New-York tribune., 1870-01-06
THE IMPENDING FAILURE.

that recorded in Holy Writ of the stiff-necked
children of Israel, when, after having been
miraculously delivered from Egyptian bondage
and then subsisted and protected in their jour
ney through the stony, inhospitable wilderness
till they came out in plain sight of the Prom
ised Land, they turned willfully about and
plunged afresh into the foodess desert, there
to wander and suffer forty years, until the
whole generation that passed marvelously
through the Red Sea had ended this mortal lie
Can it be that this people will prove equally
iDfatuatedf
| We are on the brink of funding our vast
| National Debt at a lower rate of interest
whereby we shall save some Twenty Millions
per annum. Having done this, we may reduce
our taxes very largely, 80 rs to pay no more
on account of our Debt than we now pay for
interest only, and the Twenty Millions per
annum of saving in interest, being employed
as Sinking Fund to pay off principal, will
extinguish our present Debt within fifty years.
But the key of the position is present fndn-
cidl strength. If our Mungens and Brick
Pomeroys are encouraged in preaching Repu-
diatOn-if our Revenue shall be so cut down
that we must suspend the steady reduction of
our Debt-wo shall not be able to fund our
existing and now redeemable obligations in q
COnsOl bearing q lower rate of interest. For
there are Governments enough that want to
borrow and are willing to pay high rates. we
must segregate ourselves from these, and be
found in a very different class, if we wish to
borrow 50 low as or even 4i per cent
The N. y. Times says:
"The plea that, by keeping up the present surplus
and applying 1t to the payment Of unmatured debt the
Government will DO enabled fund the bulk of the re-
uainng debt at lower rate OF interest. OF those who
perssIonty urge this excuse not has condescended
TO explain on what ground the holder OF six per cent
bond may be expected voluntarily to exchange 1t for
four per cent There must be co,npuson of Sort
or the conversion will not DO made"
AnSwer by The Tribune.-We know just one
way to induce the holder of a six per cent
bond to exchange it for one bearing a lower
rate of interest; and that is, by finding some
one else ,0hO iCiH take the ne1 bond and pay cash
for ii ifhe does not. Is there anything difficult
to understand in this9
A. b. owes c. d. $4,000, and wants to have
his loan bear lower rate of interest VIII he
be more likely to succeed by making up poor
mouth, and complaining that he can't reduce
his debt for tho next generation-can barely,
and with difficulty. pay the interest-Or by
calling on his creditor and insisting that he
shall receive part of his due now, and notifying
him that he will be required to accept the rest
within the few succeeding years We appeal
to every mans experience and common sense
Now, the holder of six per cent. bond will
exchange it for four, whenever the maker,
having q right to redeem it, offers him the
choice of his money or bond worth more
1. - 8 Al, c., &
the Treasury can say to every holder of
81 900 Five-Twenty bond, "YOur bond has
now run five years, so that have a right to
"redeem it and l offer you either $1,000 in
"coin OF a new bond selling in the market for
q Tofe-daarter per cent above par" we know
that ninety-nine of every hundred Will take
the new bond rather than the cash. Even
though they should want to use their money
next day, they will take the new bond and
sell it for 81 ,02j rather than take the $1,000
which they are not at liberty to refuse. This
is lust why, and only why, they will Colun-
tnriIv exchange six for four per cent.
-"But how do you secure this exchange by
buying up or paying off our existing DebtW
Just as you secure higher price for your
Wheat, or Beef, or Tobacco, whenever that
commodity grows scarcer in the market Can't
you understand that?
If the public debt of the United States
were but s1OO,OOOOOO, and we were steadily
reducing it by S1OOOO,OOO per annum, we could
fund it all at four per cent tomorrow;
and tho bonds would sell at smart
premium within a year. 1t is the I'M
mense volume of the Dcbt-far exceeding
the natural demand for Government bonds as
a sure investment at a low rate of inter-
est-that keeps down its market value.
Let it be understood that the Debt is to be
steadily reduced, year by year, till it is paid,
or till it is brought within the amount that
will be naturally absorbed by Banks, Savings
Banks, &C., for purposes OF investment, and
every one will know that the market value of
our bonds must rise, and will be eager to buy
and hold them while the appreciation is in
progress.
We do not say that the ive-Twenties can
be now funded at four per cent: we do say
that they very soon could, if it were settled
and understood that we should pay off not less
than 800 ,OOOO 900 per annum of our Debt, ut
least till its aggregate should be reduced to
S., 900, 100000. And that is just what, in our
Judgment should be our infexible policy
Of course, the Democratic JOURNALS clanor
for the remission of taxes. They would do 80
if the taxes were not half what they are.
Nothing would suit them better than con-
fession that we can never pay off our Debt,
unless it were actual Reputation through a
deficiency of means to pay interest We did
not suppose that Republican journals would
echo their cries, but heed rather the manly
utterance of Secretary Boutwell,, who says in
| his Report:
An essential condition to the success OF the proposed
new loan Is the continuance OF the present revenue
system chief by which the present holders OF
Il he