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

Financial Position of Federal America,

The loans and bonds of the Northern States beat
a much higher interest than the debt of European
Powers. To bring the apparent rate of interest on
the debt down to 3 2-33 per cent,, the Washingtoo
pamphleteer includes the debt which he considers is
not bearing interest, and so strikes his average. Pr
obvious reasons this mode of calculation must be
rejected. Tiae American loans,'in fact, have been
contracted at rates of interest varying from 5 t°
7 3-10th 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 than
it looks if the total of the principal is only regarded'
The average rate of interest on interest-hearing
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 resP°ll"
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—with
£300,000,000 sterling bearing interest at silx per
cent., are as wild as their boastful comparisona
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 cool'
Imitation were well-grounded, it would suppose
political stability in the residuary States
there is no reason to expect. It would a!,so require
moral qualities in the American nation that ttlef
are known not to possess. The maintenance f
the Federal bond in the North, with DeoocraC
and Republican tugging in different direc-
tions, for a quarter of a century, ill °-
improbability so great, that the world ca/is
build nothing on a hope so delusive; and it is
equally an improbability that, even if the bond
were preserved the taxes would be borne by 8;
people who have only to excite a popular clara°ll
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 :Merest oiti
the debt, and provide for its extinguishment
the period already specified. Let us see how thos
matter stands. The total peace expenditare wa
133,000,000 dollars. With 56,500,000 dollars,
therefore, the debt is to be appease& and fiiunsalnlyo
wiped off. If there were really such
a willingness of the
doubt a great deal could be done.su PBut if
the tax-bearing resources and
Northern States stand at the limit of 189,50000
Irfmain.der to apply
dtooltlhahere is an obvious
ersp,
uthrpeoreseswoilfl b
thee nod debt. 'j
the fut are expenses of the
fallacy in calculating
aref nelnetre entering B:pa:jab:
no one :an undertake t°
twietsziestoenn:ietions and necessities will be.
Americannat nation by
Statesthe standard
tnhdea rNadnodrothf
denefitinreelywile
It is absolutely certain, however, that its expends'
ce gr°°(l.l
ture will be more in keeping with European then
American precedents, and we cannot s
for assuming that the nation's resources
go on augmenting in the same ratio °5
in the earlier periods of the history of the United
States. Not only must an army, and probably
involve
very large one, be maintained, in order to protect
t
an arbitrary frontier, and to prevent surprise, bud
that
army m
wey will
know itself create
ipoliticalwday
ifficulties, all
and outlay. It may create war by a demoratic 113;
solence which there will be no proper power
in
popular Executive, distracted by quadrennial
tests for the Presidency, to repress. Conflicts
the South, with Canada, or of one State with anotlit;
(most likely of all), will break in rudely urn ast
amiable and honest scheme of the tnen of the
for the annihilation of the National Debt.
.1.14„0_
calculation us to its redemption in 12 years, or 1.
are in short a delusion. Americans—the Norttn_cb` 0
nation and the Southern both—are henceforth fay"
saddled with a national debt from which they "'end
of trouble
not shake themselves free, except by revolutio.notaoy
has l
er-
diehonoter. The madness of the North
duced the people of the residuary States to thened
nianent disgusts of grievous taxetion, and taall_.,di,
upon them necessities which seem to involve a 'P.....
eel change in their principles of Governell"
Dublin Unit:et' 6ity Naqw.-ine.