Mr. SHERMAN. Before this bill is referred I desire to make a statement as to some of the provisions of this bill for public information. t provides in the usual form for a 5%. 3year loan to be called the consolidated debt of the U.S., and to be disposed of at not less than par, and to be a plied to the ppyment of the existing national debt other thanU.S. notes commonly known as green backs. There are 2 provisions of the bill likely to excite opposition, one of which grows out of the question of taxing property in U.S. securities. It cannot be denied that a strong feeling grows out of the exemption from State taxation of so large an amount of property, and various propositions have been made to subject them to increased taxation by the U.S. While they bear interest at a rate equal to that allowed in most of the States on notes and securities subject to tax, this feeling of inequality will continue and increase. lhey are now subject to income tax levied by the U.S., but owing to the $600 exemption, now proposed to be increased to $1,000, and also to the large amount held abroad which cannot be reached, and the readiness with which the tax is evaded, it ields to the U.S. less than one 10th O 1%. on the aggregate debt. In consideration of the voluntar reduction in the rate of interest from 6 an 7 and 3 10ths%. to 5%., this bill proposes to extend the present exemption from State taxation to the income tax, and will in effect secure to the U.S. a reduction of one 6th of the present interest paid, with but the trifling loss of the income tax. The saving thus made, with a further sum, sufficient annually to amount to 30 millions, it is reosed to apply to the payment of the principa of the debt. If unin terrupted this Will be accomplished in 35 years. The effect is to pay the national debt by the saving of interest. The 2nd provision grows out of the Option given to the holders of the 7 and 3 10ths notes to demand payment in money at their maturity in 530 bonds. This option will compel the Secretary to accumulate vast sums for a contingency that may not happen, and place him at the mercy of sudden contractions whenever the notes mature, as they do in large sums at specified dates. To avoid this, t iis bill applies the common custom and law of requiring a reasonable notice by the holders of this option. The same principle was applied to the option in the demand notes of 1862, and to an ordinary hiring of a house or a servant from year to year. If no option is taken then it is held to be a choice of money, and the Secretary will have 6 months to prepare for it. I will not discuss the bill further. It is approved by the SecyTreasury and has been partially considered by the ComFinance. It will be objected that the. holders of the present bonds will not convert them, but fortunately nearly all our securities will soon be within our reach by maturity and it is the confident belief that this clean loan on a reduced rate of interest will be so fair on adiustment between the conflicting interests of the bond holders and tax payers that it will be accepted by both, and thus Represent the consolidated debt of the U.S. All the advantages proposed by the bill will be more properly consi cred when it is recrted to the Senate. In the mean time it is int right. to submit it. to the impartial test of the public judgment, for it affects the interest of every one who pays taxes or holds national securities. I move that the bill be referred to the ComFinance. The motion was agreed to. RECONSTRUCTION.