Richmond enquirer. [volume] (Richmond, Va.) 1815-1867, 1826-02-16
i5,Oo,0o0 90
Maxim. together

| FOR Whatever balance oil tnc ueDt may remain IN
the years 1926 and 1897, to the payment whereof
in those years the means OF the Treasury ma, be
| Inadequate, the Secretary recommends a loan Of
SO 900, 900 in 1926, and Of 6,0OO,oOo in 1927, at
a rate of interest not exceeding five per cent, re-
imbursable, in equal proportions in the years 1929
and 1880; and the inducement to this arrangement,
on the part of the Government, would be, any
ing which might be made in the difference OF inter-
, est between the rate OF five and six per cent.
! If the estimate submitted by the committee be
correct, the saving TO the Government would
scarcely justify any attempt, in the present embar
raised state OF the money Market tn change The
stock to the prejudice of the stockholders.
! Bat, for the purpose Of more satisfactory illus
,raton OF the subject, the subsequent remarks of
this report will take the assumption OF the Secre-
,ary Of the Treasury TO be correct, and will sup
pose that, fit be expedent to authorize loan
exchange il should be for So,o00,0 900 in the year
| 1876, and SO ,0OO, 900 in the year 1927.
"A similar Recommendation was heretofore made,
| and partially adopted by Congress III the several
acts of 1920, 1922. 1924, and 1928.
| AT those periods, the state OF The Treasury ard
OF the public debt were different the saving TO the
Guyernme:.; was an object of greater importance,
the inducement to the stockholders more fat,erng
and the probability of etfectins loan or exchange,
| upon the terms proposed, more reasonable The
committee have considered the subject in reference
the existing of things, with all the respect
due TO the Head Of the Treasury Department.
This proposition Of loan or exchange Of stock,
bearing an interest of FIVE per centum, proceeds
upon the supposition that the character Of the
several loans by winch the six per cent. stocks
have been created, does not sdmit of partial pay
msn,s, and that no part of one loan be paid
until the of the Treasury are adequate TO pay
the whole; that, by this means, the debt may be
distributed more equally in those years in which,
upon this principle, no loan is reimbur sabe that it
would lessen the amount of expenditure on account
Of interest," and guard against the possible
laion of money in the Treasury, in those years in
which ii has been supposed it could no, lie applied
TO the reduction Of the debt.
Frequent changes in the public stocks, affecting
their value and character, are, IN general, inexpe
dent, 10 be justified, principally, by the financial
| exsencies OF the country, and great reduction in
the value OF money.
Though the present state of the national finances
may not lie adequate to the entire discharge of the
pul lie debt, soon the Government shall &C
quiIe the right to redeem it, a new loan onld not
substantially vary their condition by continuing
the debt in different form, and at less rate
Of interest. The nature of the stipulation for a
period before which the stock cannot be redeemed
is for the advantage Of the creditor. The right of
the Government is, to pay it any time at its plea
sure, after that PERIOD that, in fact, the debt is
not due until il is the pleasure of the Gov eminent
10 discharge it, In this situation are all the exist
ing six per cents and long the terms Of these
stocks remain unchanged, the time of payment is
limited, after the respective periods Of their ,eiln-
burse.uenf, only by the convenience OF the Tfea-
sury, and may be paid in any one year, or in more
wears than one, according to the pleasure Of the
United States. The advantage of throwing any
portion OF the deb. upon any particular year, by
new loan would not be nominal merely, even
convenient 10 the Government; but, as the period
of reimbursement would necessarily be prolonged,
in order TO reduce the rate of interest, the United
States would have less discretion in this respect
than they now have.
From the best information the Committee have
been able 10 acquire the present is believed to be
an unfayorable time to exchange stock, or to pro-
cure new loans on reasonable terms. The EN-.
barIassInents in the money market, both in the u.
States and Europe, Of very serious character,
and likely To- increase, rather than diminish, for
time to come. II the act of the last session,
in comparatively prosperous state Of the country
failed Of its object, it il not probable than add
ton Of one half per cent in the rate of interest,"
would, in the present condition of things. produce
better result. The Committee do not believe
loan exchange could be effected at interest
of i've per centum, redeemsble in 1920 and 1889:
and loan at en- interest OF five and half per
cent. would be productive Of little, if any, advsn-
tage,
Ifthese stocks cannot be partially paid, or, II
part of loan be Ternburs ed until the
of the Treasury adequate to discharge the
whole, then the Inconvenience of an accumula-
ton of money in the Treasury will exist, and
there will be an advantage in new loan or ex-
change of stock, bearing reduced rate Of interest,"
reieemable at those periods when the means Of the
Treasury may be benefcially applied But, nthe
opinion ofthe Committee, partial payments of any
part or the whole, of the six per cent. stocks, are
admissible and expedient.
The right Of paying offthe whole, or any part Of
these stocks, at the pleasure of the Government, at
any time after they become reinnbursable, is ex-
pressly reserved by the several acts Of Congress,
and the proposals by which the subscriptions were
auihorized the proposals for the loans Of 1913, va
Tying from the Others only, in requiring that, in
any reimbursement Of such loan, the whole stock
owned by any one individual ON the last day OF
Dec, 1925, shall be paid.
In the instance of the converted or exchanged six
per cent stock of 1907, the expedent Of partial
payments was resorted 10, in the years 1909, $780,
1871 and 1912, aud the portions TO be paid were
designated by lottery, in the stated in lie
memorandum from tie Cfice OF the Register mark
ed a, herewith submitted
The various modes Of paying offtbe public debt,
rembursable IT the pleasure Of the Government,
may be stated as follows:
I. BY paying the whole Of any loan, whenever
the means Of The Treasury may be adequate to lis
entire discharge:
This operation would necessarily lead TO the ac-
emulation Of large sums in the Treasury, increase
the expenditure account Of interest and is the
mode ordinarily adopted.
z, BY new faaror exchange Of stock feiuf5ui.