The New York herald., 1870-03-03

1--we huiiNfcl AilOn NollhtA. EICu loan proceeds
ON me same idea OF meeting our liabilities But as
we look Inrther we mud dierences which Involve
important consequences The loan proposed by the
commitsee has not 70 my mind, the clements OF
success promised by the other loan. IL rs assumed
In both Cases that the coin for the redemption Of the
existing oollgations snail be obtained in Europe.
Then We must look 70 the European market in
determining tue form OF the new loan. Now,
nave reason TO believe that coin loan 70 the
amount ol nve hundred millions OF dollars may be
optaheu ~ Europe on ten-forties at par, provided
the new bonds ara OF the same iorm and purporl AZ
tn0 ten-lOltles, which are already so popular; and
provided further that proceeds OF the loan are
appneo 10 the ayment IN coin, at par Of the Ave.
twsnties OF 1862 The change from ten-forty bond
20 een-tWenly bond as proposed BY the committee,
enange 80 far a. can perceive, made up Of us-
savan!ages. re the nation there Is the same rate
Of interest, and there is the same liked period
During wnien this interest must be paid
while, on the other hand, the period OF
optional payment Is reduced from thirty years
to ten years. II there De advantage In this reduc-
ton DO not perceive It, IL a. the expiration Of ten
years we are IN condition 10 pay we may do 30 as
readily under tenforty rs under the ten twenty
proposed. Il during the subsequent ten years OF
option our advancing credit enables us TO command
favoraply under one AS under the other. IL seems
~ ne understood that the proposed loan IL to ne
made N Europe. As COIN Is more abundant there
than here, ths would be only according TO the natural
course OF thugs This might be- py voluntary excuange
Aor the bonds of 1852 on the part VI holders By
promlscuouS sale. so much Of the proceeds as were
not required for the bonds oi 1862 held abroad would
NATURALLY be applied 70 the IN coin OF these
bonds at home. Az some OF these bonds are now
deposited security for bank circulation II would
seem ~ II This operation must strengthen the coin
reserve 10 the banks 10 sucn point az to aid tho
transn0n 10 specie payments There IL another
consideration or practical value. We must not make
an effort and Iai Our course must be guloed by
such prudence that success Will be at least reason
ably certain. For the nation 10 offer loan and be
refused In the market VIII not do. Here, as
Is 10 my mind doubtful, according To the inlorma.
ton within my reach, IL the loan proposed by the
committee can be negotiated successfully al par,
whe there IL reason 10 believe thai sucn loan AS
have proposed, win us more favorable conditions.
would be received with favor. Bankers there may
be VINO would gladly see themselves announced AZ
financial agents OF tho great republic but 1t remains
10 DO seen II there are any competent TO handle .
ioan Of five hundred million dollars who would
undertake 1t ON the terms OF the comMttee. | am
clear that II ID not prudent 10 make the experiments
when it Ia easy to offer another loan with
ashlngton, in hts Farewell Address, SAID,
why forego the advantages OF SO peculiar
fors,xn Troumds qnt IN the same spirit woad upS say
why foregO the advantages OF q welknown ana pc.
culiar security Why quit our teniortles, TO stand
upon security when ~ unknown aud practically
foreign, whether NJ home or abroadY In tine loan as
proposed BY me there are three conditions, to which
| call attention agsin:-First, the amount which
Ave hundred million dollars; secondly the terms OF
the bonds, being tenfortles, and, thirdly, the pro-
ceeds are to % applied to the nrst loan OF lS62 In
such loan we lind assurance OF success, with the
promise Of reduced taxation, reputation senced,
and the coin reserves IN the banks strength
million dollars. With these OBJECTS in view
l hope shall be justified In the effort
nave MADE. On the Otier nanu, ehOu.d the amend
ment Of the committee prevail, see small ehauce Of
any near accomplishment OF THESE obects. And The
more l examine this amendment the less does 1t
commend ITSELF at least as compared With the other
proposition or course, 1t assumed that the
amount proposed OF tentwenties Ut i've cent viii
absorb an equal amount OF nye-twenties at SIX per
cent, irrespective OF any particular loan; but
loss to see on wnat grounds the holders OF the skies
can be induced 10 make the exchange. WI the
substitute bonds be considered ol equal value? l
affirm not. But assuming that tuey ac-
ceplable how shall they be acceptaby DIS
serveaf II all were at the same starting poiai
the palm might he justly bestowed uDon tne most
swift. la the latitude allowed, stretching over all
the nvc.twenties, there would be opportunity l0r
favoritsn, aud with This opportunity there would
be temptation and suspicion. All this you volunTa-
rily encounter departing from the simple propo-
sition which have lald before the Senate wie our
financial question ~ handed over to prolonged
uncertainty | have already shown n former
occasion tie superior value OF long bond, accord
tnx 90 experience, not only At nome but abroad.
THIS prolohgaton oil The bond Is IN tue nature
Already i0r loan a. six per cent We have
offered hve-twentes, but for . loan at Ave
per cont we nave offered tenior.es IA the
bonds At four aud half per cent beng difference
OF one-haf per cent III the interest," for which there
must be compensation In the duration OF the bond
Alreaay we nave established the iato or compensa-
t0n Tor she reduction OF interest, aud see rea-
son why by tentative process, we should change
this standard. The experiment can do no good
wne II may do harm. II as IA the nature OF =
restriction on our discretion and . limta-
fear, must interfere essentially wish lty mar
ketable Character. II ten. forty bond NJ nve per
cent, Is An equivalent for nvetwenty At six per
cent and quotations of the former are now within
two per cent of the latter then would nfteen.ity
a. four and half per cent and twcnty.sixty at
four per cent be equivalent also. The prOionga tOn
0f time enlarges the option of the nation wnlle It
increases the value OF tne 0ond ia the market Fhat
which IL most favorable 10 the nation Is most favor
able to the market value OF the bonds. and that
which Is favorable To the nation Is unfayorable
Also 10 the market value Of the bonds, rendering
nSi ntlaf an aaIA m cuIf annl
tractcd. Thus ~ every turn are we brought back
tue original proposition. Against this conclusion
English consols. 1t Is sometimes sald II
the short term Of nve.twenty years Is
the standard r,.,uso, Ior six ser cent oona
q four per cent bond, why may we not go further
and establish consols At three per ceat running IL
you please to eternity The technical term copsos
Il an abbrevlaion ior the consolidated debt VI Great
Britain. ana In the eyes OF British subject has its
own sgnincatlon. il means q debt never 10 be
paid, or at least 1t ID inscribed debt carrying
promise OF payment. There Is another BRUSH secu-
rity. small IN amount aud carrying near the same
option OF the government, known as "termlnaDle
annuities." would not have any debt OF
the United States assume either the form or
name Of consols. ] would rlgidy adhere to
dennite periods Of payment. THIS ID the Ameri-
can system Ia contradistinction 10 the British
our debt is permanent. but 1 would adhere TO the
form OF positive payment ~ some fixed period, and
keep this ldea always present In the minds OF the
people. Without the requirement OF law doubt IL
the debt would be paia Political parties would
court popularity by reduction OF taxation. The
Treasury OF the United states, like the British 1rea
eury, would always be without surplus and tho
national debt would be recognized as burden to be
endu RED forever. Therefore do say no c0nsos. Do
senators consider to what extent the government
determines the rates OF interest In the money centres
OF the country Not only for itself does IL determine
but for others also. Government bonds enjoy preemi
investment. and II the interests bgn they
attract the disposaDle money OF the country. Gov
ernment SKIES are worth more than Six per cent
bond OF any private corporation or Individual, no
matter how well secured. Therefore 1t is easy to
that long as retain our standard at SIX per
ccnt-so long as we have sixee-wiii the capital OF
the country seek these bonds for Investment, per-
manent or temporary TO the detriment OF numerous
enterprises important to the national Development,
which are driven to be the stipendiares OF foreign
capital. Railroads. especially Vt the West ana
South are sufferers, beng sometimes delayed by The
difnculty OF borrowing money and sometimes be-
coming bankrupt from run0ug rates OF interest al
ways In competition with the government.
Doubtless the excessive interest now de.
marded Il partly due 70 our fictitious currency,
where fauied paper Is forced upon the market; but
beyond this influence IL that OF SKIES, absorbing
disp0sa6ie capital venture 70 assert that IF We
could at an cary day reduce these SKIES TO Gves
there are millions which would be released TO seek