National Republican. (Washington City (D.C.)) 1872-1888, 1875-03-17
THE SINKING FUND POLICY.

The Chicago Tribune Of the 18th inst.
devotes an article to 1.-The sinking fund
policy" which contains much good sense
and very plausible reasoning. 1t argues
that when the Government purchases its
own bonds at a premium 1t thereby de-
creases It's Indebtedness and that common
prudence and thrift as well as good credit
would and should be perfectly satisfied with
this and the destruction of the bonds re
deemed, and not require that they be
slowed away in some remote corner OF the
Treasury vaults as belonging to an imagi-
nary fund for whose benefit the interest
must still be annually and regularly paid.
We are inclined to think the argument is
correct, and that this sinking fund arrange
ment is year by year growing to be larger
burden than we as people should be called
upon just now to bear. But these argu-
ments should have been made during the
session of Congress that had the power to
modify the sinking fund law.
The policy of which the Tribune speaks
is one of Congressional enactment. Secre-
tary Bristow, following the policy an
nounced by the President in his first
message of the rigid enforcement
of laws as the best test of
their utility, and as the best and
surest way to procure their modification if
they are imperfect or bad, conceives it to
be his duty to carry out the provisions of
the sinking fund law. Mr.. Boutwell, cher
ished the same idea; so also has President
Grant; but President johnson and Secre-
tary McCulloch in their days of admins
tration either considered it unwise, or i'm
polite, or impossible, or even, perhaps,
all three combined, and, consequently did
not inaugurate the sinking fund at all.
Congress suffered the statute to remain
upon the books a dead letter for years
without repeal or modification. General
Grant finding the law there determined to
execute it if possible. Seconded by his
various financial ministers, and by Con-
gress, he has thus far succeeded. If Con
gress had been of the opinion that the full
execution of the law was entailing too
great burden upon the people it should
have modified the law by authorizing the
destruction of bonds when purchased, and
providing instead of a sinking fund for the
simple reduction of the bonded debt by
certain fixed per centum per annum.
The Tribune speaks as though the matter
of a change of policy in this regard was
optional with the Secretary of the Treasury.
The Secretary does not so consider the law.
He feels bound to carry out the contract
with the bondholders in the language of
the law unless that law is modified by
proper authority. 1t is also question in
many minds whether Congress could in
honor modify the sinking. fund policy pre-
vious 10 the maturity Of the loan to which
its provisions were intended to apply. We
are all aware Of the powerful effect which
the establishment Of the sinking fund ex-
erted in the placing and appreciation Of our
bonds. The question now comes home 10
us whether VIC Can consistently modify the
terms Of the contract or the proposals upon
which our faith was purchased. It Is one
Of much gravity, and our best men and
wiSest counSelors are Of the opinion that we
shall do wisely TO 60 on refundlng our debt
until we have retired all those bonds 10
which the sinking fund act applies. With
such q credit as we shall then have, II will
be practicable 70 refund our entire debt Into
q consolidated low. rate bond which loan,
divided into small denominations, will be
absorbed by our own people for the safe In.
vestmentsof their small savings.