, 1870-06-23
rHE1xpRoyEp FUNDING BILL,

We have already expressed our thorough
approval of the last Funding bill reported
by the Committee OF Ways and Means,
and which is about being brought up
for definite action. The bill is not coer-
Give yet is framed with 80 wise recogni-
ton Of the wants both of lenders and the
government as to make it more effective
toward securing reduction Of rates Of in-
terest than the coniscating bills, which
must necessarily tarniah the credit of the
government. It provides for the issue Of
81, ,000, 600, 900 OF bonds at per cent,
e1changeable only for gold at par OF for
the and per cents now outstanding,
at par. The bonds a1e to run, at least, thirty
years, and thereafter indefinitely, until the
Secretary Of the Treasury gives notice of
desire to pay them, in which event the in
terest will stop after si1 months. This
form of bond avoids the necessity
of borrowing the same value again.
As the rate Of interest on long loans is
not likely 10 fall below per cent, it is OF
great importance to have any loan negoti-
ated at that rate remain at that rate until
the government is prepared to e1tingnish
the principal The bond would have been
more easily negotiable had the government
reserved no right Of payment at par after
thirty years, but made it q simple annuity,
sxtinguishable only by purchase at the
market price, like the British consols or
the French rentes- Perhaps, if Congress
shall make any change, it should be in that
direction, Is every option or advantage the
| government retains over the creditor raises
its rate of interest or increases the difficult
ty OF negotiating the loan at the lowest
possible tate.
We commend, however, in this bill, the
provisions which limit the sale of the lands
to an absolute sale at par, in gold, instead
OF sliding them out at 10 per cent discount,
by exchanging them for greenbacks. We
are glad the bonds are payable ut our Treas
ury, and IN our coin, and are exempt from
national, as well as State and local, taxes.
This exemption from taxation renders then
J nearly as desirable to capitalist as bont
Of city OF corporation, at per cent. Il
with these Inducements, the new per cen
l bonds cannot Immediately be negotiated a
> par, that does not detract from the wisdom
S Of the bill It only proves that, howeve
: favorable we make the terms of bond, "
cannot borrow at per cent, and must sir
It ply labor to improve our credit, and wa
}, until We can.
The fifth section provides that th
y Treasury 1nsy pay per cent interest Q
j. | dnrac;t. ,f x,o5d ;ee,1ipY q v,ar ~anf NIL
70 certificates therefor, payable on ten day
|, notice, and may apply th1ee-fourths of th
II gold SO deposited to the purchase of $50
q This is an excellent and sound provisio.
y It will meet the wnnts Of large numbers {
ID banks, and holders of gold who desire
s have the equivalent Of gold, but cann
l. afford to lose all interest on the value i
II vested in il, as they must if they keep Il
r gold itself. The 3 per cent gold CO
u h6cates VIII, therefore, be preferred by Il
II merchants, who have to keep sunply
p gold for paying duties, and to the bank
'e' which, as they approach resumption, wou
y be glad to hare reserves which were Il
to equivalent Of gold, without losi1
1t all interest thereupon- Prominel
tn New York bankers predict that, under th
IN clause, 5000, 0oo, O00 Of gold, in addition
as that now in the Treasury, would be depo
TO tied. With this the government could br
g IN about S160, ,ooo, 600 Of ase-twenty bond
u # its reserves Of 20 per cent should
OF drawn out by holders Of the certificate
20 the worst effect that could result would
D. the necessity Of reselling the bonds, viii
~