The Seattle post-intelligencer. [volume] (Seattle, Wash. Terr. [Wash.]) 1888-1914, 1896-04-20
ERRORS OF POPULISM.
The Refundln9 Act-A Wise Measure
Great sewing OF Interese-GSneral
Ownerxhip OF Bonds.

OWueFSnlp OF BONDS.
Copyright. lsss by H. W. Craven.
One OF the awful crimes that Populist
leaders charge upon the Republican party
u the refunding Of the public debt under
the law of July IA. is7e Many men whose
information is limited and whose preju-
dice Is easily aroused have been misled
BY Populist demagcgues with reference 20
this matter to such an extent that what
was. in reality, a very wise and beneficial
measure Is regarded by them as q scheme
Of oppression and robbery.
Emery % voices the sentiments OF Pop
ulist leaders in the following words: The
next and fifth step in the internal scheme
was that OF refunding the national debt.
Few people ever comprehended the enorm-
lily OF that crime, and never was there
deeper laid plot 10 reduce q people to
abject and hopeless servitude."
Exactly what was II that the Republican
party did which thus excites the ire, real
or pretended. of Populist demagogues?
In 1867 bonds TO the amount or about
800 900, 90 became redeemable. That Is.
the government couid pay them IL II wished
to do so and had the money with which
to pay them: but the holders of the bonds
could not demand payment until later
period Although the government was
paying OF the public debt at the rate OF
several million dollars a month. 1t did not
have nearly enough money to pay on all
the bonds as they became redeemable.
II was thought that the holders of these
bonds would be willing to exchange them
at par for other bonds running for a longer
time and bearing a lower rate of interest.
In this way there would be a considerable
saving of interest TO the government Va
rious schemes for thus refunding the ma
tional debt were suggested.
Thad. Stevens, in a speech in the lower
house. July II. 1858. said: II am in favor
OF funding bill which shall reduce the in
terest on our bonds. II no person shall
choose to fund under such bill, no harm
viii be done: II any person does choose to
fund under II at q lower rate Of interest
than We now pay. We gain by 1t" ca. On
the same day, Ben Butler, who was the
candidate of the Greenback party for pres
ident In 1854. stated that he was in favor OF
refunding all the outstanding bonds into
non-taxable bonds. running nifty years and
bearing 36S per cent. interest. But But
ler's plan to have the new bonds run fifty
years was not regarded with favor gen.
orally. 1t looked too much like a perpet-
ual debt. which is opposed to the policy
and practice of our government through
all its history.
President Grant. in his first inaugural
address. March T. 1869. said: ITO protect
the national honor. every dollar of gov
eminent Indebtedness should be paid In
gold unless otherwise stipulated in the
contract. Let ii be understood that no
repudiator of one farthing of our public
debt will be trusted In public place and it
VIII go far toward streng thening q credit
which ought to be the best in the world.
and will ultimately enable us to replace
the debt with bonds bearing less interest
than We now pay"
When the credit Strengthening act was
Snh hn al ALL -
only IS cents in gold (O. Within a year.
under the favorable influence Of that law.
1t was worth 50 cents in gold. For the
same reason government bonds advanced
in value: and the general credit Of the gov
eminent was much improved. As more
OF the bonds became redeemable. and the
credit of the government improved. the
advisability Of refunding the bonds be-
came apparent to everybody. A large ma
jority in both houses of congress were in
favor of IL: but there was considerable
difference of opinion as to the length Of
time the new bonds should run.
BY July, 1870. about 81, 500, 00O, 900 OF bonds.
some OF them bearing 8, but most Of them
per cent. interest, were redeemable.
After much discussion, the law OF July
IA. 1870. was passed. As amended by the
law Of January 90 1871. 1t provided for the
issue of s.. 50o. 600 900 Of bonds, bearing s. AZ
and per cent. interest, to be exchanged
at par for outstanding s and per cent
bonds 90. They were non-taxabie, 1t be-
ing believed. with good reason, that II
they were not subject to taxation the gov
eminent could dispose Of them on more
favorable terms. The new per cent, bonds
were redeemable after ten years: the AZ
per cent. bonds. after fifteen years; the 1
per cent. bonds, after thirty years
Under this law the bonds bearing a high
rate or interest that the government did
not have the money to pay were gradu-
ally exchanged for bonds bearing a lower
rate Of interest. The process of refunding
was interfered with by war In Europe by
the panic of 1873 and by the free silver agi-
tation In this country. In 1881 Secretary
Window exch inged sia per cent. bonds,
payable at the pleasure OF the government.
for all the outstanding and 8 per cent.
bonds.
On July l. 1870. before the refunding be-
gan, the total interest bearing debt OF the
government was s., o4s, 900 600. and the an
nual interest charge was Sis, 7S4 600, or So os
per capita On July 1, 1882. when the re-
funding process. as far as the law OF 1870
Is concerned. was finished the total In
terest bearing debt OF the government was
u, 49,, 900 900. and the annual interest charge
was only S57. 800 900, or 81. % per capita. It
will be seen that the total debt had been
reduced 3 per cent. and the annual inter-
est charge 81 per cent. "a.
IL man has promissory note that he
can not pay IL is a very beneficial thing
for him to renew 1t at lower rate of In
terest
That Is exactly what the government
did by refunding its debt. That is the very
act that Ia so vehementIy denounced by
Populist demagogues
Before 1890 Emery wrote with reference
to the bonded debt and the refundiny act:
In consequence of this nefarious act,
about $50 000, 900 OF the debt can no. he
paid until 1907 ~. Contrary 10 this ig
nornnt prophecy. the total interest bear
ing debt OF the United States on November
30. 1891. was only s5s5 02s SO 80
That the refunding OF the public debt was
a crime against the people is not the only
delusion entertained by Popullsts with ref
erence to the bonds. They also seem nos
sessed of the idea that when the bonds
were being issued only few people had
means enough TO invest In them, and that
when. by the successful termination OF
the war. the bonds were enhanced in
value. only a few received the benefit
And these few are spoken OF in Populist
literature as ''Shyiocks'' and scoundreIs
The fact Is that the bonds were issued in
denominations OF so and upwards. and
hence were easily within the reach of the
great mass OF the people. The government
reports show that vast quantities of the
bonds were sold to people OF moderate
means. and even TO poor people who
wished a sure investment for their scanty
savings
The $3.50, 600 600 OF 80 notes. all OF them
outstanding until 1867. were convertible AZ
maturity. at the option of the holder, into
bonds. Populists assert that the 20
notes. along with the greenbacks were in
general circulation as money all over the
n IA Una