Richmond enquirer. [volume] (Richmond, Va.) 1815-1867, 1827-12-25

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happen in the actually existing state Of things IN
ground only OF such depression, if any, must be ~
large increase Of supply while the 1sA,iann -
and no more, continues to exist Such state OF
things would impinge upon the general prnci,l.
FIRST stated by altering the proportion between Do
inand and supply. But such state of things viii
exist, should the present proposition prevail; TO-
there II, and has been for these three years pas,
diminished quantity Of Government stock 20 h.
sold, and an increased amount of means to buy :.
both occasioned by one and the same cause, nam
ly-the paying off of large portions Of the publ
debt by the redemption of U. States Stock
During the year 1925, we paid of the pripci,
OF the public debt more than seven and half M
lions; in 1926, more than millions; and durir
the present year, 1927, shall have paid mo-,
than six and a half millions more; making, in All
an amount OF twenty and about quarter mi
lions. The Secretlry of the Treasury, howeya,
informs Us in his Report, that five millions of n;
debt has been paid by the issue Of a new stock.
VIII therefore, he proper to deduct this; and t,c
result will be, that in these three years. there ho
been actually paid oil than sixteen million
OF the public debt. To this let Inc add that. 40
cordinS 10 the statements relative 10 the Sinknr
fund, ana the present condition of the Funie1
Debt, there will be paid, i'll the year 1928 seven
millions more: and in the years 1929 AMI 1880 al,
amount wen beyond this, (bcing ENLARGED hy tbS
increased activity of the Sinking Fund from n
circumstance OF large amount now devoted 10 H.
terest, becoming applicable to the principle of H.
debit Reckoning, then, that, during the veaH
1879, u nni Z, sixteen millions have been paid am
that IN 1927, g. and 9, twenty one million, moe
wan nave been paid, here will have been an o.
mount OF hsTfy-Scccn millions of the public debt
oil the u States, paid off in sic gears.
Have any violent shocks been produced hy this
operation! Has any arrangement resulted il, the
ilnanciai arrangements of the country, Has L
States stock iallen' l apprehend not And wny;
FOR the reason have stated, and which now
Apply TO the proposition before US and from which
very excessive consequences necessarily follow
gong 10 show that the effect of the payment OF
ia of tl,,, lii
uninish, but to Increase the ice of the residue
When, iii the British Govt their sinking fund
was established, in the year l7S6, it was held ne
cesSary 10 NIX maximum for its operation, lest too
great AN amount OF money should thereby be
thrown into the market. II will be nv cndeavor
10 shew that, with us with them, the effect OF
paying OIL the debt produces an abundance of mo-
hey' ana therein an abundance of the means oil
purchasing the bank stock which the same opera
ton has thrown into the market While the for
her owners OF the public stock, have in Their
hands money which seeks investment the sale OF
.he pahk stock VIII be an admirable mode by which
this may be accomplished. Applying the principlol
with which he set out, Mr.. b. remarked, that I'll
would De apparent that if any depression was 10
result, 1t would rather be produced by paving tho
oepi III money than by exchanging il for banL,
s'ock; by redeeming the national stock, money
which was before safely invested is thrown into tb.
market, & naturally seeks some new employment
NOW, propose, said Mr.. Is. while this is dome 10
carry ihto the market an equal amount of stock in
| ~. m
uemen apprehend Il depression in the price Of
stock Why: Because, say they, there win be
100 large an amount OF it for the money which is
prepared 70 be vested in it. But my proposition,
10 us Whoie extent, goes TO pay off much of the
Puolc debt and thereby TO furnish the means Of
purchasing--in addition to which, seven millions
more Will be derived next year from the operation
OF tne sinking fund The conclusion, from view
Vi uiese iacts would seem TO me to be- that il IS
next to impossible that depression can be prof,,c
ed IN the price of bank stock by an operation
winch while it exposes that stock TO SALE supplies
at the same time, the means and the ind,cemcnt
/ for pu rchasing it.
| i do not mean to advocate the old, and what
understand TO be now an exploded doctrine that
I the payment of the public debt is an addition 70
the actual funds OF the nation. The effect Of that
payment is only TO let loose so much capital from
permanent investment: it creates no new capital
but 1t adds to the amount of capital seeking invest
ment. Here, then, there will be combination of
me very two circumstances which operate to liz
crease the price OF commodity viz: increased
demand and diminished supply-the one created
by paying off so much N the public debt, tn.
other by diminishing much of the public funded
stock.
Mr. B. here presented the result of some ca,cu.
iations which he had made, with view to shew
how far facts went to Justify the principles he had
iaid down But, before he exhibited them he
wished 10 premise that they had been made from
the best information he could Obtain that thew did
not aim at mathematical NEUTRALITY-SUSPICIOUS., and
even small sums not fractional having been discar
ded. (for example, he had taken no notice of the
difference resulting from the receipts of dividends
from the Bank, being half yearly, while the pay
ments OF interest on the public stocks were quarter
iy) His OBJECT was to approximate the truth in
It's great outline, without attending to its minutes
parts. He would first endeavor 10 show what was
the present average rate of profit on capital in the
u States. The per cent. United States stocks
are at this time selling az per cent of their nomi
nal amount
Taking them at 81 per cent the actual annual
nv he n
per cent. But as this description of stocks were
redeemaDle at par at the pleasure of the Govern
inent, he had not included them in the statement
he was about TO submit. OF the 4 IL pcr cent
redeemable i'll 1920, 30, 81, 80, 80 and 81, there
were, he understood, but one kind now in unarket:
which kind it was he could not saw, but he pre-.
sumed that soonest redecmable The per cents
ranged from to per cent advance-he would
take the medium at l-2, but as this included
the dividend oil the present year, that amount must
be deducted, which would leave them at Ia.
lie that purchased this stock at that rate would
receive an annual income of about So 33 cents on
every SlOO. The per cent stocks of 1881 were
at from IL to 9 1-2 advance--he would take the
average, per cent.-he who laid out SIO7 10 cts
In tins stock, would receive an annual interest OF
IL per cent. on the stock until its redemption
MT d. SAID he introduced these quotations of pri-
ces TO shew that oth0r stocks than Bank Stocks now
yielded an average profit of from Ii to 3 I-2
per cent. only. If The House was surprised az
TINS low rate OF profit, he would proceed 10 shev
why the investment of money in these stocks could
be afforded by the capitalist. He had been told
from the highest authorities, and among Others
from that OF the first Secretary of the Treasury
lhr. Hamilton) in his celebrated report on the
funded debt, that any stock which was well and
securely funded, which enjoyed the public conf.
0Gnce W wa fro,, rratIa l..