New Orleans Republican. [volume] (New Orleans, La) 1867-1878, 1876-03-14
Tho Fuudiug Of the National Debt.

Amid the din of the Belknsp scandal the
WAYS and Means Committee have been in.
dustri0usly at work on the question of re-
finding the public debt, and Mr.. Fernando
Wood, since his withdrawal from the arena
of political controversy in the House, has
ightened and intelligent acquaintance with
the subject which it is their province to act
upon. 1t will be remembered that the Sec.
Rotary of the Treasury, in his eagerness to
proceed with refunding. has asked Congress
to amend the funding act, so as to allow Of
increasing the amount of four and halt
per cents to $500, ZOO, GOO, and of extending
the duration of the bonds to not less than
thirty years. Bills to this effect were intro
Senate has already passed that body. The
House bill has been referred to the Ways
and Means Committee, where it is likely to
meet with important amendment. Mr..
Wood, in his desire to enlighten the COM
mittee, has shown them that the credit of
the United States government is now on Q
basis of four per cent, and that it would be
folly to proceed with refunding by offering
bond ut higher rate OF interest.
eminent credit has reached this fattering
degree of excellence. Mr.. Wood invited
Mr.. A. s. Hatch, of the firm of Fisk &
Hatch, to address them, and the latter gen.
tleman entertained the committee at two
several sessions with presentation OF facts
which will greatly interest the community
at large. Mr.. Hatch first quoted the United
States currency six per cents as an illustra-
ton of what he wished the committee to
know for the reason that as the principal
and interest of these bonds are payable in
currency, any calculation concerning them
is not complicated with the premium on
gold. Now these bonds are selling at III
per cent. They have an average of nine
teen years tv run. The buyer who buys at
127 per cent receives less than five per cent
on his investment from year to year, and
premium when the government pays of the
bond. The result is that he really gets less
less than four per cent interest for his
money. Yet these bonds are firm in the
market at l27 per cent and in demand for
investment.
Mr.. Hatch then further demonstrated the
fact that the government is on basis of
of the world, by illustrations taken from
the gold -bearing bonds. A gold bond which,
at its market price in gold, will yield four
per cent per annum to the investor in gold
for the time it has to run, is the equivalent
of four per cent bond. principal and in
intarest payable in gold, sold at par in gold.
New five per cents were selling on the fret
of March at about 1919, equal to about lO41s
in gold. As they run only five years, which
is all they have the promise of, they pay
only tour per cent. The skies of 1881, or
''long skies, as they are called, were selling
on the same day at 1881, which is little
over lO8 in gold. With only five years to
run, they pay even less than four per cent.
Going over to London we find the 1865,
which have no time at all to run, selling at
108; in the same market the skies of 1881
are selling at lO913. At 100 they would pay
only four per cent. The new tives in Lon
don are worth 1861, with only five years to
run. These bonds, if they had even as long
as eight years to run, would only pay four
per cent at 1864. For these reasons the
committee have been urged to consider
whether it would not be well to give up the
notion of issuing anything over a four per
cent bond, which latter security could be
made marketable at once, were it allowed
to run forty or fifty years. The difference
between four and four and half per cent
on $500 1000, 900 in thirty years would be- a
saving Of $75,OOO,0OO. If we should have
to wait two years to sell tour per cent
100000.
These arguments have brought the COM
mittee to believe that there ought to be no
precipitate effort to refund the public debt
until the facts cited have been considered
anu OlgeSCeO. OnOuIO MT. BrlstOW wish to
keep the funding operation going on Congress
might allow ths negotiation Of $4,000, 900
or 5000 ,OOO,O 900 Of four per cents, and by the
time these were disposed of the ability of
the government TO fund at four per cent
would be still more clearly demonstrated.
1t Is thought that the Secretary of the
Treasury is in receipt of an offer from the
syndicate to take SIS, 100000 or $50, 100000
with the usual option ON large portion of
the remainder of the proposed thirty year
four and half per cent bonds, and hence
the urgency he has shown before tue com.
mlttee to nave the bill passed Washing
TIM Correspondence Ne,e York HerulS
March 10.