The Indianapolis daily herald., 1865-11-16
Conversion OF the state Funds into
the two and n half per cent. ssOnds.

| The practice Of the State has been 90 loan
out her funds To citizens Of the State for rea-
sonable times, at from six 10 eight per cent in
terest. somewhat les. perhaps. than money can.
on an average be obtained for from the banks.
Those funds thus constituted an active capital.
| Much OF those funds l. still in the hands Of
citizens Of the State. we suppose. though we
have not posted ourselves definitely n to the
facts ON this point. II we understand the
Governor. he Is in favor Of collecting In this
money from our people and vcsiing it in the
two and half per cent. bonds. thereby con-
verting il into dead capital. Now. whatever
amount Of the two and half per cent bonds i
IN the.hands Of eastern capitalists. constitutes
SO much active capital for Our people al two
and half per cent. They have given us
money. active capital. and taken our bonds
dead capital. If then we collect in from our
people this active capital. convert il into bonds.
we 10y that operation. convert 50 much active
capital into dead. We now have money which
We have borrowed at two and a half per cent.
and We propose 10 voluntarily CONVEX, it. be-
fore due. into dead capital and pay six per
cent on il.
The operation proposed. aud the effect Of il.
may be thus stated. The State borrow, say
three millions Of dollars. in New York. at two
and hale per cent. interest. and loans IL out
al six per cent. a fair rate to our citizens. our
citizens pay the interest at the end Of the
year. amounting q one hundred and eiglty
thousand dollars. The state then takes ont
II this sum the amount he has - pay on the
bonds Al two and half per cent. 20 the hold
ers thereof. being SereRty-fre thousand dol
lars pays il over. and has len the snu- little
sum Of one hundred and .hre thousand d9l-
lars Now. the proposition Of Governor Nor
TOY i. n We understand il. To voluntarily
raise The bonds 10 siN per cent, 50 3 to make
a friendly gin cf thr one hundred and five
thousand dollars per annum 10 the hondhold-
err. instead Of using II for state purposes.
Turn it any way YOU may. the proposition
comes tothis: The state proposes 70 vote a gra-
tuity. in the shape II interest. which the con-
tract doe not require # Us. % the hondholdcr,
cur people arr heavily in debt on draft
mortgages. etc. anil times arr already hccom-
ine harder; our people viii begin. before long.
more or les q N IN. 10 20 L. the wall in their
pecuniary Affairs. taxes will begin 10 harrA,s
them: evil days for Us. we fear. viii come and
il seems bad time o. withdraw active cap.-
tai from the people 70 raise interest 70 make
siil, % he paid with taxes. Perhaps we do
not understand the subject. We should BE-
glad 70 be informed on il. n we 30 under
stand Il rightly. We approhend il i worth
thinking about. We would likcto ~ Informed
by what law of finance thing we are very
Ignorant about raising infere>; from two and
hall 10 dx pr cent. viii no; increase the
taxes.
In what We have said ia this article. We -
upon the hypothesis that the Governor is right
in holding that the debt l. not due. II he j.
w ny in tais. and the debt really De- due q;
The end Il twenty YEAR, then. terrible a. We
believe the impending pecuniaTy calausitlcs 10
BE- we are for maintaining the faith q the
state.