Weekly national intelligencer. [volume] (Washington [D.C.]) 1841-1869, 1864-05-12
HOW TO PRESERVE THE PUBLIC CREDIT.

finances, made to the Thirty Seventh Congress
convened on the 4th of July, 1861, in extraordi-
nary session, careful to include n his measures
for the preservation of the public credit an ade-
quate provision by taxation for the punctual pay
ment of the interest on loans and for the creation
Of a gradually increasing fund for the redemption
of the principal" In his annual report for De-
cember, 1861, he renewed the expression Of this
opinion in the following terms:
Already 10 former report the Secretary has had the
honor of stating the principles by which, he conceves
the proportions OF taxation and loans should be deter
mined Reflection has only confirmed his opinion that ade-
quate provision by taxation for ordinary expenditures
prompt payment Of interest the public debt existing
and authorized and for the gradual extinction of the prn
cpa Is Indispensable to sound system Of finance. The
idea OF perpetual debt is not Of American nativity and
should not be Daturazsd"
1t is known that the public debt entailed by the
Revolutionary war was gradually extinguished by
the financial plan of Alexander Hamilton That
plan, as communicated in his celebrated report of
January 8, 1870, and as expounded in subsequent
reports, proceeded on the following principles
First To constitute fund sufficient in every suppo-
sable event for extngusbug the whole Of the present debt
OF the United States in period not exceeding thirty
years."
Second. To fix its destination unchangeabIy by not
only appropratng permanently under the direction of
Commissioners, and vesting it in them property in
trust but by making its faithful application part Of the
contract with the creditors.'"
These principles were embodied in the legisla-
ton of Congress, and it was the system thus inau-
gurated and established which restored the public
credit of the country and led to the extinction of
the public debt By the act Of August 4, 1870,
commonly called the funding act" it was provided
that, after reservation made for the payment Of
of the receipts from customs should be "appro-
pratcd to the payment of the interest on the loans
heretofore made by the United States in foreign
countries, and also to the payment of interest on
such further loans as may be obtained for dis
charging the of interest thereupon, and the
whole or any part of the principal thereof" And
to this it was added that the said surplus of re-
ceipts, over the sum thus reserved, should coon.
tnue so appropriated until the said loans shall be
fully satisfied"
In an act approved August 10, 1890, making
further provision for the payment of the debts of
the United States, by increase of the duties on
imports, it was enjoined in the 7th section of the
act that " the several duties imposed by this act
shall continue to be collected and paid until the
debts and purposes for which they are pledged and
appropriated shall be fully discharged provided
that nothing herein contained shall be construed to
prevent the Legislature Of the United States from
substituting other duties taxes, of equal value
to any or all of the said duties and imposts."
And in the act approved August II, 1870,
making provision for the reduction of the public
debt, it was enacted that "the surplus revenues
from imposts should be applied to the purchase of
the debt of the United States at its market price,
if not exceeding the par or true value thereof"
The purchase of this debt was not authorized to be
made by the Secretary of the Treasury alone, but
under the direction of the President Of the Senate,
the Chief Justice, the Secretary of State, the
Secretary of the Treasury, and the Attorney Gene
raj for the time being.
By the act of May 5, 1892, these officers were
appointed commissioners" to purchase the debt
Of the United States out of fund created for that
purpose. This fund was to be applied as follows !:
constituting the debt Of the United States their respec
tive market prices not exceeding the par or true value
thereof and nearly may be- equal proportions un-
til the aDpua amount of the said funds together with any
other provisions which may be made by law shall be equal
to two per centum Of the whole Of the outstanding
funded stock, bearing present interest of six per
thenceforth secondly to the redemption OF the said last
mentioned stock according to the right for purpose
reserved to the United States, until the whole amount
thereof shall have been redeemed and lasy after such
redemption, to the purchase at its market price of any
other stock consisting of the debt of the United States
which may then remain unredeemed and such purchase
far the fund shall at any time shall be made
ery payment OF interest the debt Of the United States
shall become due, and shall be made by known agent to
be named by the said commissioners
Sec g. And be further enacted, That all future pur.
chases OF public debt account OF the United States shall
be made at the lowest price which the can be OBJ
tanned by open purchase by receiving sealed proposals.
to be opened in the presence Of the per-
authorized by them to make purchases and per-
making such proposals.
"Sec. g. And be further enacted That quarter
accounts of the application of the said fund shall be rem
dered for settlement, other public accounts sccompa
MED with returns OF the Of the said debt which shall
have been from time to time purchased redeemed and
full and exact report Of the proceedings of the said com
mssioners, including statement of the dsburseme nts
which shall have been made and Of the sums which
shall have been purchased redeemed under their d.
shall be laid before Congress within the first fourteen days
of each session which may the present. during the
execution of the said trust"
By the act Of March 8, 1895, it was provided
that the moneys accruing to the sinking fund un-
der that act, and under all preceding acts, should
be under the direction of the above designated
officers as commissioners of the sinkino fund