The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1894-07-28
During TyIer's Administration
We Couldn't Borrow at All.
What Would Carlisle Have Done
Then, Poor Thing.
VERY BAD IN 1864.
Some Consolation That Our
Fathers Had a Hard Time.


never was SO hard to get, and that there
never was such 4 complication of indus
trial and financial troubles since the fOuD-
dation of the world. 1t is therefore great
consolation I o turn back the pages Of his
tory and learn how wretched our fathers
and Crandfathers were and incidentally
how very mean some Of them were and
how foolish most of the others Know,
then, innocent friend, that there have
been many worse years than this; that
money has often been much harder to get,
and that, as to strikes and riots, 1894 is
but q sideshOw compared with 1877 Know
also that all our secretaries of the treas
ury have boon fairly good men and some
Of them remarkably able flnanciers, such
as Hamilton, Gallatin, Walker, Guthrie,
Chase. NIcCulloch, sherman and Man
ming, not to mention Carlisle, who is still
with Us ana not to be praised like the first
named until he is as dead as they arc
Credit at a Low Ebb.
The lowest point ever reached by the
credit OF the United States was in John
Tylers administration in 1912, when
the government could not borrow at all at
anv rate Of interest. Treasury notes were
issued and even congressman had to take
their pay in them Senator Benton had
one of these notes protested in January,
1912, and thus put upon the judicial rec
ord that the government was bankrupt
Very appropriately congress at that ses
sion passed the most radical bankruptcy
act ever adopted under a constitutional
government, and the secretary said that
the number who wanted to avail them
selves Of it and start anew was at least
100, 600. The next lowest point reached by
government credit was in 1864, when some
bonds were issued at a nominal per cent
and others at 6, but the depreciation Of
green backs concealed from the people the
real rate of interest. Here is case TO
figure or: Fifty dollars in gold would
buy 81, eco ii greenbacks, for which
$50 bond for 500 could be obtained, in
teres5 At 6 per cent in gold and payable
semiannually. at tho end of 10 years
such q bond was worth its face in gold,
was in terms payable in gold (more strict
1y speaking, coin) and could be sold at
that rate or refunded in q coin bond
Practically, therefore, the investor of 1864
received 13 per cent annually on his $50
investment and at tho end IF 10 years re-
ceived his I1iDcipa1 and n bonus Of $50,
being S160 fer his original investment of !
$50. What rate Of interest did he get2 1
have heard i5 estimated all the way from
Us to 20 per cent / have therefore sub
nAitted tho case to Mr.. Mccoy and re
ce.ved this reply:
JULY 1s
DEAR STA person purchasing n 500 per
cent bond ct $50 and selling is 10 years after
ward for SlOg. interest payable and reinyested I
semiannUs-lly. realizes 1913 per cent on his in
vestment. Yours re- pectfulIy.
JAS s. MCCOY. Government Actuary.
This is high authority, but just the same
do not believe it. maintain that the
investor received q minute fraction over
20 per cent interest. Tho man who figured
for tho house committee on appropriations
makes it a fraction over % per cent 1t
Will do q schoolboy no harm to figure on it.
Another Depressed Period.
The next greatest depression of govern
trent credit was in the closing period of :
Buchanan's administration, when the |
treasury notes were sold at a discount
which made the interest - per cent So /
far as il determined by rates Of interest [
and facility Of borrowing, our credit is
now at its best. but it is claimed by some |
that the highest point was really reached !
IN tho administration of Franklin Pierce, !
when Secretary Guthrie had to pay 5 per /
cent premium on purchased bonds to get /
the surplus money out Of the treasury AS /
current rates Of interest then were nearly |
twice as high IS now, 1t Is assumed by /
some that n . per cent bond then CORE I
spends with q per cent bond now. There I
ID a strange error prevalent which sur
wives repeated demonstrations of its falsity /
namely, that low interest rate proves I,
prosperity. In the majority of cases the /
fact Is exactly the reverse, for in an era Of
activity and rising prices there is in
creased demand Tor money
A Question of Figures.
The act creating the treasury depart
mcnt was signed by George Washington I
Sept. ., 1893, and Alexander Hamilton
was at once appointed to be tho head Of it \
at 80 years of age The first tariff act had /
been signed July 4. but there was no rev /
enue from it Till the 18th of September |
The problem before Hamilton was appall- |
ing in it's simplicity There was no money
and none coming in; there was a debt /
then roughly estimated at sos OOO OCO be- /
sides fncalculable obligations to the sol |
diers Of the Revolution and those who had /
furnished Supplies The calculation was as I
simple that Of the fellow in the OH \
story who married for money and found I
that his 1nother-in-laW had / children and I
10 negroes worth possibly 81, 900 each He /
figured it, Eleven into ten goes nary /
times and nothing over = The estimate or /
the financial board Of the old confedera
ton was cOnsi derably reduced by Bamn /
ton, but he recommended assumption OF l
the state debt. Tt is interesting now to
observe that Massachusetts, and South |
Carolina had each expended 81, 600, 600 for |
the common cause; Virginia, 49, 500 600; /
Pennsylvania, s.. 200, 600; New York, only |
$1,000, 0oo-
a Great Financier.
Hamilton finally figured it down to 1
foreign debt of $11, ITO, 373 a domestic /
debt Of $40, OH, Os5 and state debts to be |
assumed of S25. GOO 600. As a matter of /
fact only SIS, 211, $50 were assumed for |
the states, and the rest was balanced |
of, y in the expressive phrase of the time /
Hamilton and his successor, Oliver VOL /
colt, had to kick this debt along by Dor I
rowing and rounding for some years, but /
In 1874 our drst great boom began
There was war in Europe, and everything /
this country could export brought famine /
prices In 1896 flour sold in New York Il
city at SIG per barrel-the highest gold /
psrice it ever reached there-and fine farms /