Indiana American. [volume] (Brookville, Ind.) 1865-1872, 1867-10-25
The Principal of the Public Debt.

From the New York World, October z.
We have heretofore directed our argu.
ments rather against General Butler THAI
Mr.. Pendleton ,alluding but slightly to the
latter because we regretted 10 ind him in
such company But as Mr. Pendieton bas,
in public speech, replied to Que of the
arguments we used. We do not see how We
can very well stand our ground if we con: ::
tinue our forbearance. In recent speech
Mr. Pendeton said
but an able, active and influential
newspaper. whose exertions in behalf Of
aud whose influence in the Democratic
party are very great, whose editor always
writes rs a gentleman aud reasons as a
statesman-l mean the World admitted
that was right, as far as had gone, but
asserted that had overlooked an import.
ant section Of the act of February %
1862. That section provides tina, the du
ties shall be paid in coin. and that the
coin shall be applied as follows:
"First--To the payment In coin OF the
interest on the bonds OF the United Stetes
"Second-.To the purchase or payment
Of one per centum OF the eptire debt of
the United States, TO be MADE withih each
fiscal year after the 6rst day of uly, 1862,
which is to be set apart as a sinking fund.
and tho interest of which shall be in like
manner applied TO the purchase or pay
ment of the PUBLIC debt, as the Secretary
OF the Treasury shall from time to tine
direct
"Third-The residue thereof shall be
paid into the Treasury Of the United
States.
"Thc World claims that this language
in the second clause constitutes promise
to pay the principle in coin. | differ with
the World Mark the language; 10 the
purchase or payment Of one per cent. Of
tho entire debt The purchase or pay.
.ment was to commence during the year
between July /. 1852, and July /, 1868
This law is the first one authorizing the
issue Of fye.twenties. They were not re-
deemable by tho Government before FIVE
years. Not Que Of them, therefore, could
be redeemed until after the 25ih of Feb
ruary, 1867. The compound Interest
notes and the seven thirlies were not yel
due, indeed, had not yet been issued to
any extent. None of the public debt be
came due il that year nor the next, aud
therefore could not be redeemed. BY the
terms of tho law, then, the amount OF one
per centum must PC purchased. During
the first year gold went steadily upward
reaching believe, nearly 300 per cent
premium In few months the bunds
were prepared You remembcr that Jay
Cooke Was employed TO sell them; that he
made extraordinary efforts to do 50, aud
that ho was well paid by tho Government
for getting them of Mt eighty cents Ia
greenbacks. Now, then, IL the interpretn
iion of the law put upon it by the World
is correct, the extraordinary spectacle was
presented that the Government was, by
law, paying its agents to sell it, bouds al
eighty cents in groenbacks on the dollar.
aud by the same law was compelled 10 bay
them back, ut the same time, at par IL
gold, which was then worth two hundred
cents in greenbacks. Ii seems to me thai
| need only state this result TO show thai
the Interpretation is wrong. The coiu
was TO be laid aside, aud when the time
for purchase or redemption came. il was
TO bo converted into legal tender notes ano
then the purchase to be made at the mar
ket rates.
We find nothing in this reasoning To
complain of either IN point OF courtesy or
representative candor. The distinction
between purchase" and "paymcut" on
which Mr.. Pendloton rtlios Is not new To
US, us we recently made use of tho same
distinction 10 explode 'one of the most
plausible Of General Buffers arguments
But MIR. Pendletoh does not keep the dis
tinction clear in his own mind throughout,
aud thereby coniuses aud invalidates hir
reasoning. The idea that in purchasing
the public debt the Government war
bound in good faith to pay dollar Tor dol
lar, could never be entertained by any
body conversaot with this class of subjects
Secretary Cobb, in Mr.. Buchanan's ad.
miustration, purchased portion Of the
public debt ut very high premium. Had
the bonds been selling In the market be
low par, he might with equal proprieiy
have bought them In ut discount. Gold
was ut that time tho only currency used
in the transactions Of tho Government &
but the varying prices which the Govern
ment might have paid ia tho purchase oi
its bonds, in no way affected the sum due
at their payment. Attheir maturity, dol.