The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1874-02-18
Description
OF
Securities.

=. O. Io-4o oCnds per cent, gold. Az per cent.
u D new FUNDED 5s. per cent, gold. Az per cent.
Mass. e's lss4'..: rs per cent gold I4k per cent.
change and there quoted Interest Allowance mus
a' Dollar lar ' Ssns
garded As equal to 4s Cd
1t will be observed that, while the United
States government is practically borrowing
money on its ive-twenty bonds at five and
one-sixth per cent, it is able to borrow on its
other securities at four and q half per cent,
and that the State of Massachusetts is able to
borrow at four and third per cent. These
phenomena cannot be explained on the absurd
hypothesis that the credit of Massachusetts is
better than that OF the United States, which
embraces Massachusetts, and whose revenues,
federal, State, county and municipal, amount
annually to so great sum as nearly one-halt
of its entire debt Such an hypothesis does
not account for the fact that, while the federal
government is borrowing money at five and
one-sixth per cent on one class of its own OBJ
legations, it, at the same time, is able to borrow
at four and one-half per cent on other classes
of the same Obligations.
The enigma is only to be solved by reference
to the redeemable period of the several secu-
rites above tabulated. The fve-twenties are
redeemable now, while the currency skies are
not due for twenty-five years. The ten-for-
ties are legally redeemable now; but prac-
tically, are certain to stand 80 long as any
able legally until ten years after their ISSUE
which began in 1871, and practically have
the same longevity, and for the same reason
as the other fves. The Massachusetts, fves
are not redeemable until 1894 These facts
illustrate the whole principle in nutshell.
With a given security the more remote the
maturity of the bond the lower the rate of in
terest at which it can be foated at par; and
this is the principle proposed to be made use
of in economizing the interest charge upon
our national debt.
This plan-that is, tho perpetual annuity
plan, to which the one we propose is practi-
cally similar in result-neither claims the
merit Of nor stands exposed to, the suspicion
which should always attach to novelty. It
was that by which, under the Ministry of Mr.
Pelham, all that portion Of the national debt
of Great Britain bearing interest at four per
cent-to wit, EST, 1884 was funded at
three per cent. Its author was Sir
John Barnard, a determined opponent
of the Ministry, but a we'll informed
and patriotic citizen. He had originally
offered it for the consideration of the govern
ment in 1887; but coming from such source
it was regarded as both reasonable and dan
gerous. Twelve years elapsed, during which
interval destructive and expensive war
which, it was seen, might have been
avoided had this plan been sooner enter
tanned At length, after the Treaty of Aix-la-
Chapelle, it was entrusted to the management
of its author, who, in carrying it into success
full execution, completed what has since
always been regarded as the grandest and
boldest operation known in the history Of
finance.
If with this great measure Of finance by
which it is proposed with single stroke of
he pen to throw off thirty million dollars
per annum from the heavy fiscal burdens
hat now shackle our national energies, is
,ontrasted any of the plans hitherto SUBJ
nitted to the Treasury, either in Con-
,ress or elsewhere, observe how they
Ill dwindle to the proportions of
mere jobs or fade into the shadowy
realm of fools dreams. The Funding act of
1870, which is the only measure of the sort
hat has yet been tried, provided for the con-
version of all the outstanding fve-twenties
INTO five, four and half and four per cents
For this purpose it appropriated several mill
op dollars of public money. Nearly three
years have elapsed, the appropriations have
gone into the pockets of q syndicate of
bankers, and all that has been effected is the
of some two or three hundred mill
ions of SKIES into fves. Not q single four or
four and half has been hoated This was
The pet scheme of Messrs. Boutwell, and
Sherman. Another one is that of MI. D. 81.
London, now under the consideration of a
committee, providing for
The establishment and patronage by gov
eminent Of colossal private bank to be
,alled the Exchequer-as palpable job as
he other Still another is the idiotic pro-
oosal which advocates the re-enactment of
John Laws absurd idea of interconvertible
bond and currency notes, which so nearly
'uined France under the Regency. But the
name of these projects is Legion. What the
,xigency of affairs demands is neither jobbery
Tor ignorant experiments in the management
If the public debt, but such skilful and well
approved administration as will result in con-
erving the national credit and turning it to
he best account for the people, and these are
he ends which the plan herein recommended
Gems best calculated to promote.
The INDIAN WAR CLOUD. reported
burning of Red Willow is contradicted, but
he war ciOud seama IN fbraotap 70 braoL