The New York herald., 1870-01-13

practical consequences we shall be encouraged IN
this course. The refundlng OF the sixes VI 1867,
being upward Of nve hundred millions, INTO nves, AS
authorized by the first section OF the bull contem-
plates the payment from present funds OF lttle more
than fourteen millions, being the excess OF nve-
twentles above the nve hundred millions pro-
vded for. the annual reduction OF interest on
that loan will be $5,6S6,275 The substitution
OF three hundred millions OF fours for q like
amount OF sxes AZ provided IA the 0il VIII operate
further @ saving Of 5000, 600, making sum total
OF $ Ss6,2l6 or near $l2, 600 000 There Will tnen
remain but $l29443 500 subject 70 redemption. being
nve,twentieths OF 1904. During the year 1870 the
Iurtner sum OF $536, 832, ZOO being nvetwenties VI
1865 VIII fail within the control or the government,
when as II seems to me- and according TO the con.
temptation OF the bi the credit Of the government
VIII be at such pitch that $780, 900 can be re-
funded IN Tour and hal per cents, with the addl-
tlon OF 900 paid into the Treasurythus nsur
ing lurther annual reduction of s9,709.9 932 or
total annual saving Of s2l, 596 ,2os, Of which
about $l200o,000 may be saved daring the
current year. Hero for the present we stop Our
interest paying debt cannot be further ameiorated
before 1872 when 379 000 900, being 1vetwentles Of
1861 WIN become redeemable ana then in 1873.
when AZ 900, being hiteentwenties OF 1868 and
constituting the balance Of optional skies, will
become redeemaDle, all OF which l gladly believe
may be refunded in the four per cents provided by
the present bill, to be followed IN 1874 by reduc-
tiOn OF the original en-fortes into similar bonds.
would remark here that the bill undertakes TO deal
with the whole dlsposa6le national debt. The
amounts which have given will be found in the
treasury tables OF January last and are irrespec-
S From these details pass to consider tRe bill in It's
aims and principles The proposition with which
begin is TO refund our six per cent vetwentles OF
Into five per cent ten-forues. In taking the term
ten-fDrtieS l adopt the description Of o bond well
ana "a AZ Gna se
original act authorizing the issue. The bond begins
with good name which VIII commend II. The In
terest which propose Is larger than would pro-
pose for any late bond. 1t Is important, not neces-
sary, In order 70 counteract the suspicion which has
been allowed 10 iall upon our national credit.
Even below turQpp.
But they VIII upquestonaoy snare the elevation OF
the new hves bubslited. Our FIRST attempt should
be with the latter Let these be carried par and
we shall have par everywhere. In this process the
first stage the conviction that all bonds Will be
paid in the universal money OF the world All bonds,
whether lives or skies, win then advance. know
no way In which tnis CONVICTION can be created 30
promptly ana easily as by redeeming In gold
most naturally selected IL the drst, which is
already SO noted from the discussion to which II
has been subjected. But this can be done only
by Offering TO holders the option o. coiu or salts
factory substitute bond. With O new issue OF nve
per cent ten.forties limited In amount to about the
say nye hundred mLlions-I cannot doubt that every
foreign holder OF such skies will accept the lves in
home may be paid in coin, II preferred by the hold
ers from the proceeds Of an equal amount Of lives
placed In Europe at par for com. Then WIN follow
the advantage OF thus positive policy. The national
credit VIII be beyond question. Nobody will doubt
IT, The public faith will be vndicated. The time Will
have come, which Ia the condition precedent named
by the Secretary Of the Treasury, when the want Of
laith IN the government Will be removed ana the
door win be open to cheap loans. This win be, OF
course. lJ cannot be otherwise II we only do our
duty. Our hves, being limited IN amount, after
being taken at Par In preference to COIN Will advance
IN value 80 that the investment Will become popular
People win desire more, but there VIII be no more
so that without difficulty delay may hope to re-
fnnd five hundred millions OF our subsequent skies,
Or so much as may be desirable ct four and half
per cent In fifteen lfes II not, at four per cent In
twenty-sixfes. In this operation the initial point
the national credit. With tnis starting point all IL
par
while market is opened for four aud q half or four
per cents. Tue stigma OF reputation, whether
breathed in doubt or hurled in tauni, viii be
senced. There are other fields OF glory than IN
war, and such triumph will be among the most I'M
portant In the annals OF finance. But TO this end
thcre must be no hesitation. Inc orer must be plan
"bonds or coin,n giving thcs world assurance
OF our determination. rho answer will be as
prompt as the offer, "bonds and not conn.,
In the process Of financial reconstruction we
cannot forget the national banks, which have
already done SO mucn The uniform currency
which they supply throughout the country com
mends them to our care. Accustomed to the facl-
ties this currency supplies, 1t s difficult TO under
system, when every bank had Its separate currency,
taking It's color, like the chameleon, from what was
aooutlt, 80 tnat there were as many currencles,
with as many colors, as there were banks. Two
things must be done for the national banks:
first, the bonds deposited by them VITA the
and, secondly, the system must be extended
as 10 supply the mucneeded Iacllites especially
at the West and South. | doubt II the national
banks expect to In the future more thar
four per cent from the bonds deposited by them
With the government, nnd considering the profits
attributed 10 their business, 1t may be that the.
would be reluctant consent even to this allowance
Here 1t must be observed that the whole system o.
national banks Is founded upon the bonds OF the
nation, so that at the rate OF liquidation adopted
Tor The national debt the system Will be without sup
port in the lapse OF twelve or fifteen years. The stab
y OF the banks which Is vital alike to the national
currency and TO the pccunary interests involved III
the business can be assured only by an issue OF
bonds for longer term. or course the longer the
nnrIOd the yaluabie the bond. tn
interest arbitrarily on the existing short bonds Oi
the banks without Offering compensation In some
form would be positively UNJUST, besides being an
infringement OF the guarantees surrounding sucn
bonds, and, therefore, violation or good faith. A
substitute twenty-sixty bond Will be assurance oil
STABILITY for thls length OF tune, while the addisonai
life OF the bond Will be compensation Tor the
reduction OF interest. As 1t IS not proposed
TO issue such bonds Immediately except for
banking purposes they VIII not fall below par anu
this par VIII be coin, which, need not say the skies
now held by the banks will not command. II
through the failure or winding up OF any bank an
amount OF the substituted bonds should be liberated
there Will be instant demand for them at par by
new banks arising to secure the Tenqulshed clrcu
lation.
Allow me here to interpose brief word on the
difference IN value between long bond and short
bond. Obviously the short bona viii be liquIdated
at an early day, so that any premium, while
increasing the capital invested lessons the
percentage OF income. Thus $1,000 III q sX
per cent bond, with premium OF twenty pei
cent, VIII cost .sl,2oo with an income Of sxt,
dollars oniy five per cent, and the bond IL paid
at par, would involve loss OF the premium Bnl
the same $1,000 invested IN lives VIII be represented
by $1,000 In bonds, yielding annually sixty DOLLARS
or five per cent, with this constant advantage That
when PAID at par the investor would nnd his origi-
nal capital intact. Therefore, 1t cannot be expected
when the nves are brought to par that the short
slxes soon to be paid at par Will nave value pro-
portoned TO their higher interest. IL WIN be with
them as with other things in this world
where value Is diminished by the brevity Of ex.
istence. The extension OF bank notes from three
to five hundred millions, which l propose, VII
extend the banking system where 1t is now
needed. This alone is much. How long the Senate
debated TINS question at the last session without
any practical result cannot be forgotten. That de-
pate certines to the necessity OF this extension
The proposition offer shows how 1t may be &C
compishedaand made especially benchcient. The
requirement from all the banks ofnew four per cent
bonds at the rate OF one hundred dollars for eighty
dollars OF notes issued and to issued would Absorb
six hundred ana twenty-five millions OF the nationai
debt into four per cents while the withdrawal, OF
one dollar OF greenbacks for each additional dollar
or notes Will go far to eXtnguish the outstanding
greenbacks, thus quietly and without any apprecabl(
contraction removing an impedlment to specie pay
ments. Naturally, as by process OF CESSATION, vii
this birth be accomplished 1t Will come. aud no.
body can prevent il.
THE FORT SMELLING RESERVATION.
Mr.. WILSON, lrep.) OF Mass, from the Military
ttraa ALL "a tn, asft