New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1870-05-18


beep i'm value labor has increased There
has been steady decrease OF the rates Of interest there
Before the European bank rate had rarely peen pe
low five OF - per cent per annum IL now rules ana
has ruled for years past mainly at Two ana halt
In three Der cent per What We then expect
IL our own country before tine end OF the next de
cadet This thousand millions of bonds, while held In
speculative hands constantly threatens 70 dcrange our
money markets, and would have done so ere now but
that we passing Though time of comparative
tranquility. should the Emperor Napoleon die, or q
revolution break out in Europe, You wond soon expert
ence pertncnce of this consideration; ana upon
every recurrence Of such disorders in Europe or at home
our bonds are liable be returned upon our hands III
manner aud bulk which would be most disastrous 10
our commercial interests. one of the first oonSuera
TONS Them in the present legislation should pe 10 o''
stall any such danger as this.
Mr.. SCHENCK.--Woud not disturbance in Europe tond
60 promote investment in American securitiesf
Mr. BowIEs-Eventually; yes This is a matter when
has puzzled ON people much, but IA perfectly snup"
The disturbance of peace locks up money ana so depre
ciaes European values that they cannot be ready ais
posed OF al fair equivalent In the necessity for money
then our bonds are home because holders prefer 10
realize that which will show the least loss and to hoid
their European values for recovery This also because
our bonds are on surface and in large denominations
or in speculative hands.
TIE SoN-REvENUE PAYING CHARACTER OF OUR BONDS.
Scond To keep debt where il is so as TO save the
export " an equivalent amount Of taxable values when
it, return or conservation in this country would cause
be exported in its place This debt, as Is to-day is
held of course free taxation by law; and is there
fore not source OF revenue support in any degree 10
our Government The values which would take It's place
abroad the contrary, generally six ana seven per
cent gold bonds, Indebtedness Of our c0rOratOhs-
state railroad or Other-whch are, furthermore only
kcn in Europe at amuch grcaterdepocation from their
Intrinsic value than the Government bond itself
I'm Europe the credit OF government is as rute greater
than that Of any subordinate TO that government
This debt is already remarked, free by law from tax
oon abuses and complaints result thereiTo ana
pubc disposition is thereby created the income
coupons Of the present bonds crossed in the steamer
Scotia last week, with gentleman who has been one OF
or state Trasurers and who complained bitterly OF the
prevalent practice OF lodging assessors by purcias
ing or borrowing Government bonds just previous
TO the assessors visit, and disposinS OF the
same Immediately thereafter. thus escaping the
payment Of taxes both state ana red
eral. predicted great difficulty in the future in
event of the OF high rate issues, thus freed from
taxation and maintained that the less conversant masses
Of the people would be constantly tempted TO return
upon the question OF taxing the income or coupons OF
such high rate bonds He at allowed that the issue
of q per cent bond would entirely do away with the
difficulty as no one would think Of taxing rate Of inter
est SD low and from which the taxation had beenso to
spealGlrcgd discounted. The reduction Of interest
rate from SIX to per cent is practically tax Of 335
per cent upon their present income which exceeds the
most extravagaut rate proposed by those in favor
~ such taxation. Capital TO this country from
places where it because here it finds its best
employment If You could legslate TO stop the Govern
lnent bonds from going out, you would, as already
stated, only force equivalent amount OF other In
tebtcdncss abroad With country whose capital Is all
employed and oyer-emplOyed-whose portfolio is full to
oyeraownryou cannot put back into it thousand mil
lions without taking equal amount of some
thing else II is BETTER then, to let the Government
bonds remain where they and keep the country
raues irlcI 9ra5 and therefore source ofTerenne
% the Government.
TIE INTERN STANDARDIZATION or OUR FINANCES.
Third: To use the debt means of extending and
consolidating international power We fear our peO
e at home do not attach the importance to this inter
national element which our friends who reside abroad
think il deserves We have lately passed from time
of war and menace all sides, during which all our self
ish instincts awakened that we have not yet een
Willing toJueuy ~oig and consider tho intoTocts
claims of other nations or outside friends upon u.s.
in the letter Grant presented several phases
~ this point Il estimated that about fifty millions OF
our Indebtedness is annually brought back 10 us 10y
cmcTants or citizens Of own or other nationaiues
returning or transferring their residence TO this conn
try The amount so returned is not alone in bonds,
but in reenbacks of which quite large quantities are ex-
ported for sale coming immigrants From reliablein
formation learn that the sum 10 be funded Will not
probably exceed thousand millions Of dollars. Now
there are said be nearly thousand millions abroad
Already principally in fye-twenes, that the whole
matter mainly upon what is TO be done with that
part Of the debt already abroad which is in the five
twenties which we do not back here
1Jle to carry it here. We want new or additional
loan: we wish merely TO convert transfer the five
twcntics in Europe from bond 10 anCther-from
speculation to investment-from doubt TO determined
status. This may leave the balance OF our dcDt to be
provided for natures, at home and 10 serve mean
while As il has served usefuly hitherto The balance Of
fhe fvetwcnes might he funded here at home through
the National Banks and other channels.
would call your attention TO a document pre-
pared for insertion in part the weekly circular Of my
house. shall endeayOr TO be as brief as possible IN
order TO avoid weaying the patience of the Committee
MI ALiIsON-I think we have time; the House does
not meet until II O'Clock.
"The Funding bill now proposed in the United States
differs from the conversion Of European debts under sim
liar circumstances in the following essential points,
"Tbc conversion of the French RrntcS also the
Austrian. and others consisted III the forced aud mne
,ilate reimbursement by new obligations substituted
therefor aud upon different conditions. IL forced
decentralization Of the original obligations, and
palliative, they offered at the most u the unwilling re-
spient-, conditional difference between the value OF
HE old and the new bonds; Ihe American plan allows
the 205 remain, and only orders teir redemption or
Conyers. in proportion the new bonds are issued,
aud with the money resulting from their negotatlon
This process takes place freely III the market without
COnstIaint OF any sort
very interesting fact to place before Europe
ans IT clears up all doubts fears that Govern
luent will do what some Of their Governments have
done, i. G.. force the conversion of the debt.
"In most cases similar European conversions have fur
rshod an adrot preteXt for covering increased loans
which they did not dare TO ayow The Federal CONVEX;
condition that the public debt shall not DC augmented
concentration have usually been issued rate much
below par such the French three per cents issued at
ssuable only at par From these radical differences in
the two modes Of operation IL must result that the mode
az conversion in Europe could not be the same Thus,
here is little reason expect that could al de