as public depositaries, which were
required to give