The Wheeling daily intelligencer. [volume] (Wheeling, W. Va.) 1865-1903, 1869-11-15
THE RATE OF INHERENT ON THE
PUBLIC DEBT.
A Searching Examination Of the
Question.

HoAEohInk ExnmInntlon OF tue
Question.
From TIC New York Pot.
United States six per cent bonds, the
principal and interest OF which are both
payable In coin, are now worth In the
market almost exactly nlnety-one per
cent OF their par value. In January,
1851, when the political condition Of the
country was unsettled, but few expect.
cd actual war, similar bonds were
worth just par; bat they rapidly fell
within o month, as the situation be-
came threatening, TO the same value
they now have. Five or six years eaTll.
er, when tho public debt was very
small, when the currency was sound,
and when no threat OF reputation or
apprehension OF compromise with the
national creditors was thought Of, SINH.
lar bonds were worth for many months
one hundred and fifteen per cent; and,
at the highest point ever reached by
the credl. OF our government, o large
number Of them were actually pur.
chased for redemption by the Treasu.
~ at "a premium OF twenty.one per cent;
and the i've per cent bonds OF the ma
ton were ut O small fraction above par.
In other words, the credit Of the UnI.
ted States ls now such that they can
borrow money for long periods at seven
per cent, and this Is the best rate at
which they have been able to negotiate
loans since the disturbances which gave
rise 10 the rebellion began 10 be seriousa
ly felt In the markets. But when that
credit was quite unshaken, when the
national loans were regarded as q per~
feet security, beyond any other within
the reach Of American capitalists, and
when the finances OF the country were
free from great speculative agltallons OF
every kind, the best rate ut which our
government could negotiate long loans
was five per cent per annum.
1t Is constantly insisted, by men who
form and discuss projects for funding
the public debt, that our Government
ought not to pay any higher rate for
loans than other governments; and
that since Great Britain bOrroWs
money at little more than three per
cent, and France at four and a half per
cent, good management will bring our
bonds down 10 the same rate, Bot
these nations borrowed AZ oheaply III.
teen years ago as they do now. Our
national credit was as good then as
that Of either OF them, and was Ger.
tRinly better than 1t ever has bSen at
any other time. Why, then, were the
United States unable 10 borrow ut the
same Interest paid BY them? The credit
OF the French rentes Ii as good at home
as that Of the British conBols; the debt
10 held by far more OF the French
people than OF the British, 90 that II ia
more truly O national interest with
them, and is quite independent Of the
form Of government. Why. then, does
France pay half as much more as
England does for the use OF money?
The answer 10 these questions Is
plain. The rate OF interest In any
country does not depend alone on the
credit Of the particular security offered.
A controlling element In the problem
Is the natural value OF the use oil mon.
ey In that country, and this depends
on the average profits OF CAPT.
tai there. Capital IL more fruitful In |
the United States than In any other |
great nation, and the rate OF interest is |
therefore naturally and necessarily |
higher here. The use OF money is ao- |
tually worth more In London than In |
Amsterdam; In New York than In Lon.
don; In Illinois than In New York and |
In California than in Illinois; and, 80 |
long as this is the case the rate paid for
Its use will vary In these places accord
lngly. The credit Of the city govern
ment OF San Francisco Ia not less than
OF that Of New York; yet, for many
years, the former has scarcely been |
able to obtain on ten per cent loans q |
small fraction Of the amounts which |
the latter easily borrowed at SIX.
1t is true that growth OF international
trade and exchanges tends, to some
extent, TO equRlize the rates OF inter-
est. But capital Is proverbIally con-
sentative and local; slow to emigrate
and timld to transfer. The great mar
ket opened Of late years for the bonds
OF the United States among the saving
people OF Europe will greatly help our
ability 10 borrow, II all who have
bought them are fairly and wisely
treated. But the help will come slow
ly. They buy our bonds only because
the interest they receive on them Is
immensely greater than at home; and
even then they buy them sparingly
and with hesitation. II the difference
In Interest 10 reduced, part OF the mo-
tive to buy ID taken away; and unless
this loss Is made up by an increased
sense OF security, the market will DO
destroyed.
At best, there Is no reason whatever
To suppose that the United States will
be able 10 fund It's debt at the same
rates paid by the nations OF Europe, In
which the Oldest and largest accumula.
tons OF capital are seeking Investment,
1t would be the surest symptom of
decline In the rate OF our national
growth, II money could find no invest.
ment here at more productive rate
than In those countries. Nor would the
widest market one nation ever offered
for the debt OF another BIO sufficient to
reduce the rate OF Interest upon 1t to u
point near the lowest rates paid bv the
purchasing nation for Its own. IELon-
don capital buys cousols at three DER
cent, instead Of crossing the channel to
buy equally secure rents at four and q
half, it would be folly to expect It to
cross the Atlantic ocean 10 buy our
bonds at the latter rate.
Let such delusive expectations, then
be doue away. Let no one expect I'm.
possibilities. Let no useless and Inju-
rious efforts be made TO force upon the
NNPAs"hoNa oVNAAthANp AOl ulCu kLl6Ib
cannot be q market. With economy In
the government, and an honest collec>
ton Of It's revenues, its credit may well
rise to the highest point It has ever en-
joyed; and there seems TO be no reason
why President Grants administration
may not yet see the national bonds
accepted everywhere as an absolute se-
curity, unsurpassed In the world; and
their pledge OF five per cent. interest
again In demand at par In gold. II the
government sets this high aim reeoIute.
ly before iT, and succeeds In its accom-
plishment, It will have wrought the
greatest work ever attempted BY lnan.
clal craftsmanship. But 1t 10 honest
work patient and faithful attention to
every detail Of the problem. and not
any mysterious juglery with the form
OF bonds, or legerdemRin In the mode
OF their negotiation, that can contribute
anything to success.
SECRETARY BOUTWELL, is determined
that the New York Custom House shall