The Sun.
London, England, 1868-07-27 00:00:00

PRICE . . 4d.
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THE SENATE'S FUNDING BILL.

(From the Anglo-American i imes.)

The Repudiation planks put into the -Democratic-
platform have evidently stirred Cougre-gi to action,
and induced the Senate to pass the Funding Bill of
the 15th instant. A measure settling the National
Debt beyond cavil, renders useless these planks, and
deprives the Democrats of their most effective cry.
Such a law makes the bonds like property in land,
railways, bank shares, stocks, and in wtgages,
placing them beyond attack, except in a way to which
all property is liable—for there will always be some
ready to howl for the possession of their neighbour's
goods, whether it be in land, in mines, in shares, or
Government loans. Much business remained for
Congress to transact, time was short, and the heated
term beginning to glare, so that the wearied Re-
presentatives panted for the shade of their own
roof-trees. But this business pressed, and it was
found necessary so to fix the National Debt that no
capital could be made out of the creditors for the
benefit of a candidate in the coming campaign and
to the injury, of the national credit. A Repub-
lican Congress found this settlement to be the
best means of checkmating their political opponents.
Although the telegram does not give us thte number
of votes, yet we may feel assured that the interests
are so strong that the measure will be powerfully
supported. As a party the Republicans will back
it as it cuts the ground from under thosnieviisstOaliiptoilidb
all who desire the final settlement of the question,
as well as those who wish to preserve the national
honour and to secure for the creditors what they
justly can. The proposal of the Senate is to issue
bonds redeemable in coin in 20 years, bearing Five
per Cent. interest in coin ; the amount issued, not
to exceed a third of the total required to exchange
at par the whole interest burin; debts of the
United States, except Five per Cent. Bon is and
Three per Cent. Certificates—to make a similar
issue of 30-year Bonds at Four and a half per Cent.
and of 40-year Bonds at Four per Cent., the inte-
rest to be exempt from taxation other than the
ordinary income tax and the exchange optional.
This differs materially from the Repudiation pro-
positions, of which there are four. The first was
to pay off the bonds as the opportunity offered with
greenbacks printed for the purpose. The second
was to pay in greenbacks as the Treasury was able
without increasing the currency ; the third was to
tax the interest, which left it optional with Con-
gress whit portioa of the debt they woal I
annihilate ; and the fourth was t o lower the rate of
interest, forcing the creditors to exchange their Bonds
by the threat of immediate payin eat in greeubacks.
The latter plan differs fro:n the bill passed by the Se-
nate, inasmuch as that offers equivalents for lea
sened interest, not a threat, as the indacement to
exchange. The first equivalent is the guarantee on
the face of the Bond of its releaKotien at a fixed
time in csin, decreed by a law of the land. This
would he a good substitute for the 5-20 Beads without
the guarantee expressed, however distinctly implied,
the holder being offered peace of min I and se-
curity as regards his capital in return for the sacri-
fice of a portion of his interest. In the next place,
it settles the Repudiators, who direct their shafts at
the coupons instead of at the bonds, as it enacts that
the interest shall be payable in coin as now, and
be free from all deduction, except ordinary income
tax. Those who regarded with apathy a remote
[ danger affecting the capital were liable to such a
deduction of income as Congress might decree, and
the security offered by such a law is to them a boon
worth paying for. The third is a real equivalent, as the
others may be said to be dangers created by the very
people who require payment for averting them, which
means " black mail." But in offering a lengthened
term of well-secured coin interest, the Senate pro-
poses a thing of marketable value. At this moment.
money is a drug in all the chief marts of the world.
Men have learned, more especially in kluglasid, by
the very bitterest experience, the truth of the say-
ing that high interest means bad security. The terms
now proposed will suit vast numbers who are at a loss
for an investment, as they give a long spell with the
best security—so considered in the country—
without the chances of the money being sud-
denly returned. No scheme was advanced to
repudiate the debt of the United States, ex-
cept according to a seemingly fair legal inter-
pretation. Even many of those who had most
strongly opposed payment in greenbacks as dis-
honourable to the country and ruinous to its credit
felt that the letter of the law might be in favour of
their opponents. Messrs. BUTLER and STEVENS
made the law their strong point, and no proposals
were announced which travelled out of it. It is thus
reasonable to suppose, that the agitation derived its
strength from the very cover given to it by law, and
in this bill all that must go and for ever. Suppos-
ing this to be so, and that the Senate's bill dispels
agitation in the future, as a permanent settlement,
the terms offered by the United States are fair. Cal-
culating as secure the willingness of the people to
pay, their ability we hold to be beyond dispute.
The difference between the want of credit of Aus-
tria, of Italy, even of Turkey, and of the United
States, is that the will of the latter is doubted,
while the ability of the others forms the ground-
work, and this is more creditable to the energy and
enterprise of the Republic than to its honour. But
it is well to have a solvent creditor, for there is no
pursuit more vain than of a man of straw. Not only
have we solvency in the United States, but the abi-
lity possessed by few other nations of paying off
the principal in a few years. The question, then, of
security reduces itself to the finality of the Senate's
bill. Now, although we do not think any measure of
Congress could stop lectures, articles and stump
speeches, on the poor being taxed to pamper the rich
bondholders, an agitation, which will die out as it
did in Great Britain, yet we are convinced that the
bill will extract all its heart, and reduce it to mere
harmless talk. With then the double security of
ability and willingness to pay, the United States
Bonds become one of the best investments open,
and will be valuable in proportion to the time they
have to run. The Senate calculate that the ex-
change of a Bond the Government have now a right
to pay off for one which secures 5 per cent. for 20
years is worth the difference of one per cent.,
that ten years more is worth a half per cent., and that
the additional ten years is worth the other half.
We do not see on what law the calculation is based ;
for it is evident that the addition of a few decades,
if each is to reduce the interest a half per cent.,
would end in the vanishing point of nothing,
wherein would be reached not one, but two absurd
extremes ; the one being no interest at all, the other
that the more ten years required to reach this point
would confiscate the money for the longer period.
Thus when the holder came to his last half per
cent. be must surrender that for the privilege of
delaying the payment for another ten years. This
is what EUCLID calls reducing the proposition to
an absurdity ; nevertheless :up to a certain point
the argument is sound, and this will be best shown
by the readiness with which the bonds for the
longer dates will be taken in America. We consi-
der it to be a misfortune for the country
that Congress has been driven into any legislation
on the subject, for we entirely agree with the Chi-
cago platform that the best way to diminish the
debt is so to improve the national credit that capi-
talists will seek to loan to the country, in which
case the interest would soon reach the lowest
market rates, just as it did with the British Go-
vernment. Beyond all, however, it is advisable
that this rending, and patching, and meddling should
cease. The repudiation of individual States has
cost the Central Government untold millions. The
present agitation against the creditors will for
years, aye, for the lifetime of the living genera-
tion, damage materially the credit of the nation,
and no man can even wildly guess what. the actual
loss in hard coin will be before the national credit
is fully restored. If we could conic to anything
like a fair estimate, we might be able to sum up,
and let their fellow-citizens know the cost of BEN.
BUTLER, of Titan. STEVENS, and other prominent
repudiators, whose respective weights in the political
arena we are better able to tell.