The aegis & intelligencer. [volume] (Bel Air, Md.) 1864-1923, 1869-05-28
Dangers Offhe Financial i$.gt4
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J. tiou-3rtGEers .she0d.
sfiii; ttiiic @sa scr everybody whc lad ss,
reputation for Judgment or sagacity W, 81 {
opinion that the prodigious expenIiiure:
OF that period Of waste and destruction,
would be followed by widespread finSn-
cial disaster and distress. Mr.. Bright in
his speeches abroad, Mr.. Chase in his re-
ports at home-persons as little disposed
to be crackers or alarmists as anybody in
Europe or Nmerica-expressed this orin-
ion with great positiveness and emphasis.
We have gone on four years since Tie close
OF the war, and apparently their gloomy
predictions ave been belied b. the cIcnl,
The cost Of living has indeed been high
butsthere has been no greet reyulsion in
trade, no great stoppage of industry, no
panic. We have kept the wheels Of bust.
ness moving with more or less efficiency
and success, until the country has conclu
ed that, although VIC have danced, it is,
after all, no very serious matter to pay the
tiddler But abundant signs begin to
thicken upon US that the Predicted evil
day has not been averted, but only post
poheds At last, we are apparently on the
eve OF paying tho heavy penalties of 81
g4ntic war.
By what means have the consciucnc of
Our prodig0l expenditures been so long
postponed? The answer is not difficult !;
tine eyi! day has been put off by the ordi-
2ary resources of prodigals- borrowings
The process Of borrowing has been dis
guiscd under the delusive tallacy that in
exporting bonds 10 Europe to meet our cur
rent debts, we have been exporting real
values exporting property. But it is too
obvious for argument thaC we have been
Wcrely exchanging one form of Indebted
ness lor another. The bonds have got to
be paid, just as much as the heavy debts
for imported goods woVld have to DC paid
if the bonds had not been sent out Of the
country to adjust the balances. The only
difference is, that, by means Of tho bonds,
the time ofpayment is postponed. Besides
paying for our future importations, we
have got to pay 10 foreigners the semi-an-
nual interest on the exported bonds, and,
sooner or later, the principal So long as
the prodigious glut Of the bond market
lasted, we seemed to go on swimmingly.
Bonds have been exported to pay the in
terest on the bonds already in the hands of
foreigners. We have thus been accumu!a-
ting debt upon debt paying old debts by
the easy method OF mourning new ones. 1t
ought to have been evident throughout
this pleasant process, that it could not last
AS we had ceased to manufacture bonds, as
the supply, enormousas it was, was limited,
this mode OF lodging present payment and
piling up future liabilities to foreigners was
destined to end. While it has lasted we
have been borrowing of Europe at high
rate of interest plus exorbitant, ruipous
"shaces." We must pay not only the reg
ular six per cent, but must pay full hun
dred dollar bond which we have sold to
foreigners for seventy or eighty dollars
And the current interest is at much high
er rate than the nominal six per cent
When we receive only sixty-six dollars for
a hundred dollar sig per cent. bond, the
rate of interest which we really pay is not
six per cent, but nine, besides the bonus of
thirty-tour dollars at the final settlement
For the last four years, we have been in
curing heavy debts to Europe on these
ruinous terms; continuing to export bonds
to meet our current debts and to pay the
accrulng interest on the heavy amounts of
bonds already exported.
We are nearly at the end Of our tether in
this career of debt and extravaganza Now,
when the supply of bonds available for ex-
portation is getting exhausted, Mr.. Bout
well comes into the market as purchaser
of bonds, at the rate of fifty-two millions
year. He thus arrests the ebbing exporta-
ton, sends up the price ofgold, and spreads
anxiety and alarm through business circles
by raising the inquiry how we are hereafter
to meet the claims of our foreign creditors.
When the expectation of bonds stops, what
are we to send abroad2 The semi.annual
interest can then be no longer paid by the
expectation of other bonds. The balances
against us in international trade can then
be no longer met by the expectation of
bonds Then will have come the gloomy
dawning of pay day. The interest on the
exported bonds will have to be paid in
something. Our importations of foreign
goods will have to be paid in something.
When the bonds, having risen to par, are
returned upon our market and sold, we
must send back their value in something
What will that something be? Gold, while
our small stock lasts; but that will be soon
exhausted.
What then? What then?
We submit the question to thoughtful
men who have sufficient discernment Of the
SlSlo III VIC shy W IOlcCaSlc lue coming
storm. We submit it to the crazy tariff
men and intlationists who have rendered it
impossible that we should manufacture any
thing to export. We submit it to the re-
vengeful Radical destruotives who have
kept the South disorganizcd these four
years, and prevented the flow ofcapital in
to that section to revive the cultivation of
its great staples, which are our chief arti-
cles of export. With regard to this process
ofpaying foreign debts by the expectation
Of bonds, we are manifcstly near "the be-
ginning Of the end."-N T. World.