Daily Richmond Whig. [volume] (Richmond, Va.) 1865-1869, 1865-07-29
THE GOVERNMENT CREDIT.

A financial pamphlet, endorsed by Mr. Jay
Cooke in which the writer argues that the ma
tonal debt will prove blessing rather than an
injury to the country, has been extensively ridi
culed by the Northern press. We have not read
the pamphlet in question but can readily perceive
that il is very unjust 10 condemn IL by the redHc
ito cd GbSurdHm some of its critics have done,
after the fashion of the lrishman, who, when ad.
yised to buy stove because he would thereby
save half cord Of wood, asked if he hadn't bet.
ter buy two stoves, and save a whole cord. The
national debt is enormous, and every well.wisher
OF the country must sincerely desire its reduction
but If it can be kept within its present limits and
nothing occurs TO impair the credit of the Gov.
eminent, the disadvantages of the debt will be
conntervai,ed TO some extent by the uses which
may be made of the Government obligations.
By the hypothecation of bonds or their deposit as
collateral security for loans, increased facilities
for business or other enterprises will be afforded
and the practical effect will be tantamount to an
increase of cash capital, without the ruinous ef
fects of its actual increase.
The Philadelphia Ledger, In commenting upon
the closure of the last series of the seven.Thirty
LOAF, says:
Not the least remarkable thing in the Govern.
ment credit as evnced by these sales OF loans H.
that it seems to have imp. we'd az the amount Of
the Government debt increased. That is, the first
large loan, the 6s OF 1881, was Al per cent inte
rest in gold and for fixed period of twenty
years. This was and il considered the most des.
rable loan made by the Government. In the
second loan the Secretary reserved to himself the
right to limit the loan 10 five years-a privilege
that detracts from its value as compared with the
Is of 1881. Still it was taken up rapidly at par
Following this came the Z so Treasury note loan,
which runs for only three years and the interest
is wholly paya BILE in paper at the rate of 730 per
annum which is about equal to the per cent.
gold.bearing sos with gold at a premium of 81
per cent. To the amount that the gold premium
| is more than 81 per cent are the 20s more valu.
able than the 1905 Yet the 1905 are all taken,
and less the commission of the negotiation, taken
at par. So it will be seen, that the Government
credit steadily improves. Instead OF having TO
offer greater indncement to lenders, tie Govern.
ment, steadily, with each successive offer, lessen
ed the inducemeut by reservng TO itself privileges
| not before claimed. The usual course In finance
s the oftener the borrower Is on the market, and
the larger the amount of the debt created, the
higher will be the rate OF interest charged, to
| cover what is usually considered The increased
risk. The United States Government, In the his.
tory Of lis three thousand millions Of debt, Is an
exception to all rules governing in financial mat.
tiers, and proves that the amount Of the debt has
not yet touched the national credit that the ex.
penditure Of the money does more In the develop.
ment of the national resources to elevate the
standard of public credit than the amount OF the
debt does to depres, II. Some Of the causes Of
the successful negotis ton may be found, frs, In
the great wealth of resources in the United
States; second in the patriotism Of the people to
m ,intain their county whole and perfect at
III - n.. Ill.,. N~G
blending the two powerful incentives Of popu.
larising the loan through the power of the prtss.