The Sun.
London, England, 1866-01-20 00:00:00

The National Debt of America.

The National debt is now reported at twenty-seven
hundred millions, in whole numbers. The Secretary of
the Treasury says that there will be a probable deficiency
of revenue for the fiscal year ending the 30th of June, 1866,
of $112,000,000. We will suppose that when all the odds
and ends of the war should be gathered in, the total debt
will reach the round sum of three thousand millions—the
figures by which it is commonly expressed.
The question before us to day relates to the payment
of this debt, which is distinguished by such handsome
proportions. Some wonder when the debt will be paid.
Others would like to know how long it will be before the
last cent shall be cancelled. Some would like to know
whether it will ever be paid or not. Others are fearful
that the Democratic party of the South and North will
attain to power and repudiate it. Some would like to
know whether it could be paid within twenty years and
have done with the burden forever. Certainly every
patriot would rejoice to see the whole debt wiped out by
honest payment within ten years; or at least a sinking
fund laid up sufficient to cancel all the bonds so soon as
they become due. Should these three thousand millions
be paid within ten years, the achievement would not be
second to the suppression of the rebellion in magnificence,
and it would afford far more astonishment to all Europe
than anything accomplished hitherto in our glorious his-
tory. We hope in a few pafagraphs to afford so much en-
couragement as to the ability of the people to pay, and as
to the practicability of paying, all this debt within ten
years that all brave-hearted, high-spirited, democratic
Americans will rejoice and feel like ordering out and pay-
ing out the full amount of cash for that great purpose.
After paying all the expenses of the Government, civil
and military, including the interest on the debt, Secretary
McCulloch estimates the amount of surplus revenue of
the year ending June 30th, 1867, at $111,000,000. This is
certainly encouraging. He further calculates that the tax
should be increased on some and be abolished on other in-
terests and still yield a surplus of $200,000,000 with which
to pay the interest and afford $35,000,000 annually to apply
on the principal, provided the whole debt be funded at five
per cent. interest.
As the surplus is put by a notoriously safe estimate at
$35,000,000, we will say that in 1867 $50,000,000 can be
paid on the principal. All statisticians who have thus far
examined the Secretary's estimates, agree that he is far
below what will be the actual result. In New York the
surplus for 1867 has been estimated at $236,000,000, in-
stead of $111,000,000 ; and the venerable statistician of
Cincinnati, Mr. E. D. Mansfield, has placed the receipts for
1867 at what ho calls a low rate, and gives us $510,000,000
against Mr. McCulloch's $396,000,000, making the surplus
of that year, aftei paying the interest, over $200,000,000.
If therefore we start with $50,000,000 as tho first in-
stalment on the debt we shall not bo extravagant. At
this rate, how long will it be before tho wholo will be can-
celled ?

To answer this quostion wo must not forget that the
business of the country is growing and will continue to
grow each year to come, provided there shall be no mis-
take in our financial management producing a business
collapse. The growth of our national wealth is at the
rate of four per cent. per annum. Of course our business
grows at something over that rate, and it will be safe to
put the annual increase of our revenue at four per cent.
Suppose the same amount of taxation be applied to this
purpose from year to year, we must increase the payment
by four per cent. for the growth of the revenue. Then
each payment will reduce the interest to be paid the next
year, which will give, say six per cent. on that payment
to be added to the next payment as the amount of interest
saved by reducing the debt. We do not think the Secre-
tary will succeed in funding the debt at five per cent. We
suppose six to be as low a rate as can be obtained. Then
there is another element to be taken into' account. The
business of the South will by the year ending the 30th of
June, 1868, be pretty fully restored. This will add to the
revenue for that year at least twenty-five per cent. There
will be a great increase for each year afterward and during
a full decade, but we will make no account beyond the
first addition of twenty-five per cent. in 1868. After that
year we count only the six per cent. interest saved, and
the four per cent. of annual increase. A table constructed
in this way gives the following annual payment for the
time required to expunge the whole debt except the
amount of greenbacks which should be kept out as a
national currency. The people desire and need this cur-
rency, and, if necessary, they would have the Constitution
so amended as to permit the General Government to
furnish them with a uniform currency, without making
the Government a banker. Let the National bank notes be
supplanted by greenbacks.
We invite attention to the table :
1867 $50,000,000
1868 63,000,000

1869
69,300,000
1870 76,230,000
1871 83,853,000
1872 92,238,300
1873 101,462,130
1874 111,608,343
1875 122,769,177

1876 18046;095

577 148,550,704
1878 163,405,774
1879 179,746,351
1880 197,720,986
1881
1882 239,242,393
1883 263,166,632

Total .$2,314,832,965
Greenbacks 730,000,000

Aggregate

These two thousand and three hundred millions will be
all of the public debt except the amount of the greenbacks
that will be needed by the year 1883 for currency. Tho
Secretary thinks that about $300,000,000 of paper cur-
rency are needed in a healthy condition. But it is useless
of even dreaming that the currency can be contracted to
anything like that amount for some years to come. The
amount of greenbacks now is over $500,000,000, and the
• National Bank circulation is $228,000,000. These banks
will have $300,000,000 out before many months, but under
the hope that Congress will provide for contracting the
bank currency and expanding the greenbacks at a slightly
less rate than the bank contraction, we will suppose that
the different periods covered by tho above and following
tables, the amount of greenbacks will be as set down
therein. Wo suppose that by 1883 tho bank circulation
has ceased, so that considering the growth of business
there will have been a considerable contraction of the
currency.
Thus it is that with this small payment of $50,000,000
in 1867 we shall have the whole debt wiped out in seven-
teen years !
But suppose that the taxes be not reduced in the aggre-
gate, and we take Secretary McCulloch at his word that
there will be $111,000,000 surplus in 1867. We will call
it but $100,000,000, and starting with that amount as the
first payment, let us see how long it will take to settle the
whole account :
1867 5100,000,000
1868 135,000,000
1869 148,500,000
1870 • . 163,350,000
1871 179,685,000
1872 197,653,500
1873 217,418,850
1874 • 239,160,735
1875 ..
1876 289,384,489
1877 .. 318,222,868

Total $2,251,452,270
Greenbacks

Aggregate $9,836,452,270

The amount of greenback circulation needed in 1877 we