The Indiana State sentinel. [volume] (Indianapolis) 1868-1895, 1877-06-27
FINANCES.
Past Present and Future Of the Ones
tion-An Exhaustive Review.
MILWAUKEE, June 10, 1877.


MILWAUKEE, June 10, 1877.
To the Editor of the Sentinel:
SIR-The total debt of the United States in
1868 was more than 50 600, ,0O0, ,0O0 of which
81 I27 600 900 were $40 bonds. The main
question of the nation was. How should the
principal of the $40 bonds be paid? That
question was intimately connected with the
value of the future dollar, and the credit of
the nation depended on the answer. BY the
letter and spirit of the legal tender act those
bonds could be redeemed in greenbacks any
time after five years. Thus S514, $50, 500 in
bonds were due in 1S6T-S; $129, 444, 800 were
due November l, 1869; S1S1, ,427 $50 were due
November L, 1870, and S301, $50, $50 were due
July L, 1S71-all in legal tender notes.
REPUDIATED.
Now the government tacitly repudidted all
obligation to pay any portion OF the princi-
pal of the public debt IN coin, and lenders
took the government at its word by giving
it no more for them than for bonds that were
payable in paper. It was not supposed that
the government woul treat bOndholders
any better than it was bound to by the terms
of the contract. The reputation of coin OBJ
legations was done when $50, 100000 of de-
mand notes of the treasury, and $40 000, 900
of 7-30 treasury notes, issued prior to the
passage of the legal tender act, were paid in
greenbacks. The first issues of legal tender
notes were redeemable in $40 bOnds-those
created by the acts of February 25 1867, July
H. 1862, and March 3, lS63-to the amount
OF S45O,OOO,O 900. But when S600,00O,000 in
7-30 treasury notes were made exchangable
for 20 bonds by the act of March
8, 1865. the government stopped the ex
change of greenbacks for said bonds; $4S3,
$780, 900 of $40 bonds had been so exchanged.
The italics above are mine. They forcibly
describe the game by which the people of
the United States have been blinded by the
1lrara nd SSir he al wa
regarding the conflicting interests OF the
former with the selfish purposes of the latter
in their efforts to increase the value of the
dollars which they gained so cheaply during
and since the late war.
THE BONDED DEBT.
The bonded debt of the United States in
1868 was composed of 81, ,127, ,531, 800 $40
per cent. bonds; $171, 1885, 900 1910 5 per
cent. bonds. redeemable March /, 1874, and
$4,000 900 1040 8 per cent bonds, redeem
able July 1, 1881; $50,000,000 20 year 8 per
cent. loan of February, 1861, and $40, 49,
600 20 year per cent loan of July anu
August, 1861; $4,000. 600 old 20 year per
cent. loan of the Mexican war, and S27 900,
600 old 20 year per cent loan of 1858 and
and 1860 and S139, ,3l5, $50 of three year
7 $40 per cent. bonds OF 1861. These all
amounted to a total of 8, ,625, ,695, $50 bonded
debt of the United States government. De-
Quoting from this total the amount of $40
bonds-S1, ,127 ,531. .S00-there remains $685.
900, 900 of other bonds. showing that the
$50 bonds were more than two-thirds of the
entire bonded debt. But to the amount OF
other bonds must be added $4Ss, ,647 ,425 OF
the 5000, ,O00, 900 Of 7-30 three year bonds, or
treasury notes of 1865, that we're convertible
into 500 bonds at maturity, in July. 1853.
The interest, $40 per cent, being payable
semi-annually, in legal tender notes, the
holder bad the option to exchange or not
for $40 bonds; but the government could
pay them in legal tender notes in 1868 when
they matured, and thereafter, thereby in.
cpeasing the currency, or redeem the 20
bonds already mat lred, amounting to $51S,-
100000. But it did neither The $4Ss, ,647, !.
425 three year $40 treasury notes of 1855
being added to the amount of all the other
bonds. excepting the 500 bonds. sums thus:
Ten-f0rtbS IA VII, ,fO5 o
skies OF os,43l yOU
l-5OS OF Iool.... LOB, sl0-S1
f-Os OF looo...... too,0ff ~
Hence the $40 bonds exceeded all the
Dthers To the amount of $40 727 000