The New York herald., 1869-11-21
ENGLAND.
United States Government Finnnces-NIr. Bout.
wclps Speech and Plan.

welps Speech and Plan.
From the London News, Nov. 81
The certainty that an attempt will soon be made
by the American government to reduce the rate Of
interest on it's debt may excuse our giving some
consideration to the process by which the object
desired may be accomplished. When we hear OF
o debt between i've and six hundred millions
sterling, bearing somewhere about f28 OO0, 900 Of
annual interest, that 1t is proposed to reduce that
interest to s2looo,ooo less, the ways and means
to do hardly be said to be obvious. So great
a financial coup Is not accomplished every day. We
may have faith in its possibility for various reasons.
We may believe that tho credit Of tho government
only recovering from much lower point TO which
it mad fallen through exceptional and temporary
causes, and that the government ID pursuing q
policy which must quickly improve It's credit in tne
market. Still It may be useful to look beyond and
see now the thing can be done.
letter which Is before US, addressed by Mr.
Charles s. p. Bowles to Mr.. Boutwell,, and which the
after would have received when he made MS recent
which, In the ABOVE view, seems worth considering
Stated shortly, the plan Is to issue q new loan OF
81, ,ooo-about $3.50 ooo 0loat four per cent
In gold bonds guaranteed against all taxation ana
expressed in equivalents OF dollars, francs and
pounds-arrangement being made to cash the
coupons at .the capitals or money centres OF all
Countries This plan VIII account for about one.
half or the debt and the remainder Is made up of the
legal tender currency, the five per cent debt which
there IS comparatively less need to convert sum OF
$780, 000, 900 held by the national banks, who be
compelled to take four per cent bonds in exchange
for the present six per cent ones which they hold,
and further sum OF s1O0 0O0 600 which may be left
to be dealt with by the present rapid process OF re-
dempton. There are various minor details, some or
which we shall notice, but such Is the outline OF the
scheme which would effect good deal more than
Mr.. Boutwell, has proposed. Mr.. Boutwell, only spoke
OF an immediate saving OF from $lSOOO,O 900 TO
OO0at the most rather more than f5 900 600:
but that amount will be saved by the main proposal
alone in the present scheme. SIX per cent interest
n ON lttn 10 % nnd Ol ina hn nCnn
and reduction to four per cent VIII save third OF
that amount
dlate reduction or more than $1,000 900 In the inter-
est OF the American debt and II the scheme s in any
way plausible. Mr.. Boutwell's more moderate ideas
must be strongly confirmed. Extravagant as these
hopes may geem we should hesitate good deal
BEFORE pronouncing the scheme, or one ike It, un-
reasonable. A main point must clearly be given In
the projectors favor. The debt the United states
80 far from being overwhelming in capital amount
G really very ,hs IN 81 any
debt between 1--WE and six hundred millions, the
amount is in reality very little over the lower gdre
and 1t VIII only be necessary to deal with the half In
any operation 10 reduce the interest The five per
cent debt may very well be left alone; the legal
should be dealt with on difrerent grounds: 'u the
bonds which the national banks are obliged to hold
are subject to Congressional legislation. that with
a small amount over, TO be left for direct redemp-
ton, about half the United states debt. or about
two hundred and fifty million pounds, is
hands OF the public at high rate OF
interest. Stripped OF all exaggeratlons, this the
solid fact with which American nnanciers have to
DEAL and their task at once ceases TO be formidable
1t may surprise some to be told that four years after
the war which left the Americans indebted In nearly
f7oo 00o,0 0oO incurred during the agony OF a severe
struggle iOr existence, there should be no more
owing than $4,000 200, and tnat the amount
borrowed from the pubic at what must be
considered the low maximum OF six per cent
should be only half that sum. But the fact is on
the surface, ana must itself have an effect ION
American credit when IL s popularly understood
But why should the Americans, paying six per cen
now, be able TO borrow In few months at four ?
In any circumstances 1t may be said the change is
too great to he conceivable. But strange 1t may
scem the unusual circumstances Of the present
appear strong enough 10 Justify an approach TO 1t.
In very lew months American credit has fni-
proved about ten per cent: the six per cents
are now nearly at par; another similar improve
ment VIII make the government master OF
the situation. And q similar Improvement, or Is
greater one, may be predicted with safety.
The new events which have removed doubts Of
the national credit are telling more and more and
what is equally important az public competition
diminishing. Mr.. Boutwell, Is now redeeming an
nually about f20 ,000 practically twelfth part
ot tae sum IN the hands OF tue public; and II is
operation on a limited market. We may al
most expect 1t to work Ike New York
gold ring, forcing up the article IN demand to a
heavy premium ut bound, but without the reac-
ton which is necessitatcd by merely artificial
Withdrawal OF the supply. The question at least
VIII very shortly be one OF American credit as COM
pared with that OF railway debentures or the stocks
OF other governments or any nrst class securtythe
quantity OF American stocks being no longer an OBJ
stace; and when that Is the case, and all other
ccptlonal circumstances TO the discredt OF America
are removed, would only be natural that four per
cent should be the maximum, as with other
0rst class securities. The scheme fs, more
over designed to be popular In form 70 most capital.
ists By having the bonds expressed In European
currency as well ~ dollars. and payable IN Europe.