The evening telegraph. [volume] (Philadelphia [Pa.]) 1864-1918, 1870-07-01

willingness to facilitate funding, but slender
faith in its feasibility. For if twenty-forty
bonds, at four per cent, are marketable the
issue Of four and o half and five per cent.
bonds should not be attempted and, ySce
ceTSd, If only five per cent. security is likely
to find customers, the proposal to issue
others is a mistake, because it entails upon
the Treasury the discredit inseparable even
from an appearance of failure. In another
respect the bill is bad. By the organization
of foreign agencies it in effect confesses that
the sale of bonds must be negotiated in
Europe, or not at all. Now, we do not share
the opinion of those who affect horror at the
idea of foreign Indebtedness on account of
American securities. The fact undoubtedly
tends to aggravate possible financial compli-
cations; but, on the other hand, it implies the
application of European capital to American
development the profits of which more than
counterbalance the risk incurred. STILL the
flow of Government bonds towards Europe
should be the result of natural demand
not of an operation that would place this
country in the attitude of power seeking
accommodation at the hands of distant
money-lenders. Our war loans were all me-
gotiated here; and it would be better to await
a fitting opportunity for the floating of the
funding loan here, than to confess depend
ence upon Frankfort, Paris, or London, for
the means of improving our financial posi-
ton.
For the payment of interest and the gradual
reduction of the principal, the bill appro-
PIRATES out of customs receipts $50, 600, 600
annually, the effect of which would be the
application to the purposes of a sinking fund
of a sum considerably in excess of that re-
quired by the law now in force. We think
this increase undesirable. Twenty-Five mil
lions yearly applied to sinking fund, with
the constantly growing additions resulting
from the operation of that fund, would be
amply sufficient for the maintenance of the
public credit and the extinction of the debt;
and on this basis the annual sum called for
on account of the debt would be much less
than the sum prescribed by the Senate If
we are to go on reducing the taxes, this ten
dency to increase expenditures to hasten the
diminution of unmatured Indebtedness, can
not be too soon checked
The bill is further encumbered with pro-
visions which more properly belong to a
measure belonging to banking and currency.
1t might be well to make some specific class
of the new bonds the basis of new banking
facilities but details relating to note circu-
lation and gold banking are out of place in
measure which should contemplate only
the funding of the bonded debt.
In its simplicity the bill before the House
is preferable. 1t authorizes the issue of a
single class of bonds, redeemable after thirty
years, and amounting in the aggregate to
one thousand millions. The provisions in
regard to the issue of the new bonds, and the
conversion of outstanding fve-twenties, are
clear enough. And the system of foreign
agencies is very wisely discarded. The de-
batable question is, whether four per cent
loan is at present negotiable. The common
place plea that the United States Govern
ment should be able to obtain all the money
it needs at rates as low as those paid by
the trst-class powers of Europe is OBJ
viously untenable. A government can
scarcely hope to borrow on much better
terms than the most favored of its own
people, whose average rate of interest deter
mines, approximately, the rate which the
Government must expect to pay We need
hardly say that money is worth much more
here than in Germany, France, or England,
and If demand for our securities comes
from either of these countries, it is because
our Investments yield larger returns than are
available there upon home investments. For
this reason we are not sanguine as to the re-
suit of the enactment of the House plan. If
the Secretary of the Treasury has more conf
dence upon this point, let him have chance
of trying what can be done. Failure will not
be fattering to the national pride, but success
would most assuredly be great triumph for
Mr.. Boutwell,.
We trust, however, that the section en-
powering the Secretary to employ Treasury
gold at his discretion in the purchase of the
present six per cent. bonds will not be sas-
tanned. Adequate provision is made for
carrying into effect the purposes of the Sink
ing Fund law-and this should suffice The
public credit requires no more, and no more
should be attempted. If, after meeting all
| requirements, surplus exists, its legitimate
| application will be in one of two directions
Either it should be reserved for the further
reduction of taxes, or it should swell the accu-
mutation which must begin some time, if
| specie payment is ever to be resumed, and
which, meanwhile, should help the Govern
ment to defeat the Vaccinations of the gold
| gamblers. #........
Another of the propositions submitted by
the Ways and Means Committee is equally
Objectionable. 1t virtually converts the
Treasury into bank on a specie basis, allow
ing it to receive gold on deposit, issuing
three per cent certificates, and permitting
the Secretary to use seventy-fve per cent OF
the deposits in the redemption of bonds not
yet due Our financial system is already
sufficiently complicated; the Treasury has
responsibility and work enough as it is, and
the proposal reported by Mr.. Schenck would
add to those responsibilities and eomplica
tions risks which are at variance with ord
nary notions of financial safety.
CANADIAN INDEPENDENCE AND AN
NEXATION.