The Sun.
London, England, 1863-12-01 00:00:00

Financial Position of Federal America.

The loans and bonds of the Northern States bear
a much higher interest than the debt of European
Powers. To bring the apparent rate of interest 0°
the debt down to 3 2-3 d per cent., the Washington
pamphleteer includes the debt which he considers i 5
not bearing interest, and so strikes his average. For
obvious reasons this mode of calculation must b°
rejected. The American loans, in fact, have been
contracted at rates of interest varying from 5 t°
73-10th per cent. The two largest sums have been
only obtained at 6 and 7 3-10th per cent.; so that?
as national burdens to be dealt with in the future,
this gigantic pile of debt is much more serious Oa°
it looks if the total of the principal is only regarded'
The average rate of interest on interest-bearing'
loans, in May last, is admitted to have been 6 per
cent. ; and Mr. Chase has been driven to the reek'
less issuing of paper, merely to escape the res:pon-
sibility of raising money at so ruinous a price.
The visions of the Government financiers as t°
the repayment of their debt of, say, ultimately
.£500,000,000 sterling—a low computation--vvitil
£300,000,000 sterling bearing interest at six per
cent., are as wild as their boastful comparisons
with England, and their song of triumph over the
absence of taxation. They talk of extinguishing
the debt in twelve years and eight months, and at
the very farthest, in twenty-one years and eleven
months. It must be manifest that, even if this com-
putation were well-grounded, it would suppose a
political stability in the residuary States which
there is no reason to expect. It would also require
moral qualities in the American nation that they
are known not to possess. The maintenance of
the Federal bond in the North, with Democrat
and Republican tugging in different direc-
tions, for a quarter of a century, is a°f"
improbability so great, that the world o'
build nothing on a hope so delusive; and it i 5
equally an improbability that, even if the bond
were preserved the taxes would be borne b'y a
people who have only to excite a popular elan-lour
to get rid of them. In the first season of depres-
sion affecting the trading and operative classes,
they would be swept away.
But how much would require to be raised yearly
The friends of Mr. Chase say 189,500,000 dollars
would carry on the Government, pay interest 0.11
the debt, and provide for its extinguishment _e
111
the period already specified. Let us see ho, w the
matter stands. The total peace expenditure was
was
133,000,000 dollars. With 56,500,000 do .
therefore, the debt is to be appeased,
and fiat ily
wiped off. If there were really such a surplus,. no
be done. But if
doubt a great deal could
illinaness of the
the tax-bearing resources and
w
Northern States stand at the limit of 189,500,000
dollars, there will be no
bt. Tremahereinder to
is an obaPPvioll
us
to the purposes of the de
such
fallacy in calculating the future expenses of the
nation by the standard of former times. The
American States of the North are entering apon au
entirely new existence, and no one can undertake t°
define what its conditions and necessities will be'
It is absolutely certain, however, that its expeocliP
tare will be more in keeping with European that;
American precedents, and we cannot see gr9lllli7
go on augmenting in the same ratio
for assuming that the nation's resources vvic
in the earlier periods of the history of the Unite:
States. Not only must an army, and probably
very large one, be maintained, in order to pott.secti
an arbitrary frontier, and to prevent surprise, ulla
that army will itself create political difficulties, an
involve we know not what in the way of trouble
_
and outlay. It may create war by a demoraticl
solence which there will be no proper power 1
soo_,,
popular Executive, distracted by quadrennial
tests for the Presidency, to repress. Conflicts "
aer
the South, with Canada, or done State with an°ts'
(most likely of all), will break in rudely uP°llthe
amiable and honest scheme of the men of the P,1.1/
for the annihilation of the National Debt. ~0,
calculation us to its redemption in 12 years, o'.l.bera
are in short a delusion. Americans—the No“__ be
.::
nation and the Southern both— °
are henceforth t.,
saddled with a national debt from which they
and
not shake themselves free, except by revolutio¢trJ-
dishonoar. The madness of tat, North has_ e
duced the people of the residuary States to !:,3ip_ced.
maneot disgusts of grievous taxetion, and, a
upon them necessities which teem to involve
cal change in their principles of Govere °
Dublin University Magazine.