The evening telegraph. [volume] (Philadelphia [Pa.]) 1864-1918, 1870-06-09
THE TAX BILL AND FINANCIAL CUES
TIONS BEFORE CONGRESS.
Fron The N: Y. Herald.

THE TAN BILL AND FINANCIAL CUES
TIONS BEFORE CONGRESS.
From the NJ Y. Herald.
At last Congress has begun to work earn
esty at the different measures relating to
taxation, funding the national debt, the cur
rency, and other money questions. One or
the other of these questions is up every day
and pretty fully discussed. Still they are in
such state of chaos, there is such wide
difference of opinion about them, and the
two houses have for the most part such sepa-
rate and conflicting bills, that we cannot yet
see what shape legislation will ultimately
take. great part of the session has been
wasted on these measures. There is not time
now for any such comprehensive legislation
on them as the country needs, and there does
not appear to be the statesmanlike ability in
Congress for that. We must be contented,
therefore, with the best that we can get
The Funding bill reported by General
Schenck from the Committee of Ways and
Means differs from the Senate bill, and has
been good deal modified since it was first
introduced and went to the committee. 1t
provides for funding thousand millions of
the debt at the uniform rate of four per cent
interest The new bonds or consols will
have thirty years to run, and it is believed by
Mr. Schenck that the holders of the five
twenties and capitalists will be willing TO ex-
change their securities or to purchase the
new ones at par. It is thought that the diff
ference in interest between the expiring or
short-time six per cents and the new four
per cents will find q compensation in the in
creased value of the thirty-year bonds. Then,
with view to bring them to par value, it is
proposed to exempt the new securities from
all taxation, and to cease paying interest on
the old securities as they become due, unless
the holders surrender them to the Government
at their par value. 1t has to be seen how far
the holders of the five-twenties will volunta-
rily change them for the thirty-year bonds.
The reduction of one-third the interest makes
q great difference. But as the ive-twenties fall
due the holders of them will be compelled
either to take the new four per cents or pay
ment in money for their bonds at par value.
This is perfectly fair on the part of the Gov
ernment, and, indeed, liberal, considering
that the bonds, which did not cost over fifty
or sixty per cent. in currency, are to be re-
deemed in gold. 1t is questionable however,
as was said before, if the bondholders will
take the four per cents at par, and in that
case there is reason to fear the Government
will not be able to find the gold to redeem
such vast amount of securities. Would it
not have been better, as the Committee of
Ways and Means have gone so far in pro-
posing to reduce the interest, to have adopted
the more simple plan of changing the whole
debt into consols bearing 3'65 per cent. in
terest, and to have made them convertible
into money and reconvertible at the option
of the holder?
Some of the other features of the Funding
bill are good enough. Authorizing the Secre-
tary of the Treasury to use the gold in his
vaults to buy up and cancel the six per cent.
debt, and providing for the cancellation of
the debt already purchased, are proper provi-
sions. 1t is doubtful, however, if the clause
constituting the Treasury sort of gigantic
bank of deposit is either sound in theory or
can be practically carried out. This would
make the Treasury Department what it was
never intended to be, would complicate its
business very much, and would be doubtful
and dangerous experiment. Then, how is it
that nothing is said about the national banks
being required to take the new four per cent.
securities in this bill? 1t was proposed that
these institutions should be compelled to
take the new bonds to deposit as security for
their circulation. This would absorb three
hundred millions of them, at least Why are
the banks thus favored? Have the national
bank interests and lobby proved more power
full than the Committee of Ways and Means
or than Congress? The whole interest on the
securities deposited by the banks is clear
profit and clear gift from the Government;
for they get the profits on the currency sup
piled by the Government, and surely they
rate of interest.
The bill reducing taxation, which was
fought so desperately by the high tariff men,
is one of the best measures of the session.
But it has yet to run the gauntlet of the
Senate The reduction is on many articles of
prime necessity and to the estimated amount
of about fifty millions a year. There might
have been a greater reduction of taxes; for
the revenue of the country would have borne
that, and a large surplus income only leads to
extravaganza and corruption; but this is a
step in the right direction. There is no time
now to remodel at the present session our
tax and revenue system, and we may be
thankful for the best we can get. Still the
whole system is complicated and far too
costly. We ought to raise sufficient income
from a few articles of luxury and general
consumption, as England does, and this
would reduce the army of office-holders
and the cost of collection. One of the
best propositions that has been made in Con-
gress on financial and currency matters was
that of Mr.. Randall on Tuesday to issue legal
tender notes in place of the national bank
currency This would save eighteen millions
in gold year to the Treasury and give the
country uniform and perfectly reliable cir
culating medium. But whatever Congress is
going to do with regard to these various
measures relative to the taxation, finances,
and currency of the country should be done
at once. While they are pending business is
suspended to great extent. People are un-
willing to do anything while the future is
uncertain. Let us have some decision soon,
SO that trade, commerce, and business gene
rally may follow their usual course, and that
the people may know what lies before them.
SOUTHERN LITERATURE.
KraA,a he