New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1875-07-10
RAD FAITH OF STATES.
,vrrpR FROM Ex-sECRETARY McCUILOCH.

SIR: Nothing in our history, or perhaps IN the MS
tory OF any country has ever, to 50 great degree.
surprised the military men and the statesmen Vi
Vrrope as the manner in which our great army was
S,sbandcd at the close Of the late civil war Noun
ING certainly, has, TO such an extent commanded
che admiration of her fnanciers as the commence
80, aud nersistent reduction of National Debt.
That nearly million of men, largo part oil whom
ri b.en long enough in the field to acquire love
g ,o;l;,orv life should. when their work had been
s;bod % hack TO their homes willingly, peaceaby,
;,hout single instance of violence or disturbance
60 ,esnme their former occupations; that natlon
impovcrished-for think We nave now c""o 10
rcalizing sense of the fact that two-thHdS Oh 'no
C,,o could NOT for four years, be engaged IN sub
dining and devastating the other third, without
ha;pg impoverished, no matter what stimulus ,ho
war might have given to many branches I" ihu"S'is,
or what apparent prosperity might have Oeeh cre'eu
by redundant currency-that natoh hhp''o'
;shed by one of the sevcrest, boodcst and most eX
pensiye contests that has ever been waeeu,
sbonld almost before the smoke had been hlten
from the battlefield begin the payment OF It's
debt are facts that have excited IA nave said' the
enthusiasm and commanded the admiration oil mil
tary men. statesmen, and fnancers throughout Eu-
rope Do not these facts indicate the excellence Oh
renubcan institutions, and the power. the upright
ness and the practical good sense of sef-governed
peoplef What will the great Republic DO WIN It's
army now that the Rebellion has been subdueu
What will people every man OF whom Is No'oi'
do with their vast debt, when the question oil TAXA
t;on for its pa,.ment has To he calmly consideredf
were questions which one might have heard asked
tauntincly bv our enemies, dOubtfully by our
friends-in military, political. and financial Eu-
ropesn circles in the Spring Of 1865. One OF these
Questions has been definitely answered; the other IL
in a fair way of being so. The army of the United
States is now police force, sufficient merely Tor inc
protection of the frontier settlements against the
scattered Indian tribes which still have a precaiious
existence in the Western Terrtorcs-a police force
scarcely more numerous or expensive thah tha' Oh
the single City of London. The debt-three thou
sapd millions of dollars in lSG5-will virtually dis
appear with the present century. The nOn-cxStence
of a standing army in the United States makes il0-
ersl-minded men everywhere hopeful Ill regard to
the capacity of for government, ana causes
millions in Europe to look across the sea" lot "a
refuge against subsection to military duty; while
the steady reduction of the National Debt gives i'll
vestors confidence in the National integrity
THE STIGMA OF REPUTATION.
The question then arises, II Nv happens il that the
National credit is not higher than it isl Why is 1t
not as it ought to be- higher than that of any other
1atonf
answer it is mainly because the States have not
kept faith with their crtullOlS INC loSs'o "HiVh'
within the last two years, have been sustained by
European investors through the failure of railroad
companies in the United States have been enormous
and distressing and private companies fail on this
side the Atlantic as well on the other So far do
not understand that any of our private companies
have attempted to repudiate their debts. If they
had the disposition to do so they could not. They
can be reached through the courts and there has
been no lack of fidelity the part of our judges in
holding corporations to their engagements 1t not
oorpordtions but States, which lie under the stigma
of repudiation. The flilure of railroad companies il
undoubtedly what Just now, most severely troubles
investors and prevents the of all loans except
those which are offered by well known and dividend
paying corporations; but such failures create in the
minds of far-secing and thoughtful distr,Ist
of American credit comparable with that which is
created by the bad faith of sovereign States
Europeans especially Engshmen, deal literally
with insolvency. There is no country in the world
in which an honest insovent debtor finds less diff
fculty in arranging his debts than in England.
His creditors ask only that he shall pay what he can,
and this having been done, lie start again,
Ieyed of his burdens. Engshmen tolerant of
Insolvency but there no words i'll their language
strong enough to express their dctcstation of rudi-
alton 1t Is the repudiation absolute partial, by
many of the States which casts a dark shadow over
American credit and conpels the Government to
pay six per cent interest instead of four OH large
portion of its debt. Fortunately the number of
those who hold bonds of States which have not kept
faith with their creditors is not in Europe very large,
but it is large enough to diminish seriously the de-
mand for the bonds of the Government. majority
of European investors have entire faith IN the neg-
rity of the United States as a nation. They know
what the Federal Government has done in times
past They know that in the darkest days OF the
war; and just at its close, when the debt seemed
overwhelming, it paid i'll coin large amounts of
bonds which had maured, although the temptation
TO extend them was difficult to be resisted, and they
doubt not that a credit which has been maintained
under circumstances the most ying will be main
tanned TO the end If to the investors who have this
faith in the Government could be added those who
are suffering by being holders of bonds of States
which arc wholly or partially i'll default, and who in
consequence turn their backs upon everything
American, and those who judge the nation by its
componcnts, competition among buyers would be
largely increased funding would not anguish as it
now does, and the burden of the debt, by reduc-
ton Of interest, would be speedily diminished.
LESsENINC; THE VALUE or OBLIGATIONS.
That many of the States in their dealings with
their creditors have behaved badly is undeniable.
Let us look at their action from the European point
of view. We an isolated people With the ex-
ceptIon of Canada, which has little influence over
us, we have no neghbors, and consequently we do
not feel the influences which nations in close prox-
unity exert upon one another. We have not us fully
realized the weight Of the obligations that rest upon
Americans citizens of States as we have those
which rest upon them as citizens of the great Re
public We have not carefully considered what must
be the effect upon the Europe mind Of the failure
of States TO meet their engagements.
A State more impair by Legislation the
ntrf