The evening telegraph. [volume] (Philadelphia [Pa.]) 1864-1918, 1866-07-20
The Plan to Fund Our National Debt.

SoME months since, Hon. JOHN SHERMAN
moved, in the Senate, a plan of fund
ing the national deo', at the request Of
the Secretary OF the Treasury. It would pro-
badly have been adopted at that time bu5 tor
the unexpected opposition OF Senator FEssBN.
DEN and others, and now, after slumbering for
weeks, it again has come before that body. The
original idea was 10 call in all certificates of
United States Indebtedness and other maturing
bonds as soon as they fall due, and issue In their
place bonds to be known as the consolidated
debt, which we're TO run ior not more than thirty
years, at an annual interest of FIVE per
cent. The money savel by decrease of
the interest from seven and three.tenths
and six per cent. to five per cent,
was to be applied to the payment of the
principal OF the debt. BY this means a system
of compound interest would be inaugurated,
and the SAVING of the rate per cent. made gradu.
ally to pay the entire debt. The ''consols," now
forever exempt from local taxation, were to be
also relieved from all taxation from whatever
source. When 'he bill was in this form we
favored it, after a careful examination into its
workings. The plan peculiarly recommends
itself in many ways. 1t gives to all our people
a permanent and perfectly secure means OF
investing their moneys. 1t has worked adm-
rably in Great Bri ain so admirably that although
it ls known that the principal OF English con-
soils will never be pai6, yet the security of the
investment keeps the bonds III demand, both at
home and abroad. How much more popular
will It be with us, where payment is certain
It would make the debt pay itself during the life
of the present generation, thirty-sx years and
o half. 1t would be uniform, and by the system
of exemption would be rendered deservedly
popular, as the pc pile dislike 70 break their
income in order 10 pay tax, preierring lower
rate and certain interest. In fact all its
proyis ons combine to secure for it an un-
e1ualled popularity.
We had feared that they had been strangIed
in committee, and it is therefore with gratiied
surprise that we see it once more resuscitaTcd.
As we had occasion to remark, this is a
golden opportunity to reduce to regular form
all the varied United States notes, and provide
fol their payment as they commence to mature
early next year. II Congress should neglect to
thus provide, it will let a VI al moment pass and
adjourn with its duty uuperiormed.
When Senator SHERMAN rentroduced his
bill, he moved to 1t number of highly i'm
portant amendments, iLstgaCed, we suppose,
by a desire to harmonIze the opposition to
which the bill in its first form was subjected.
Several OF these amendments entirely change
the features of the plan. Let us glance at them
in detail The hrst amendment was to strike
out the provision for "the payment of the prin-
cipal, by approprlattng the amount OF interest
saved by substitution OF i've per centum bonds
for other Government securities to the payment
OF the principal Of the national debt; and that
for the purpose OF insuring the payment thereof,
the sum of at least thirty millions of dollars,
including the saving of interest Aforesaid,
out of any moneys in the Treasury not other
wise appropriated, shall be annually applied to
the reduction or extinguishment of said debt"
In place of this provision substitute was
adopted appropriating one hundred and eighty
millions per annum out OF the Treasury for the
payment OF interest, and whatever is in excess
will be applied 10 reducing the principal. The
difference between the two plans is evident. In
The hret, thirty millions were given every year,
and the interest was also paid. At the present
time the combination of the two would come to
less than SlsO,OOO,OO but as the debt de-
Creases, the rate OF liquidation will still con-
tinue the same. By the new provision the
rapidity OF dIminution will increase every year.
Thus, suppose that during the frst five years the
interest should amount TO one hundred aud fifty
millions. There would be thirty millions left
out OF the one hundred and eiehty to decrease
the debt But after the five years, and each
successive year, the interest would prove less
and the liquidation be greater Hence it will
cost the Government no more, yet it will keep
decreasing more and more rapidly at each sue
ceeding year. The one plan made The rapidty ever
increase by the accumulation OF compound in.
terest: the latter gives us both the advantage OF
the compound interest and also of the ever con-
tinuA diminution of the principal itself These
two motive powers are put to work to reduce the
bulk OF Our burden.
The next amendment is an additional section
providing that all import duies (Which are all
paid in gold) shall be set aside for-First, the
pay ment OF so much of the interest of the public
debt as is payable in coin. Second, the payment,
as 1t shall mature OF the principal OF toe public
debt Third, the payment OF such appropriations
by Congress as are required to be paid in coin.
Fourth, when the amount OF coin in the Trel.
sury shall exceed fifty millions, the excess shall
he sold in open market, In New York, under
regulations prescribed by he Secretary of the
Treasury, for United States lotes, and the notes
received for 1t shall be cancelled.
The first three provisions are implied by
necessity; the last seems to us admirable.
II aayors of contracting the currency, pro.
vision essential 10 the success Of the bill.
An amendment, reducing the length of time
which holders Of notes have TO give AOtiOe