, 1875-03-11


Secretary Of the Treasury is about to Issue
call for tho surrender Of $I0 00o0, 900 of 6.20
bonds, tho same to bo redeemed on nccount
Of tho sinking fund Whether the 95,000,-
600 of such bonds called in under dnte Of
March Ia part OF tho whole sum, We do not
know. We think this redemption Of tho pub
lie debt for the purpose OF continuing it in
tho form Of a.Rinking fund is rnther ques-
tionab1e policy. The United States had, up
to July. 1874, purchased Sl41 100000 Of
bonds for tho sinking fund. But this pur-
cllaso has not been Of my relief to
tho public. The interest on all this
sum of bonds ia collected seuli-n,,n1t-
ally Just the same M II tho principal
l.ad not been paid. Tho burden Of debt il
In the nnnual interest thereon; to consider
the debt reduced by The amount Of these
bonds purchased is practical absurdity, 80
long as tho interest Ia required to bo paid
Just tho Ra1ue. This annual interest, to-
gother with direct employment Of gold equal
10 per cont Of tho total debt, is used to pur-
chase ,noro bonds, and thus 1t goes on. With
this thirty millions of dollars added to the
sinking fund, the annual amount Of interest
collected Of tho people OH the "rnid debt
will be IN excess Of ton millions Of dollars,
| being one-tentl OF tho charge for interest on
the whole public debt. Tho thirty millions
Of this year will be thirty.fo millions next
year, and with almost arithinetical progress
aion tue direct tax upon the country to
pay the debt Is made M in.olerable burden.
Tho Secretary Of the Treasury inslsta that
] this annunl purchase of nh ever-increasing
amount OF tho principal Of the public debt ID
essential to maintaining tho public credit
This theory Is exploded by the fnct that tue
Government Inns redeemed over $l5o, GOO, 900
Of tho bonded debt In excess Of what ia ro~
qufred for the sinking fund. Wo think tho
theory unsound, because It Ia opposed to tho
experience Of all othor countries, md to tho
natural lnws Of national credit. III tho first
place, II destroys the market value OF tho na~
tional bonds by introducing the o1onent of
uncertainty into tllc Investment. A 40-year
bond bearing psr cont IL moro valuable as
IN Investment than a 5-year bond loaring d
or oven = per cent. aud, when n
bond Ia 1iablo to DO called in at
any moment 1t loscs Its value aa
at investment beyond its par valuo or mere
iutrinBio worth ~ an evidence Of slobt. Thoro
is now but difference Of 2 cents iu the
dollar in tho currency value Of the 5.so
per cent bonds Of '03 antl the aew Il poi
cent bonds. The former aro subject to coll
| at my moment They nrs not sought for III
an Investment, and have 10 narlet In Other
| countries. II the Secretary Of tho Treasur,
would put on tho market. 4o-year boni
bearing per cont, to be exchanged at pa
for au the q por cents outstanding, 1t IL NOR
than liasIy lla would find quick market fol
them. Such bon.1a would have the cEarao
ter Of per.llsneuey which does not attach II
any part Of the debt. Even tie nsw l. POI
: cont bonds may be called In by the Score
tary as early o. 1881. They are the onl.
, uatioul bouds now outstanding that ,na,
, not bo callod In at amy time. The who'll
, bonded debt, therefore, IL Of tha character o
. temporary loan, subject to payment q
9 three months notice, and Is TOR that xeaso
. less desirable ~ III Investment, both at HON
t aud abroad, than bonds at It's sate OF IN
o terest and having q longer tlns to run. TIL
/. uubuo credit IL not to be maintained by
n sort of duplicate payment through tho mi
+ chinery Of sinking fund, but by talin
= from &ha national band4 thak tAnposas