The evening telegraph. [volume] (Philadelphia [Pa.]) 1864-1918, 1869-12-09
sPrR1T OF Txzn PRESS.
Editorial Opinions of the Leading Journals
Upon Current Topics Complied Every
Day for the Evening Telegraph.
FINANCE WRONG END FOREMOST.

report demonstrates that ne is mecnanlc IN
finance and not an architect. He does not
seem to know how the several parts of the
financial edifice should be adjusted to one
another to shape it into symmetrical whole,
nor in what order the work should proceed
from the foundation upwards. The things
on which he lays the principal stress are no
doubt, important; but he is busying himself
with the roof before there is anything to sup
port it.
The main feature of his report is his plan
for the immediate refunding of the public
debt; whereas the thing first in order is
the srestsration of q sound currency on a
speoie basis-a subject which he Sights and
postpones 1t is a superlative and Quixotic
folly to expect to refund the public debt to
advantage so long as the basis of our none
tary system is an irredeemable and fluctuating
currency Even if the debt could be re-
funded (which we do not believe) at four and
half per cent, in the present state Of the
currency it would be inexpedient to refund
it at that rate on loans so long as he pro-
poses because if we can borrow at that rate
with our present irredeemable and redun-
dant currency, we could certainly borrow at
a much lower rate under q sound monetary
system. The average length of the loans
which Mr.. Boutwell, proposes is from twenty
to twenty-five years; and it is not wise to bind
ourselves to pay for that long period the rates
of interest at which we can borrow money in
the present disordered state of our finances
To refund the debt at lower rate of inte-
rest now would be a temporary advantage,
overbalanced by certain future losses, as we
shall be able to borrow at a rate at least two
per cent lower in a sound state of the cur
rency and finances than we can at present.
To offer a four-and-a-half per cent. loan
and not have it taken, would not advance the
public credit, but in jure it. That four-and-
a-half per cent. loan will not be taken Except
by the national banks under compulsion) in
present circumstances, is as certain as it is
that capitalists are not fools. But even if Mr..
Boutwell, could succeed in carrying his Chi
merical projec into execution, what would be
the amount of the gain? Why, eighteen mil
lion dollars per annum; neither more nor less.
The saving in the rate of interest would be
one-and-a-half per cent. His three proposed
loans of four hundred millions each, would
make an aggregate of twelve hundred millions;
and one-and-a-half per cent. saving on twelve
hundred millions would be eighteen millions.
Eighteen millions year is bagatelle in
comparison with what the country suffers
and loses every year by our disordered cur
rency. 1t is less than the amount of taxation
that would result from funding the green
backs at four-and- -a-half per cent. 1t is about
one-twentieth part OF the present revenue of
the Government; a reduction so slight that it
would be scarcely felt by the taxpayers The
proposed by the Secretary is of very sub
ordinate importance even if it could be
accomplished. But it cannot be accomplished.
The debt ought not to be refunded until the
finances and currency in such healthy
and settled condition as to inspire confidence
abroad, and enable us to borrow at the lowest
rates. 1t is not expedient to bind the country
to pay anything above the lowest rates for
long period of twenty thirty years; and
the lowest rates at which we can borrow will
not be reached until after our monetary sys-
tenn is restored to soundness.
The reason assigned by Mr.. Boutwell, for
the low price of our present bonds, is the
doubt entertained as to their payability in
gold If this is a correct explanation he
ought to perceive that the doubt would be
effectually removed by the resumption of
specie payments. In point Of fact, it origi-
mated in the continued suspension after the
close of the war. When the five-twenty loan
was authorized, it was supposed by Congress
that specie payments would be resumed before
any part of the loan would become payable;
and had this expectation been realized, the
question of its payability in a deprecated
currency would never have been raised The
controversy on that subject will end with re-
sumption; as we shall then have but one kind
of dollars; and promise to pay dollars can
have but one meaning. If the real obstacle
is what Mr.. Boutwell, supposes it to be,
nothing is necessary for It's complete removal
but restoration of the currency to the specie
basis.
But he totally misconcsives the reason for
the low price of the public securities. The
Ten-forty bonds are as low in proportion as
the Five-twenties, and yet the Ten-forty
bonds are, by the law authorizing their issue
and the language engraved on their face, ex-
pressly payable in coin. If Mr. Boutwell,
thinks he can sell four-and-a-half per cent.
bond because there will be no doubt as to the
medium of payment, how can he account foi
the fact that the five per cent. bonds, about
which no question has been raised, are sell
ing SO much below their face value in gold!
The price of the Ten-forty bonds is a conclu-
sive demonstration that Mr.. Boutwells pro
posed new loans are mere financial moon
shine. If his proposed bonds are to be un
questionably payable in gold so are the Ten.
forties; if they are to be exempt from taxa
ton, so also are the Ten-forties and as the
Ten-forties, with higher rate of Interest
than he proposes are greatly below par, hov
can he expect to sell an inferior security at ,
better price?
The real reasons why our bonds of all de
scriptions are 80 mnch deprecated are first
that the market is yet glutted with them, and
secondly, that capitalists distrust the fnan
cial soundness of a nation whose currenc
consists of irredeemable paper. The glu
will be relieved by the mere lapse of tim
and the growth of capital seeking investment
but the disordered currency requires a legis
lative cure II is absurd to think of refundin
the debt to advantage until after both evil
are remedied. We should not seek barely
lower rate of interest, but the lowest. Eve
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