, 1876-04-22
Eonr Per Cent. Interest.


all ,he industries of the country. That cla.s
| OF politicians who masquerade "a retor!ners
are loud and obs,reperous in protesting q
/ wish to aileyiats the burden OF taxation, and
| il their methods were IS wise q. their pro-
fessiors are noisy they would deserve com
mendation- They have hit the real tone Of
public feeling in their clamors for lower
taxes, for there is nothing which the people
so earnestly demand Bat tie small eeoao-
mics they propose in the expenses Of the West
Point cadets &nd curtailment Of the salaries
of public officers would bring 30 little relief
that they are hardly worth considering,
while Congress neglects so obvions and prac-
ticab!e & measure as reducing the enormous
interest on the national debt.
We are still paying six per cent. interest
on the greater part of public debt. while
Great Britain pays only three per cent. upon
hers. 1t is discredi'abIe TO those who control
our affairs that in he eleventh year after the
close Of the war we are still paying wsr rates
for The use Of the money. The possibility Ct
borrowing .. four and a half per cent. Is Of
fcially rccoguized by the secretary of the
treasury, who does not doubt that be could
refund the fve-twenty skies at that rate If
Congress would give him authority TO issue
long bonds. We believe that the whole debt
could be refunded at four pr ceut. with
proper legislation and skillful administra-
tiun OF finances. This belief is founded on
the fact that men are now Luying govern
ment bonds at such prices as they only get
four per cent. for their money. At the
Stock Exchange the price for United States
five per cent. bonds, redeemabie in 1891, was
IL, the price Of gold beins a shade less than
1l3. Now, supPoSing the currency TO re-
main in the same state as at present for the
ensuing five years, the government in re-
deeming these bonds in 1881 would pay the
| equivalent of - in currency-that Is 10 say
it would pay 100 in gold, which Is the same
as ll3 in currency. The present buyers at
I us would therefore lose FIVE cents IN five
! years, or one cent a year on each dollar Of
the investment. Deducting this one cent
! from the five per cent. interest on the bonds
il is plain that tie net interest On the in"est-
meut would be only four per cent. As peo-
pie are found willing to Purohese bonds re-
deemable in so short period as five years at
price which barely reimburses the priuci-
pal with four per cent. there onght to be DO
difficulty in dispo,ing of bonds having forty
! years TO run at the same rate. We are.
therefore, justified in assuming that the
national debt nigh: be refunded at four per
! cent. if We had able statesmen and fnanciers
Il. tie lcad ot aflirs.
! The saving Of interest would he sufficient
to dcfray the whole civil expenses Of the gov
| eminent BY he las, debt statement, published
the first of the month, it appears thaJ the
! pnblo debt barring interest IL coin amounts
! 10 81, ,795, O37 go on Yhirh the interest at
four per cent. would be $6., 600, 600. The
secretary OK the treasury, in his last animal
report, estimated the interest payable in the
fiscal year ending June 30, 1877, at $97,-
600, 600, so that If we could reduce the rate
on the whole interest bearing debt 10 four
per cent. there would be au annual saving Of
$50, ,OOO,OO0.
There are various reasons why a govern
ment in good credit is able 10 borrow money
considerably below the ordinary market
rates. Cuusols OF government bonds com
bine the advantages Of productive fzed prop
eriy and ready money. Property in real
estate. ships or factories cannot b. suddenly
converted into money without great sacri-
fees, hat there is seldom any difficulty in
| eony er,ing government bonds at their mar
ket value. The man who has government
| bonds locked up in his safe finds them as
! good as money in an emergency, and yet,
unlike money thus locked M, they never
cease to draw Interest II large sums are
wanted bonds are easily convertible into cash;
! if small sums are wanted the bou5s are Tn
failing colIatterals on which money can
always be borrowed in any ordinary state OF
the market. So convenient q form of prep
erty need not bear high rate OF interest to
make 1t eagerly sought. Another reason
Why interest on government bonds need not
| be high Is their exemption from State and
/ municipal taxation. O,her property pays an
average Of about Two per cent. in local taxes,
and in his city about three per cent y per
son here, who lends money oa mortgage st
seven per cent. and pays three per cent ssxes
/ on his mortgages, realizes only four per cent.
net On his investment. and mortgages are
/ inferior to government bonds IN ready con
verribility into money and as a collateral Sc
curiiv for losns.-N Y Herald,