New Orleans daily crescent. [volume] ([New Orleans, La.]) 1851-1866, 1866-06-02
FINANCES.

Senator shermans bill to consolidate the govern
ment securities at uniform interest Of five per
mt. per annum, seems to meet with much favor.
The process is not to be compulsory. OF course
such a scheme would strike blow at public
credit which, in its evil effects would more than
counterbaance any benefit to be derived from the
reduction Of interest. 1t is suggested that the pro-
cess Of conversion will however, be easy enough;
that the pride Of the people and the general desire
to add the reputation of the country by an early
discharge of the public debt, will induce the
holders Of the six per cents to assist in consum-
mating the change. These may be very powerful
motives but it may well be doubted that they
will prove efieacious for such purpose People
are not very apt to surrender, voluntarily sixteer
per cent. of their revenues. Moreover FIVE pc
cent is lower than the ordinary rate of Interest,"
this eountry-that is to say, the profits of capt.
employed in trading pursuits average more tn;
five, even more than six per cent. per annul
All other things being equal therefore, the five n
cent. obligations Of the government would neces-
sarily depreciate in nominal value, to an extent
sufficient to place capital invested in them on an
equality with capital invested in other ways. This
depreciation might be partially obviated by the
greater confidence felt in the government, and the
consequent enhancement Of its credit But the de-
probation to whatever extenttmay go, might facil-
tate the operation Of extingushing the debt if the
government adopt Secretary McCuough's policy
of applying large portion of the annual revenue
to that purpose. This in turn, would react on the
price Of securities, and might even bring them up
to par value in the market. It is impossible,
however, TO estimate with any degree of accuracy,
the influences of such causes. Prices of all kinds
are affected by 50 many intervening agencies,
and these sometimes so reconcile and delicate that
predictions in regard to them are more likely to
fail than to be verified.
Itappears now that the public debt will amount
to $500 100000. Of which 81 900 600 900 consist
Of interest bearing securities and about $500 00O
coo of non-interest bearing currency or treasury
notes. Mr.. Sherman's bill will it is stated, assure
the sum Of s30,OoO,OO0 to be applied to purposes
Of reduction of the consolidated debt, But this
presupposes that the conversion Of all the stocks
into five per cents. can be Immediately effected.
Should this supposition be fasifed the government
will have to wait five or seven years to obtain CON
troll Of 81 600 900 out of the 1000 100000 ofin
.terest bearing debt.
Secretary Mccullough proposes to apply $780,
O0Q,0oOper annum, out of budget of $3.50 600 900;
first to the interest and then to the reduction of
the principal Of the debt. By funding the treas
ury notes, even at 50 low a rate as five per cent.
per annum, s25 600 900 would have to be added to
the annual taxation Of the country by way of in
terest. Now, if this SIS 600 900 were applied to
the absorption of the treasury notes, in twenty
years the entire amount of paper circulation
would be extinguished, and 500, 0Oo,O 900, which
could go to the reduction of the debt would be
saved to the country The process could be
vastly accelerated by applying the $50 600 600 per
annum, accruing under Senator sherman's bill to
the same purpose SO that, in all probability within
two or three years the paper currency would ap
proxmate in value to gold standard without any
serious orsudden disturbance of the equilibrium of
values. This, besides being more economical
plan, would be surer in its effects than the system
Of funding the treasury notes, by which they be-
come greater burthen to the country than in
their present form as currency