The New York herald., 1870-10-22
FUNDING THE EATOSsL DEBT.


To THE EDITOR OF THE HERALD -
The Secretary OF the Treasury, In order TO carry
out his cherished project Of funding the debt at a
lower ana consequently less costly OF interest,
has lately put forth circular stating the terms and
conditions upon which the new loans authorized by
the last Congress win be Issued. 1t viii be recol
lected that at late moment OF the last session OF
Congress an act passed authorizing the issue OF
three classes OF bonds ana the recall OF those out
standing ana over due. Those OF the first class are
to bear i've per cent interest per annum and are
payable al the pleasure OF the United States after
ten years. Those Of The second class bear our and
q half per cent, payable II teen years after date,
While those OF the THIRD class TO bear four per
cent, paya le after thirty years.
In question has often been asked how holders or
ahve-twenty bond bearing six per cent. are to be
persuaded 10 sur enler IL for one bearing but four
or our and hall. The reason ~ obvious; the i've
twentleS are over due and Liable 10 be PAID,
the government having the opuon Of paying
them IN five years from their date, which IL
twenty; so, according to the terms OF the circu-
lar lar o. me Secretary the holder OF hve.twenty
bond Of the new loan, Of whichever issue he may
select, about neither Of which can there possibly
expressed upon h ir lace. and one which Is exempt
from taxation In all shapes by any authority either
OF lhe United States, or State or municipal or local
The Secretary gives notice that subscribers to the
new loan viii have preference In the following
Order:-Frst. subscribers for equal amounts OF the
first and third classes. Tins 1t VIII be seen, would
produce an average OF four and q half per cent per
annum. Next. subscribers 10 ell, three classes
winch produces like result. Lastly, subscribers
for per cents according to she per cent OF prem
ium offered, at par. according TO the OF sub
scription. This course il evidently taken IN order
secure AZ full q subscription 10 the four per cent
loan as to those OF The higher denomina ions.
However, as there are but two hundred In liiOn OF
OF the i've per cents authorized, Mr.. Boutwell, can
not expect TO achieve much with the four per cents
0f which The law authorizes one thousand millions,
beyond that part Of IL which may be taken IN con-
nccton with the higher rates. rs in his circular he
makes no provision lor subscriptions 10 the four per
Europe presents wide field in which to sow our
four per cents as money IL cheaper and mere plenty
there than III this cOmparativeiy new country; and
the objections urged in Congress against paying
the interest abroad-that In case OF a war our
securities would not only deprec.ate, but return to
present wcr TO be utterly without ioundation; for
our bonds have neither returned 10 us from England
nor Germany. Experience has demonstrated 10
their hold that Is better to keep them than part
with them IN exchange for the securities or the
terng thrones and iaing dgnasties OF Europe. That
while the United States nave Jus. emerged from the
fire unscathed and regenerated Europe IL just about
10 enter IT, IL Is true mat on the commencement OF
he war, IN common with al other values on the
London stock market, our securities deprecated. IL
was, however, merely momentary spasm, for hey
have since recovered, and have reached rr1ce With
IN one-eignth OF one per cent OF the highest price
they have ever known.
II this funding scheme be successfully carried out
as no doubt it Will, considering the nigh rank the
United states have attained III the amly OF nations
since the war, and since all doubts to the
pelled MIR. B0us wells administration Of the Treas
ury VIII hold deservedly high rank upon the page
OF history rs II was mainly owing to his eXertiOns
and II difference to his wIsnes that the Funding bill
was finally carried through Congress- further. IL Is
owing to his elicent collection OF the revenue ana
proper disposition OF the surplus that mas caused
our bonds 70 attain their present rank.
Every one In this country should feel interested In
this matter and 40 whatever lies In his power TO
assist IN the negotiation OF the new bonds, III 10
doing IN reducing the rate Of interest from and
a half to two per cent the burdens of taxation are
llruteueQ oAaCttV the DrODOrttOn.
Notwithstanding the fact that General Butler In.
snates that Secretary Boutwell, Is in iavOr OF this
generation paying tne national debt, facts prove him
10 ne wrong In making such an assertion The debt
Is twenty-five hundred millions OF dollars, the Fund
ing bill OILY authorizes the funding OF fifteen nun
dred millions, one thousand miions OF which cam
not be paid under thirty years, three hundred
m lions OF Which cannot he paid under
fifteen years, and, lastly, only two hundred
millions can possibly be paid in ten years,
and nation that can save nearly one hundred and
nifty millions In one year, ~ we have done, would
hardly feel TWO hundred millions at the end or ten
years. So 1t Is evident that this generation Will
be necessitated to pay the debt and that neither
Congress nor Air. Boutwell, have any idea tnat 1t shall