The Evansville journal. [volume] (Evansville, Ind.) 1866-1870, 1868-08-06
The FnndIng RIII.

President johnson, like the Coar-
ier, does not approve the Funding
Bill which passed the last Congress,
and, therefore, quietly pockets it.
That bill we have already explained,
was designed to secure the conversion
of the present Government debt into
bonds bearing four and four and a
half per cent. interest. The present
bonds bear six per cent, and some
even more. If the change could be
effected with satisfaction to those
holding the bonds, the country would
save annually in interest alone from
one and a half to two per cent. on its
indebtedness, and consequently have
several million dollars additional
every year to apply towards extin-
gushing the principal, without any
increase of taxation. This looks like
a reasonable proposition, 10 plain
common sense men. But the Courier
don't like it. 1t prefers the funding
process adopted by our Democratic
City Council.
Our city had a floating debt of near
$1,000 OO. Much Of this debt was
nominally drawing six per cent. in
terest. We say nominaly, because
the city orders do not average over
three per cent. The orders draw no
interest whatever unless they have
been presented to the City Treasurer
and been protested or endorsed. The
experience of the past nine years
shows that at least half the orders
issued are returned and cancelled
without being endorsed, and conse
quently do not draw any interest.
Hence, the actual interest paid by the
CRY on its orders during the past
eight or nine years has not averaged
oyer three per cent. Thus the city
was getting the use of money cheap.
But our Democratic Council, whose
organ is so hostile to funding a
six per cent. debt into a four and a
four and a half per cent. bond, deems
il the acme Of financial wisdom to
fund a three per cent. bearing debt,
into ten per cent. bonds payable semi
annually, which is very nearly equiva-
lent to an eleven per cent. bond.
Hence, we conclude the Comier's OBJ
lection to the Congressional mode lies
in the fact hat it reduces instead of
increases the rate of interest. On no
other principle can we account for It's
opposition to the funding bill of Con-
gress, and advocacy Of the funding
bill Of our economical Council.
A good Democratic friend suggests
to US that we overlook the true reason
for the action Of the Council, which,
he says, is to this effect: They now
propose to fund the city orders in ten
per cent. bonds. and when the bonds
become due pay them again in city
orders. In this way a kind of inan
cial'perpetual motion would be set in
operation, whereby the city would get
everything done necessary Tor its com
fort, and still pay out no money. We
confess there may he something in
this. 1t is Mr.. PENDLEToN's plan
for paying off the national indebted
ness. and why would it not apply
equally well in municipal transac.
tions? Will the Courier enlighten us
on this point? If the plan can be
made to work successfully, we viii
approve it. Would it not be we'll tC
try it on a small scale-say for a cor.
poration ike ours - before expert
mentipg with the machine on so large
a scale as that of the nation?
To the poor people, who had nc
notification Of the financial maneuyers
of u municipal Solomons, and con
s~equently disposed oftheir orders at q
discount Of ten, fifteen and twenty pei
cent, We tender our sympathy. Theil
loss Is the gain of some gentlemen il
the city who were on mere intimate
terms with the Mayor. The money i
still in the-eity, and it is some conso
lation TO know that. VIII these de
frauded laborers eonfine their male
dictioDs to the National b~ondholders
like BELMONT, and overlook the cit.
b~ondholders altogether? That woul,
be inconsistent.