The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1869-11-13
OUR NATIONAL DEF.
An EnSlisr, Review Of tie FinnEcinl and Tari
tsystcns OF THO United states.
L rl4,n. at

An English Review of the Financial and Tariff
ssysicnns Of tic United States.
from the London Economist oct. So
THE PROSPECTS or REFuNDiSG TnE AMERICAN DEBT
AT A LOWER RATE OF INTEREST.
Mr.. Boutwell, the secretary OF the American Treas
ury. laeiy made sqesch 1T Phadep PIMA, very IN.
portant on various grounds but malaly we think,
Tor the announce lenG tlat the American debt will
probably be refunded 1he Secretary's view IS that
tho poicy OF General Grants Observation-Disclosures
ton OF the debt. anu the extinction OF the doubts OF
repudlaton-have so raised American credit as 10
make II unnecessary TO pay the present hsn raie OF
interest. i'he exact words OF his announcement
arc:-"We are now paving on q large part OF this
debt six per cent interest The events Of the last
SIX seven months demonstrating tho ability
aud disposition OF Gne people OF this country 10 pay
this debt have rendered 1t not only probable but
consider IL certain unless there shall be some dts
turbance OF the peace OF the world-uness there
sha pe some calamity national In Its character-l
consider IT certain that we can completely refund 30
much Of the debt we desire TO refund ut rate OF
interest not exceeding Jour and u naif per cent
thus saving to the country and to the people who
pay the taxes from S,OcJ 0JD TO S250lOov0 year"
Is 1t likely that these expectations will be confirmed
by the event The magnitude OF tue proposed
operation Is very striking. According to the last
statement issued, for the 3oth OF September which
we abridge below the capital or the DEBT not deduct
ing tno oaances IN .he wa oa tna o aaae
est the larger portion OF this debt bearing interest,"
VIZ: S@,l7l,ojoovo. or Eio9 30o9Sl, be.ag apout
$1-5.0oo0 o0 or G2G,0oo,ooo MIR. Boutwell,, IN ict
proposes 10 save IRON seventh 10 nearly lfth OF
lnis interest, or IRON G3, 10000 to G5,2oo.oJ0
per annum, which would he saving with
out precedent In the history OF funding. By
tine various operations on our own larger debt
between lo22 and 1Sii we saved altogether rather
than ESQ., .0io per annum, the greatest reauc-
ton at one time beng 81, i9l,0oo and Tie American
operation VIII clearly be mucn bigger one If 1t can
oe successfully accomplished In regard 70 the CAPT
tai operated on the contrast Is not 80 great. Mr.
boutwell,, taking the whole expressions OF has speech
together, has plainly IN his mind tile SIX per cent
deDt-nainy the Aye-twen les winch, as Will be no.
t!ced Iron the sutjoned statement. wiz soon be
mostly redecnable. The capital OF this SIX per cent
debt Is SlSd6,ooJ,o0o. or fJs7,oO0,000; but as MI.
Boutwell, talks OF reducing the interest on the debt
fA m fAnr al "a nn 4
cent, he will only require to deal with capital OF
G25o, 900, 0Oo S THIS Is large sum, quite as nUcn
as the largest single sum when we have dealt with
In our own funding operations. But the unusual
magnitude OF the OPERATION especially III respect OF
posa appear Impossible. The sudden contraction
Of the debt was equally without pecedent III Imam
cal history; American finance has been altogether
more jerky tnan We have been accustomed TO; II Is
not unnatural that when improvement comes 1t
should De In sudden ana dramatic fashion. The
debt moreover was In TACT contracted under great
Disadvantages, and as most OF these have passed
away quickly, tho Improvement III Americas posi-
ton as debtor is likely 10 be quick too.
Looking at the proposal GA its own merits II may
easily be perceived that there Is much In favor or
Mr.. Boutwell,. ]. Regarding alone the resources Of
America, as q competing borrower with other ma
tons in the money market OK the worlo there IS no
coantry except England which stands better. we do
not attach much value to general estimates ike MIR.
B0utwei's that tile property or the country Is worth
So o)0,OOo,o0 or $40 600. SO that the debt
is comparatively bG saeilc 1t needs no ara ument
TO prove that an industrious nation Of nearly
4s,0oo000 OF people, without great armies or navies
To keep up, VITA unfl.aci SOIL ana Climate Tor tue
production OF raw material and ccnvenences aud
Skill Tor many sorts OF manufacture should be able
TO bear most easily a debt OF .J0O.ugop00. Tho
Americans are more energetic and exercise their
dustry under more favorable conditions tnaa the
French. whose numbers arc about the same, but
who nevertneIess-in spite too OF boated armanents
and an expensive civi staif-geI the pene-
lit OF mucn lower interest than they do.
me Americans besides have shown their ability
TO raise taxation amounting to NTH OF their pres
entdebt, and TO our times Its annual Interest; aud
they can raise less taxation with comparative ease.
Ihnv, faxX tfn n.T
tres wnlcn pay almost no more INTEREST," that
interest yet aOsorbs third or even half an ineasc
revenue. Judged by the usual standard OF re-
sources, the American security Is as good az need be
for the pest security and no nation should be able
to borrow more chelply.
causes OF American discredit for some years have
disappeared, and that the discredit Itself, as no
points out, last icing dssipated, great cnange
having been maze in the last SIX months. prn-
cipa cause Of the discredr was real doubt OF the
stability OF the government; but the decisive con-
quest OF the South, the growing preponucrance
OF the North, and the manifest strength oil the ma
tlonal feeling, must have removed any lingering
doGots OF limId capitalists IL may be assumed for alt
practical purposes that there Will be streag Union
| for an indefinite period inhcriting ana recognizing
the obligations OF the present government But Tue
| principal cause OF OIL when has had any effect
I since the war, has undoubtedly been The talk OF
reputation 1t appeared az one unc rs ,a IL .nc
| American democracy, new 10 dcD's, ana leelih2
kccnly the pressure oil taxatlou anu win WORK
ing class prejudice against CAPITALISTS would pe
captivated by the sophsms OF regulators. But the
discussion has evoked scntimcnti 10 favor OF honest
paymcDt which haa quite carried away the repudia-
tors The opinion OF the country fairly challenged
has been clear and decisive, ana we can hardly
belieye that the talk OF reputation mas done the
Americans any permanent narIn. NO doubt MIR
Boutw ell making q party speech represents that
vote against his party would cadauger tue policy OF
an-repudiation the opposite policy Is discarded
on both siaes-egpecalls che most seductive form of
H. that the principal OF the DEBT where gold
interest was expressly stipulated might be paid IN
paper--apd we may consider the matter settled.
8. Another consideration on the same side IL the
disposition OF the Americans 70 pay OF their debt.
IL Is their tradition TO do 80 They nave reduced the
late aggregate by twenty-five per cent since the c,ose
OF the war ana have paid OH $5J0J0,oJ0. or
81 GOO 900 during Mr.. Boutwel's seven months at
the Treasury The creditors douols as to repudia-
| ton If he has any, may thus be balanced by the
chance OF soon receiving his money. lie may not
have very long 70 wait as there s In the cal
culatlons that with the working surplus now OBJ
tanned OF e2o,coO,0oo per annum, the whole debt
may lie discharged in twelve years; or with a less
surplus in about donbe the time. The mere rcluc-
ton OF the supply In the market must enhance the
market value OF the security probably great deal
more than mas yet been the case, as Mr. Boulwols
operations are kely to he continued.
Last OF all, we must reckon the probable contlnu-
auce OF peace another circumstance IN Mr. Bout
wells favor. lie Is careful TO guard himself, but al
the circumstances poiut 10 peace There IL certainly
no nation disposed 20 quarrel ncedessly with tho
Americans aud their own love OF peace has been
manifest enough, Their priucpal unsettled contfo.
versy T. unfJrtunacy with England, but after tNe
Ventilation OF ill-tempcr about t IN the spring the
dispute has settled down ~ way which shows that
much believe In the chance OF Its dong SO modem