The daily Madisonian. [volume] (Washington City [i.e. Washington, D.C.]) 1841-1845, 1845-02-07
From me NJ o. P;eswas.
BRITISH REPUTATION.

Whist the English people get rid of a good share
Of their spleen by abusing the American people on
account Of tho default Of some Of the States in pro-
vding for the interest upon their debts the British
Government has a snug liule way Of its own Of re-
pudiating lis obligations. year or so ago, Sir no
bert Peel took advantage Of plethora in the money
market TO reduce the rate Of interest the British
consolidated debt one half per cent. So far from
this operation being condemned by the English peo.
pie, those VI them who did not hold any Of the re-
duced stock extolled the measure AS miracle of h.
nancal wisdom. To unde stand fully the operation
oil Sir Roberts scheme, Il must be borne IN mind
that the British debt amounts 10 over eight hundred
millions Of pounds serng-equa TO about four thou
sand millions OF dollars There Is no design or ex-
pectoton OF ever paying this enormous SUN, so that
the English debt Is in reality represented by the
amount Of interest annually due. IL will be soen,
therefore, that when Sir Robert reduced the interest
from l-2 10 per cent, be actually paid OF, BY an
act OF Parliament one-seyeDth OF the debt-equal TO
about one hundred millions Of pounds sterling or
what is the same thing repudiated the annual pay.
ment Of sum equal TO the interest on that amount.
There were circumstances attending this operation
which showed that the British Cabinet not with
out its msgyings touching lis morality Al the time
Of the reduction money, from a combination Of mer
camille causes, was abundant In London that Ii
could be had in considerable quantities for l-2 per
cent interest Now II the British Government had
right TO reduce the annual interest upon Govern
ment securities To the current interest in the money
market, why was not the reduction made in full :
The operation was morally wrong or morally right.
II wrong, the Government should not avail itself OF
accidental state Of the market To lessen ITS obliga
lions If il right the tar payers should have had
the advantage Of the full reduction TO l2 per cent
The Cabinet split the difference, appeasing their con-
sciences by the comfortable reflection that they only
half robbed the fund-hoders II may be proper here
to add that the reduction only applied TO the CONSOLE
dated debt that u.s. that portion Of that was funded
after the war by a certain act OF Parliament II
sttutes the bulk Of the debt leaving some choice
morsels, bearing higher rate Of interest, IN pny-
legged hands.
The process by which this Reputation was accom-
plished in some measure obscured the fraud of the
transaction. IL was quite as ingenious as another
plan Of reputation that has been adopted by Sir Ro
bert Peel under the name Of income tax" The
operation Of this mode Of reputation is this The
Government binds itself TO pay per cent upon its
consolidated bonds II then imposes an income tax
When the interest falls due the amount OF the tax u
deducted from the amount Of interest, and the bond
holder gets that much less than the Government con-
tracted to pay him when he loaned il his money
The principle is thus sanctioned that the Govern
ment can get rid Of its debts by an income tax for
II Il is proper TO embrace public securities in tax Of
this nature, as there is end TO the taxing power
except the patience OF the people, any amount OF the
interest may be paid annually in that way. This is
especially the case in England, where the debt is not
payable at any particular period but is permanent in
lis eharacter-the interest only ever becoming due.
reputation Of interest there under any form is,
therefore, reputation Of the debt.
Ii must be confessed that these devices are much
dainty than the downright reputation Of Mis-
sissppl or the acknowledged bankruptcy of Pennsyl
vania and other States but they quite dshon-
est in principle The reduction Of one-half per cent
upon the consolidated funds equivalent 10 the
pudiatior Of sum greater than the debts Of all the
States Of this Union; and the Income tax" repudia-
ton would wipe up the Pennsylvania debt like
sponge The difference in the several cases is only
IN name-the people in this hemisphere not having
learned TO give pretty names TO their deDquences.-
Perhaps the English bond-holder would be satisfied
If the indebted States were to lay an income tax"
to the amount Of interest due upon their bonds. Who
knows that the London clubs would not open their
arms 10 American citizens if this " new way to pay
old debts" were adopted in the United States. We
are not the advocates nor the apologsts of repuda-
ton, but we hold it more straightforward course
for nation to pay up all it csn to strain every nerve
to settle the public Indebtedness justly and honoraby,
and acknowledge the deficiency with the determine
ton to make good, when able than to get rid Of
its obligations by clipping and pairing them down by
taxing its own bonds and bouncing upon its creditors
whenever the stock market evnces redundancy of
money.