The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1868-02-19
OUR NATIONAL DEBT.

~~>~~~
A Plan for Its Adjusissnt-Letter from Silas
M. STRAIGHTFORWARD and Interesting Decu-
ment-A Three sixty. five Bond Recomme nd.
ed-The Advantages Of this Bond-Its valus
In Domestic Commerce-EHect Upon Specie
Payments.
[From the Detroit Post, Feb. ~
We give below o letter sent by some Of our lead
ing fnanciers and business men 10 Silas NJ Still
well, Esq, OF New York, asking statement Of
his views upon the best means Of adjusting our
national debt, and with it the reply OF Mr.. Still.
well. The latter document will be read with great
interest. II is well deserving OF attention on &C.
count Of the financial reputation of its author.
DETROIT. Jan. Is, 1868.
SILAs N. SrnwELL, Esq, New York;
DEAR SR-Gratefuly approaching the great
service you have rendered the country, in the able
and philosophical examination and discussion Of
questions relating to the national finances, and
deeply impressed with the grave importanceiof q
wise and statesmanlke policy in the arrangement
OF the public finances and credit, the undersigned
respectfully yet earnestly request your opinion,
for publication, as to how the pubic debt should
be adjusted or funded Your high standing as q
sage and accomplished writer the years of study
you have given the subject of finance, the careful
research you bestow upon every economic ques-
ton, and the practical ability with which you an.
ayze and examine the great question Of finance
in all its bearings, eminently qualify you for the
task, and these conditions will entite your
opinion to the highest respect, and commend your
views to the thoughtful and favorable considera-
ton Of the public. 1t is unnecessary to remind
you Of the paralyZed condition Of trade of our
suspended industries, the excessive rate of inter.
est, the large increase of unemployed labor, and
burdensome and exhaustive taxation, both local
and national. The depressed condition of our
country gives anxiety. if not alarm, to every
thoughtful patriot and the situation demands early
and wise legislation affecting taxation, and the ad
justment of tile public finances aud revenue on
plan at once permanent and in accord with the
settled principles of economic laws. If such o
plan be adopted it will give confidence and stabil.
ty to all industrial and business interests, sat.
isfy intelligent men, quiet discussion and insure
prosperity to our beloved country.
With great respect, very truly yours,
H. II. Grape, E. B. Ward, H. P. Baldwin, Z. O.
Grosvenor, M. l. Mills, Henry J. Buckley, N. w.
Br ooks, Moses w. Field, D. M. Richardson, Dun
can Stewart, P. Henkel. John j. Bagley, E. Trow.
bridge, j. g. Newberry, j. s. Farrand, r. \. Gil
lett Acting President Of the Board Of Trade;
Morgan johnson, F. Lambie, E. NJ. Clark, j. D.
Hayes.
Views OF Mr.. StiIweIi.
GENTLEMEN-Your kind and earnest letter has
been received by me. aud thank you for the con.
hdance you express in the accuracy OF my facts
and opinions on the subject OF our national
finances Your position and intelligence prove to
ME that you understand the wants and wishes of
the people, and that you desire such changes only
in the Laws OF the country as your knowledge,
added to great experience1 assure you have be-
come necessary.
THE DsBr AND ITS INTEREST.
The amount of our public debt is not appalling.
1t is the burden of extraordinary interest that Gre
ates uneaslness among the people, and this un-
easiness, il not appeascd by wise legislation, may
lead to complications in political circles, until
some demagogues may propose to dshonor our
country. Ii we can solve the problem or cut the
gordan knot, so that we shall be able to fund our
debt in bond that will relieve the country from
oppressive burden of interest or usance, and
by the same act benefit our industrial interests,
we shall surely meet the wishes OF the people.
NEW BOND RECOMMENDED.
To effect this object you should ask Congress to
authorize and direct bond to be made, which
shall bear an interest of $s65 (wnich will be one
cent per day on each 800, and become due thirty
years from date. This bond should be exempted
from taxation, and declared by law illegal ten
der'' tor the principal OF the bond. bond contain
ing these evidences oil perfect credit will be worth
more than six per cent bond, secured by mort
gage on real estate-because exemption from taxa
ton is worth two per cent and the legal tender
clause that will make the bonds money will be
worth more than one per cent; hence these bonds
will be equal In value to the best SIX per cent sc.
curities. The interest and considerations for this
loan are greater than any nation in Europe is now
paying. But this is not the case with our govern
ment loans. Our government is now paying more
than ten per cent per annum upon the largest por-
ton OF its debt. IL pays six per cent per annum
in gold, which is more than Gig t per cent i'm cur
rency, and exempts its bonds from taxation, which
is worth more than two per cent per annum. This
charge upon the bonds 0f government is SO enor-
nous that the people will not allow il to continue
much longer. Bends made by our government are
the safest security in the world, aud therefore il
properly formed and issued should aud will COM
mand market ut very low rate Of interest.
ITS EFFECT IN RELIEVING THE MONEY MARKET.
Our bonded debt not only bears large interest
that makes it burden, but IL absorbs all the sur
plus money OF our great capitalists, and actually
crowds out Of the market all other securities, or
causes holders to make large Sacrifices of money
to induce capitalists to sell their ten per cent
bonds and purchase other securities. Farmers
manufacturers anu builders find all efforts 10
borrow on real estate security Ruthless. Hence
these great interests are greatly injured by our
ill-adjusted debt. The laws Of many States will
not permit a loan to be made on the security of
real estate al rate Of interest exceeding six per
cent per aDnum. But If the laws did not prohibit
the ioaner TO take more than six per cent would
not the credit Of any mercantile firm suffer Sc.
verely II they should make permanent loan at
ten per cent per annum INTEREST,"
The plan herein proposed, when adopted, will
remove this obstruction TO business, and capital
lists will again invest in bonds secured by mott
gage on real estate. II no other advantage, snail
flow from the adoption Of our proposed bond, the
relief to those great interests 10 which we have
referred will be felt every section of our country,
and fully Justify the adoption of this plan for fund
ing the public debt.
But this is small part Of the benefits that will
flow from this measure. These legal tender bonds
will largely into the business Of the country
where money is quite as much needed real
l estate. They will be money, and better money
than greenbacks or bank notes, because they will
bear an interest. The rate of interest we have
proposed will ht them for trade while il will not
be large enough to cause them TO he boarded by
capitalists. II will give them more value in the
hands of merchants than bank credits that pay no
| interest. II will induce traders to employ more
capital in their business, because II they invest
their surplus funds in these bonds they will receive
| interest, while they have them ready to use "a
money nj all times. These bonds will occupy the
| great middle ground between the greenback that