The evening telegraph. [volume] (Philadelphia [Pa.]) 1864-1918, 1866-03-27
S1,664 47I,337 SO

Total. 81 664 4IT,337 SO
Deducting the legal-tender notes, temporary
loans, ETC.. (Which must be ultimately funded,
there remain between ten and eleven hundred
millions which tall due within the ensuing two
years, and can be met only by loans or conver-
sion into long bonds. or this amount,
$s30,00O,OOO consists OF seven-tLrty notes con-
vertlble into six per cent bonds ut the pleasure
OF the holders, but only at their pleasure-a cir
cumstance which makes the holders, and not the
Government, masters Of the situation.
If the conversion Of the seven.tbirties was
optional with the Government, instead of
optional with its creditors, the Treasury would
be disem barrassed. As it is the holders have
the Government very much IN their power Ii
the seVen-thlrties were all held by single
person, whatswould be his interest? Would he
keep them for conversion, or keep them for pay
ment? If Tor conversion, and he did actually
exchange them tor long bonds at maturity, the
financial problem would solve itself. The aggre-
gate debt would remain precisely the same; and
rs the seven-thirties fell due, the Government
would be paying six per cent, instead OF the
present high rate, on that portion OF it, In that
case, the holder of the unfunded debt would
have the same interest with the community in
a speedy return to specie payments, which
would give him his interest in the equivalent of
gold, and not, as now, in deprecated paper
But If he thought he could make more money
by pursuing the other course, the other course
would certainly be adopted Supposing the
eight hundred and thirty millions in the hand
of q single holder, and supposing him desirOuS
of ultimately investing in the long bonds OF the
Government, he would not make a direct con-
version if he thought be could get larger
amount OF bonds by compelling the Government
to pay him money for the seven-thirties, and
then investing it in bonds. If Le elected TO
adopt this course, how could the Government
procure the money In no other way than by
the sale OF bonds. But the amount OF money
to be raised would create a dearth In the money
market while the great amount OF bonds
offered Tor sale would depress the value of the
bonds to very low heure. The holder OF the
seven-thirties would profit alike by this state OF
the money market, and by this state OF the bond
market. The money being all raised for btnl,
and coming into his hands to eXpend, he alone
profits, Mt the expense Of the community, by tne
dearness OF money. Intending to invest THIS
money in bonds, be also profits at the expense
of The Government by the depression OF the
bonds. He feathers his nest on both sides. 1t
is Tor the interest OF the Government to avoid
being thus cornered by a combination among
the heavy holders OF the seyen-thirties, which
would give the same unity to Their action a. II
the uniunded debt were owned by single
holder Considerable portions ofitare scattered
among the people; but when they found that
they could make more by demanding payment
| and reinVesting the proceeds, they would not
te slow to &C in concert with the combined
| speculators.
When the debt is once funded II will all be
| paid in gold, or the equivalent Of gold. The
| total unfunded debt is nearly seventeen hun
| dred millions; and ii the currency could be
| kept so inflated that the bonds for that amoun'
|
! per cent, there would be gain, by The pur
| chasers, of more Than four hundred millions o
| dollars-an amount so vast as TO lnfame the
cupdity Of the speculating class to the highes
| pitch.
This is the formidable difficulty against which
| the Secretary of the Treasury is called t
contend; and Congress, misled by the sophistry
or bribed by the money of the spectators
hesitates 10 cothe him with the necessary power
| AS one means of foiling the spectators, tn
Secretary desires authority to make safe anC
cautious contraction OF the currency, and brInl
it 20 specie basis. With the currency at par
bonds would not be purchased at a great depre
citation; the ehiei temptan9n would pe takel
the main feature OF the new loan bill is tn
trammel it puts on the Secretary OF the Trea
sury TO restrain him from contracting the oui
1ency. II nterdic's him from withdrawn
more than ten millions during the first 81
months after the passage OF the bill, an