The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1868-08-02
The National Debt and the Funding Bill

AAO IopuUlICduS Hrc 6QQeaVOrlng TO
make good deal of political capital out Of
the Funding bill They claim it as their mea-
sure. Thad Stevens endorses it and boasts
that nearly every republican in Congress voted
for 1t. Mr.. Sherman, who reported and en-
gineered the bill through, regards his offspring
with great pride and affection One would
suppose from all this that it is the perfection
of financial legislation. Still it is not received
with favor by either the capitalists at home or
the bondholders abroad. Neither the news
papers here which assume to speak for the
moneyed and commercial interests nor the press
OF Europe look upon it as a wise or practical
measure. This, it must be remembered, how
ever, is the bondholders' view of the matter.
They will not be satisfied with less than six
per cent interest in gold and payment of the
bonds in gold. Yet as business men they are
right, probably, as to the impracticable charac-
ter of the bill. 1t hardly seems reasonable
that any considerable number of bondholders
will voluntarily change their six per cent bonds
for four per cent ones, although they may get
long forty year bonds for their FIVE twenties
and gold payments be guaranteed. If they
should not the Funding bill will become practi-
cally dead letter.
Strange to say, too, most of these advocates
of Mr.. Sherman's bill are clamorous for imme-
date specie payments. If they believe we
should return Immediately or within short
time to specie basis, and think that we shall
do so, how is 1t possible to fund the debt by
nj ntar
bondhOlder who is drawing six per cent in
terest in gold, and believes that within few
years at furthest specie payments will be
resumed, and as consequence that his bonds
will be paid in gold, is not likely to change
them for four per cent interest securities The
difference Of time the bonds may have to run
will not make so much difference in value in
this country, where the interest of money is
always high, and where there is such a large
field for profitable investment The only In
ducement to fund the six per cent debt in four
per cents will be in the belief that specie pay
ments cannot be resumed for a long time TO
come, and that the fve-twenties may in the
meantime be paid in legal tenders. Any one
believing this might voluntarily give up his
six per cent interest bonds for the four per
cent ones, as the latter are to be paid in gold
at the end Of forty years. but those believing
In an early resumption would certainly not.
These on-to-specie-payment theorists, there
fore, are either utterly ignorant of the nature
and practicability of this Funding bill or are
playing the game of demagogues for political
effect.
The reduction Of the interest from six to four
value as between currency and gold to-day.
The fve-twenties are worth about q hundred
and eight in currency, interest off, while in
gold hey are worth in this and other markets
from seventy two to seventy-six. The inter
est reduced one-third reduces the value one
third, and that.rings the bonds to just about
the present marA,t value In gold. Thad
Stevens may well be p~ased with the Funding
bill, for itanswers the same purpose of paying the
debt in greenbacks, and, sshe SAYS, it puts
that question at rest. Mr.. Penleton could
desire nothing more. Yet these radicl repub-
licans in Congress, who almost unanm,uslv
voted for the bill, have the hardihood to pra-,
about the national honor and hurrying TO
specie payments, and to abuse those who pro-
pose to pay the fve-twenties in greenbacks az
repudiators What Is the difference between
reducing the interest third and paying the
debt in greenbacks at the present rate of gold ?
! II amounts to the same thing. We are only
condemning the inconsistency and chicanery,
or the stupdty-we do not know whicn-oi
! these politicians and would-be financiers II
would be good thing If the interest Of the
debt could be reduced and portion of the
burden removed from the industrious classes,
and better still II the debt could be put
through rapid process of liquidation. We
are for any funding bill or any financial inca
, sure that will bring about such desirable
} result; but there aust be more praotica