The evening telegraph. [volume] (Philadelphia [Pa.]) 1864-1918, 1866-05-04
The Proposed New Loan.

ment has been answered by Mr.. Senator Sher
man in bill reported to Congress on Wednesday
from the Finance Committee of the Senate Now
that peace isTfully established, and we have
more money coming in than we can conve.
niently spend, IL is our duty TO remove, as
speedily and as surely as possible, the burdens
imposed upon us by the necessities of war.
The great Seven-thirty loan runs but three years,
and the first series will soon be ready for redemp.
tion. The first series of the Five-twenty loan
(S5l4 0O0, ,000) will be within the control of the
Government May /, 1867, and the Treasury will
have the opportunity of reducing it and issuin e
n five per cent loan About $4O0, ,OOO 900 of our
debt is now in the immediate control of the
Treasury including temporary loans, certi6-
Gates oil Indebtedness, one and TWO year five per
cent notes, and three year interest-bearing legal
tenders. There is of course a provision that
upon the maturing of the Seven-thirty loan the
government may offer the Fiyetwenty in ex-
change. This is matter worthy OF further con-
sideration. The Nve-twenty loan is six per cent.
Understanding, and the question arises must
we continue to pay six per cent. in gold when
money can be for five?
loan running from thirty to forty wears
bearing five per cent, would be better invest.
ment than any given by European countries.
The holder would surrender one per cent. to
avoid taxation, and the Government could apply
this one per cent. to the creating of a sinking
fund and the ultimate discharge of the national
debt. No financial statesmanship is sound that
uOtS hui TeCOgulLe tue necessity OF paying That
debt sooner or later, and we trust Mr. Shermans
Dill is good in this essential The gain of the
one per cent. would not be a loss to the Trea-
sury. Amounting to l6S per cent. of the aggre-
gate interest. 1t would be three times as large as
the five per cent income tax collected from the
holders OF Government loans, and would be yir-
tually collecting tax from the immense num-
Der of the poorer classes whose incomes, being
less than 5000 per annum, escape the operation
OF the tax law. Foreign holders of bonds also
would thus pay tax, from which they are now
exempt.
These are practical considerations. and we
trust they will be duly considered by Congress.
The saving OF this one per cent. is greater than
the revenue accruing rom any national tax
Whlle II gives the loan the generous and popular
feature OF being absolutely free from taxation,
The holder sees that his investment is certain
lntact, not subject to the whims or oppression
OF any future Congress-such Congress for
instance, as we might have with reconstructed
South eager to Tepudiate the national debt or
compel the payment of their own by threaten.
ing reputation. This redu ction of the interest
rate would give more healthy tone to business
and finance. The present war rates iniure the
country affecting, particularly, manufacturing
commercial, and producing interests, compel
ling 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 on the national loan
would be OF great advantage to the country and
DC surestep towards resuming specie payments
There is stlll another financial consideration
in this proposition. Let us suppose that the
Government, by some wise and energetic method
(Jay Cookies, for instance) succeeds in nepo.
tating So, 900, ,000, 900 of the Eve per cent loan
or, rather, in replacing Five-twenties and Seven.
thirties to that amount. The saving of interest
alone would be 500, 0O0, 900 per annum, and this
saving invested mi-annuelly and compounded,
would pay off the whole national debt in 365
years. 10 make 1t more plain, we will suppose
tnat the dlherence between five per cent and six
per cent. be set apart semi-annually as a sinking
fund, bearing compound interest," for 20 years
and 40 years:-
Principal in 20 years. s.............,,, S4OO 100000
Compound interest in 20 years ...,... 2S4 T9S 956
n lota. "..........u...,..."....... 1854 793 956
Comna~nd nterost ,n Al $500 OoO 600
In S65 years, compound interest and ~-0-- ono moo
principal amounting to-. ..,...., 90 O50 557203
The mere fact of this one per cent. being SET
apart as a sinking fund would give great conf
dence to the foreign and domestic holders by
showing that fair. honest, straightforward
plan had been adopted to meet the national
debt. There might probably be some i'll feeling
towards the five per cent loan and we NAV be
told that II the Tentorty five per cent. loan is
pernltteq 70 sell at 943 and 95, there would be
no encouragement in asking people to accept an
IN Investment that would probably fall below par.
Tue hcniorty loan, one of the best invest. |
ments mEents IN existence, is only below. par because
M " M eu 'ieS anu rhe-tWentleS are so ABUNDANT.
There was time when the first series of the |
FlVe-twenties was as low as 81. 1t was a period |
OF great depression, when we were being de. |
feated, and gold was quivering, and they re- |
NAMED down for months. Not long since the |
SeVen,thlrty loan was as low as 96 and now IL |
is quoted at l0l4, and has been steadily rising
until 1t has almost reached the Pive.twenty, Let
us nave the new five per cent. loan running for |
thlrty or iorty years, and we have no doubt that
u VIII soon be at q premium, and continue to |
be the most acceptable investment in existence. |
Present Asnect of the Ca,man Onos,.