New-York tribune., 1866-05-03
THE PROPOSED NEW LOAN.

The necessity of a plan for the absorption of the
rapidly maturing war loans Of the Government has
been answered By Mr.. Senator Sherman in bill
reported to Congress yesterday from the Finance
Committee Of the Senate. Now that peace is fully
established, and we have more money coming in than
we can conveniently spend, it is our duty to remove,
as speedily and surely possible the burdens i'm
posed upon us by the necessities Of The great
Seven.Thrty loan but three years. and the first
series will soon be ready for redemption. The first
series Of the FiveTwenty loan (S5l4 600 000) will
be within the control of The Government May l. 1867,
and the Treasury will have the opportunity Of reduc-
ing it and issuing iveper cent loan. About $780,
OO0 600 of our debt is ROW in the immediate control
Of the Treasury-including temporary loanS, certf-
Gates of Indebtedness and twoyear five per cent
notes and three-year intcrest.bearing legal tenders
There is OF course, provision that upon the matur-
ing of the Seven-Thirty loan, the Government may
offer the Fve-Twenty in exchange This is a matter
worthy of further consideration. The Five-Twenty
loan six per cent interest bearing, and the question
arises must we continue to pay six per cent in gold
when money can be had for FIVE
loan running from 80 to 40 years, bearing five per
cent would be a better investment than any given by
European countries. Tho holder would surrender
per cent to avoid taxation, and the Government could
apply this one per cent to the creating of sinking
fund and the ultimate discharge of the National debt.
No financial craftsmanship is sound that does not
recognize the necessity Of paying that debt sooner or
later and We trust Mr. Shermans bill is good in this
essential. The gain Of the one per cent would not
be a loss to the Treasury. Amounting to 10 3-S per
cent of the aggregate interest it would be three times
as large as the five per cent income tax collected from
the holders Of Government loans, and would be vrtu-
ally collecting tax from the immense number of
the poorer classes whose incomes being less than 5000
per annum escape the operation OF the tax law.
Foreign holoers of bonds also, would thus pay tax
from which they Tow exempt. .t
These are practical considerations, aud we trust
they will lie duly considered by Congress. The
saving Of this per cent is greater than the
accruing from any National tax while it gives the
loan the generous aud popular feature of being
absolutely ir,e from taxation. The holder sees that
hi Investment is certain intact, not subject TO the
whms oppression of any future Congress-such a
Congress, for instance, as We might have with
reconstructed South eager to rcpudatc the National
debt. or compel the payment of their own by
threatening repudiation. This reduction of the
interest-rate would give more healthy tone to
business ard finance. The present war rates injure
the counry--afectng, particularly, manufacturing,
commercial and producing interests, compelling
business men to pay higher rates for money than
the ordinary laws of trade require, and thus giving
advantage to those foreign holders whose capital is
abundant and cheap and whose manufactures are
accordingly lessened in cost. The reduction of
interest the National loan would be of great
advantage to the country, and be sure step toward
resumng specie payments.
There is still another financial consideration in this
proposition. Let Us )pOse that the Government by
some wise and energt method (Jay Cookies, for in
sance) succeeds in ne iang -, 600 600 coo of the
five per cent loan or ra II in replacngFVe-Iwenlles
and Seven -Thrties to Tat amount. The saving OF
interest alone would be $50 0OO00 900 per annum, and
this saving invested - niannually and compounded
would nav off the whole National debt in 36d years
To make it more plan will suppose that the differ
ence between five per cent and six per cent be seapat
semannually as sinking fund bearing compound
interest. for 20 years and 40 years: |
PRINCIPAL in 20 years .........-...-..'- fnVWmOVV
COMPOUND interest IN 20 years 2sf'9395o
Total. so''i 'S'Jo
Principal in 40 years rs................. $oOIOOOOVV
Compound interest in 40 years. lfl29i3,io5
Total. III
In 36i wears compound interest and princi-
pal amounting to. $2OoVo ooi 2oo
Tie mere fact Of tbs qer ceEtbeiug set appt as