The herald., 1895-02-10
THE PUBLIC DEBT PROBLEn.

Cling to pay it off. The law enacted dur
| ing the war, authorizing the issue of
bonds, provided a sinking fund of $780,
100000 per annum to be applied to the re-
! duction of the bonded debt. That law is
still in force and is really a contract with
the bondholders. The government has
gone beyond that by anticipating the ma
turity of the bonds by buying them up in
the open market. As the debt has been
reduced at the rate of more than the $50,
000,0O per annum it has been held that
| the overplus can be applied to future
years, and that there need not be $50, 000,
600 applied annually until the overplus
is exhausted. Since the war there has
been no law enacted authorizing enlarge
ment of the bonded debt except in the act
of 1873, which provides for maintaining
gold redemption of the legal tenders after
January l. 1879
For the first time since the war the
Government finds itself in condition in
which the Treasury officers deem it nee
essary to increase the bonded debt. At
the time the resumption act was passed
it was generally thought that bonds would
have to be issued and sold to enable the
to redeem the treasury notes in gold. At
that time the visible gold in the country
was only about third the volume of
the outstanding legal tenders. No doubt
when Mr.. Sherman became Secretary of
the Treasury he expected he would be
obliged to issue bonds, and to prevent it
he drew in the legal tenders and reduced
the volume to $346 900, 900. 1t SO hap
| pened that the balance of trade in 1856
turned in our favor and was continuous
and large until 1888, which gave us
an ample stock of gold to meet
every possible obligation. The adverse
balances only continued through 1888 and
1889, and then changed in our favor. The
adverse balances in those two years
aggregated but $50, 900, 00O but in the last
two years they have been heavy, which
have materially reduced our stock of gold,
and caused heavy demand for redemp-
ton of the legal tenders. The debt ques-
ton has now become perplexing and Sc
rious for the simple reason that the vol
the demands upon it.
France is more heavily indebted tn an
any other nation, yet she gets along
more easily with it than any other ma
ton. Their consols are issued in small
denominations and are held by her own
people, and the interest is paid to them,
which prevents money from going out
of the country. Our bonds are issued in
large sums and get into foreign
hands, which draws our money away
from home; or they are held in large
blocks at home, and the interest goes into
the hands of the rich, which has little
effect in putting money into circulation.
The result is greater accumulation of
wealth in money by the few. France is
also the most prosperous nation in the
world and she has the largest per capita
volume of money, and her money is both
gold and silver, in about equal parts, and
she preserves the parity of the two metals
on a ratio of fifteen and one-half of silver to
one of gold. The great debt of France is
the result of the Franco russian war; the
indemnity paid to Prussia being fifteen
mlliards of gold, in addition to the cost of
maintaining her great army during that
contest Business in France has never
suffered in consequence of an insufficient
volume of the circulating medium, which
is one of the causes of her uninterrupted
and unequaled prosperity.
The debt problem with us is perplexing
because we are trying to maintain the
gold standard without possessing the
requisite quantity of gold, or being able
to obtain it in any other way than by
purchasing it from foreign nations with
bonds, and thereby increasing the gold
interest bearing debt The effort to pay
Ii 4. ~. 4 u
our money on gold basis has made it
necessary to so limit the volume of the
circulating medium as to embarrass and
cripple the business of the country,
producing general depression and dis
tress, and reducing the revenues
of the Government below what they
would otherwise be- Estimates of re-
ceipts are utterly unreliable, whatever
may be the revenue laws, except when
the business of the country is in a
normal condition. Mutations which
occur in nature no man nor govern
ment can control or regulate, and revenue
measures cannot provide against such
hazards, but policies can be pursued that
will produce certainty of results when
conditions are otherwise of the US
ual character. The present depression
in business in this country is not the
effect of supernatural causes, but of erro-
neous monetary, commercial and indus
trial policies. France is not more pro-
ductve than this country, nor are her
people superior in physical strength and
intelligence, though they are probably
more generally Industrious, economical
and thrifty.
AS our policies have worked badly,
more especially the financial policy, it
would seem to be the part of wisdom to
make a change, and when it is apparent
that we need much larger volume OF
money, a change in that direction should
be promptly made. Why not take the
example of France and monetize the two
precious metals on parity and ratio OF
our own, regardless of the views and
wishes of any European nation? A larger
volume of silver will reduce the necessity
for the use OF gold, if hereafter we enter
into no new gold contracts. TO provide
an abundance of revenue is an important
step towards the solution of the debt
problem. A sufficient volume of money
will revive business and enterprise and
enlarge revenue receipts.
That cable connection is to be made
with the Hau,a;;an islands Opcp IN N