The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1870-06-28

will urge upon the House 2f Representatives
an early consideration Of the Funding bill.
This is tho House substitute for Mr.. Shermsns
Senate bill. The main feature of this measure
is to convert thousand million of the out
standing six per cent bonds into new bonds,
or consols bearing four per cent interest and
having thirty years to run. These new bonds
are to be exchanged dollar for dollar for the
old securities and are not to be sold at less than
par in gold. 1t is believed that the debt can
be converted and consolidated on these terms.
That, however, has to be seen. The five
twenties are now at about par with gold, but
the skies Of 1881 are quoted nearly Eve per
cent higher-that is, the difference between
the market value of the fve-twenty six per
cent bonds, which are now due or about to
fall due, and the bonds bearing the same inte-
rest, which have eleven years to rum. is FIVE
per cent. This shows clearly that bonds OF
long date are more acceptable and much more
valuable. The longer time they have to run,
therefore, the greater the value. 1t is upon
this principle that Mr.. Schenck expects to con-
vert the six per cents into four per cents at
par. But, If thirty years four per cent bond
| can be exchanged for the skies now due or
about to fall due, why could not three sixty
five one, having forty or fifty years to run, be
exchanged on the same terms? By parity of
reasoning this ought to be so.
| The difference between four per cent interest
and three sixty-fve would on the whole debt
amount to over eight millions year. This
would make nice sum to be applied to the
sinking fund or to be taken off the
shoulders Of the people through reducing
the taxes. Then, such a bond or consol
would simplify the debt, and all the operations
Of the Treasury bankers and brokers. Bear
| ing cent day interest the exact value
could be calculated instantly by every person.
The most ignorant even could tell how many
days the coupons had run toward the yearly,
half yearly or quarterly payment of interest,
| and to cent what they would be worth at any
time. 1t would inaugurate simple and beau
ttul principle in financial operations. AS to
the payment of the debt, it would make no
| fifty years to run. The government can enter
the market at any time and buy up its secur-
ties just as individuals do. The sinking fund
| can be applied to the liquidation Of the debt
whether the bonds have one year or hundred
| years to run. Whatever surplus funds the
Treasury may have for this purpose-ten mil
| lions or hundred millions year-they can be
| used just the same. Long bonds would be no
| Inconvenience to the government, while they
| would, indeed, be great saving, through the
reduced interest they would bear. We advise
| Congress, therefore, to consolidate the debt in
a three sixty-fve security having forty or fifty
years to run, if that be practicable. As was
said before, bond of this long date, bearing
three sixty-fve interest, ought to be as good
as thirty year bond bearing four per cent
interest At least there is no reason why the
experiment should not be made.
| There is one very obnoxious feature of the
Senate Funding bill which we hope the House
will not adopt. That is the proposition to
employ agencies abroad to manipulate the
the debt and to pay the interest on it. There
is no necessity for any such agencies. 1t
would be simply job to put money into the
| out any benefit to the United States. OF
| course these men and their agents and cor
| respondents here are very anxious to get this
| job, and are using all the arguments possible
| to that end. But we do not want any such
outside and fictitious aid to give character to
known. There is scarcely village in Europe,
particularly in Germany and some other parts
of the Continent, where the high credit
of this republic is not appreciated. The
coupons on our bonds can be exchanged
almost everywhere, as Bank of England notes
are, for their face value in gold, and in some
places they are at q premium. 1t would be no
advantage to have special agencies abroad to
pay the interest on the debt Besides, it should
be an object with the government to make all
financial operations centre in the United States,
and in New York, the great commercial
metropolis of the country. Congress should
frown down any attempts to transfer the finau-
cial business that can be done here to Europe.
The telegraph and steam power make commu :
nication rapid between all parts of the Old
World and America, and intermediate agencies
are things of the past. The time is soon
coming when New York will be the monetary
and commercial centre Of the world, as well as
of intelligence. Our old fogy Congressman
are dreaming of the past when they should be
looking to the future. They do not see that
we are fast breaking away from the leading
strings Of Europe. Funding the debt, and the
principles we may establish in doing that, may
facilitate or retard, to some extent, the con-
trolling financial future Of this country. and Of
New York Let us not throw away our oppor-
tunties. Let us bring Europe to us and our
system rather than to 60 over there for every
thing, as child goes to its guardian. We
have reached the full stature of manhood in