Green-Mountain freeman. [volume] (Montpelier, Vt.) 1844-1884, 1880-02-11
The National Debt.

has shown that it is not the best policy and
the scheme is dangerous to our govern
ment.
Judge Kelly's plan of not refunding at
all is worthy of earnest consideration and
applied only to the five per cent bonds it
may prove the best policy.
Many desire congress to take no action
in regard to the finances. fearing any
change will introduce disturbing element
that will be injurious to the revival of
business.
Measures for refunding part OF the
debt can be taken to the best advantage
before another session OF congress. Now
is the time to inaugurate policy that
shall be of lasting benefit to the republic.
In the refunding scheme Of last year the
old bonds were not past due. and the ex-
pcctation was that they would remain
unchanged. Nor was the new loan forced
UPON the country, but it was taken as the
people demanded There is no provision for
paving interest on bonds due in 1881 after
they mature, and the expectation is that
they will be withdrawn. Values, too in 1879
had declined or become adjusted to n gold
basis and the purchasing power of the
interest at four per cent was equal to the
purchasing power of the interest on the
old bonds. Because the people then were
willing 10 accept reduction of one-third
from high rate of interest it does not
follow that at the dawn of business
awakening as healthy as any we have ever
known that they will be willing to accept
greater reduction from moderate rate.
The saving to the government by the four
per cent issue was much larger than it can
be BY three and onc-half per cent issue
and the risk of failure to float the loan was
not so great.
The four per cent loan was accepted by
the people because it was profitable, but
there would be less competition for less
profitable loan. We have no assurance
that the present premium on bonds will
remain and it is not SO large now but that
they yield an income of three and three
fourths per cent.
Some advocate long time loan at q
low rate of interest even if it has to be
placed ct discount, but discount means
increasing the debt. An increase in any
form is to be dreaded and avoided. Debt
is a curse to individuals and to the state.
rhe mighty conflict of 1851 is not ended
until the country is free from the thraldom
of debt thus incurred. Every age has q
| demand for it sown work When an ex-
penditurc must be made the fewest num-
Der of collections, provided they be within
the ability of the state to readily meet, are
he best, because they have tie least cost
of collecting. The management of a
country's debt shows its strength or weak
| ness.
In the secretary of the treasury's report
for 1867 we find the following:
"Old debts are hard to pay; the longer
| they are continued the harder they be-
come. If the present generation should
throw the burden of this debt upon the
next. it will quite likely be handed down
from one generation 10 another, a perpet-
ual if not constantly increasing burden
upon the people. The debt may
| be paid before the expiration of the present
century. The wisdom of policy which
| H. roo,,lt io ipIioot a1
| in advanced by the history of nations whose
people are burdened with inherited debts,
ind with no prospect of relief for them
selves or their posterity."
The gradual reduction of our debt is in
portant for our country will sooner or
later need all its resources for internal i'm
provements or another great emergency.
Ten years ago our debt was being re-
duced one hundred millions yearly; in
1883 the reduction was only eight and
one-half millions. The nations income is
one hundred millions less than ten years
1ago but the ordinary expenses, outside the
debt, was greater last year than in 1871.
This comes not from internal improve
ments but from lack of true economy.
The expenditures can be kept very nearly
fixed in a government strong in its SIM
plicity. The revenue of our country will
increase with its prosperity as it decreased
with its adversely. The debt was decreased
more in the last six months of 1879 than il
the whole previous fiscal year-more il
the single month of January than in tht
whole year of 1889. By the refunding
loan of 1879 interest is now saved 10 the
amount of over fourteen million dollar
annually and by previous loans, savin!
was made of five million dollars annually
Every reduction in the debt of fifty million
lsaves two millions or over every yea
afterwards of interest although the rapl'
Production in the debt of ten years ago wa
brought about at great cost-the tremen
dous reaction for our extravagane of 107
still this reduction is now an importan
factor in our wonderful recovery.
We note that the average reduction c
the debt for the last ten years. closini
with the year 1889 with reduction c
but eight and one-half millions, was owe
forty-six millions annually. The decreas
for the seven months of the present fisca
year has been 1926, ,015.45, or yer
nearly the average rate for the past. Nc
forgetting then the saving of interes
above noted it is certainly not too high a
estimate 10 expect a further reduction a
the rate of fifty millions annually and
. may be even more rapid.
Whenever a debt is reduced by reason {
sinking funds it is done oftentimes only b
increasing it for the bonds must be bougl
ut premium. A debt maturing at sui
u able intervals is better as ours mature
e unless we make the mistake of refundin
{ it into long time loans.
A thousand millions of our debt rs it
u now outstanding natures within twel'
years and if this were paid, fifty million