Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1881-01-20
Interview With Mr.. Blaine.

lTdNtlieT CoTTtSpotiutIit--N nat III bt tiit
fate of the refunding bill in the Senate?
Senator Blainc-It will certainly he
amended by removing the 3 per cent. limit
The House is in a reckless mood, the DEM
ocratic side of it especially. and we have
some dHmagogues on our side, but it will not
do to insist on this impossible rate OF in.
terest.
Correspondent-You do not believe then
that the new bonds can be placed at 3 per
cent?
Senator Blaine-No. II seems to me that
people do not stop to consider what per
cent. means. Tho credit of the British gov
ernment stands the highest in the world, and
the London market is the strongest in the
world and vet thes,rtish per cent. consols.
which are interminable, have never yet stood
at par. Why, then, should we expect that
an American } per cent. bond, termnable in
a short term of years, can be placed at par
on the New York market Men talk about
this q per cent. foolishly as though it was
a very little thing, which it is not. Mr.
Chase. it will be remembered, had remark
able success at his issue of skies, and he was
encouraged to think that the credit of the
nation could easily float a new issue at the
lower rate of cent. He tried the expert
ment and broke down for n period the public
credit. 1t is a dangerous thing to sail so
close to wind in this matter of the interest
rate on the public Indebtedness.
Correspondent-You think, however, that
81 per cent. bond would be readily placed?
Handling the Public Debt.
Senator Blainc-Possibly, yes But will
tell you the way look at this whole matter
of handling the public debt. We have got
S6s2, 200, 900 OF Indebtedness 10 provide for.
and we have got very popular bond in the
per cent. bond bond which is taken up not
only readily but eagerly by investors, and
which sells readily at SLIP. Now / dare say
that to place $500, ,000, 900 of them on the
market would have the effect of depressing
them somewhat. | daresay they might go
down to SI10. Now. what does that mean
Why, it means that we can sell 5000, 900, 900
of per cents for $500, 900. 900. and thus
wipe out $50 900, 900 of the public debt as
with stroke of pen. The 10 per cent pre-
MUM gives us $50, ,000,0 600 margin. which
will cancel so much of the debt forever lift
ing it right off the shoulders of the people.
Suppose. on the other hand, that you issue
a 3 per cent. bond and find that you could
only float it at 9j. Then you would have to
issue more bonds to cover the deficiency. and
you have not really loan at 3 per cent at
all. while you have lowered the public credit.
One other thing occurs to me: 1t is posi-
tive hardship on large class to insist upon
the 3 per cent. rates. | refer to the large
class of investors who are compelled as
trustees to invest in government bonds. They
cannot put their money elsewhere, no matter
how low the rate is. The money they hold
is that of the widows and minors, and of
educational and benevolent institutions. 1t
presses upon thcr1 with peculiar hardship
to be forced to accept this per cent rate.
The public credit stands high now, and it is
wisdom to keep it so by giving the treasury a
discretion that will enable it to command
subscriptions readily and sell the bonds at a
premium.