Iron County register. [volume] (Ironton, Iron County, Mo.) 1867-1965, 1898-07-14
WAR REVENUE AND BONDS.
Against the Issuance Of Longtime
Notwithstanding National Debt.

! Against the Issuance OF Longtime
Bonds-IncreasingN National Debt.
| The following remarks were made by
Senator Stewart in the senate recently.
while the conference report on the war
revenue measure was under considera-
| ton:
1.-THE Objectionable features of this
bill is the issuance of longtime bonds,
which I regard as entirely unreces-
| sary, and as departure from the tradi-
tions of the country from the founda-
| ton of the government.
For all the time previous to 1862,
when emergencies of this character
arose, such as the war of 1912 and the
| Mexican war, short-time bonds, run
| ming usually for one year, called treas
ury notes were issued. They were not
| bonds, but they were treasury notes
| drawing low rate of interest, and were
receivable for government dues. They
were convenient to be used in the pay
rnent of taxes, and kept the United
| States out of debt.
When the civil war broke out we had
| treasury notes under the law as it then
| stood. Such notes were first used.
| Finally there was issued legal-tender
money, the greenbacks, but there were
no longtime bonds issued; they were
| all short-time bonds, and were under
| the control of the government. 10 be
funded or disposed of as it pleased, at
| the option of the government, when the
| war closed.
NO system of longtime bonds or in
| debtedness grew up during the war.
u Il Il 80,
strengthen the public credit, and the
mode of strengthening it was TO in
crease the interest-bearing obligations.
longtime bonds were issued under the
| act of July IA, 1870, but they were large
| " retired. Previous to the extra ses-
sion of 1893 there had been retired $17,-
900 of these bonds. The gcvern-
ment paid them off, and continued to
| pay them off. as long as the circulating
| medium was sufficiently great to stimu-
late production and create business to
be taxed.
eff the debt had been paid of at the
same rate for the last five years as it
was for the five years previous to the
repeal of the purchasing clause of the
Sherman act, we should now hive no
ndIlOIdI uSDt. Hc uCDI was PAU Oh
for the five years preceding 1893 at the
rate of over SIP 100000 year. If the
conditions had continued as they then
were, we should have had no debt now.
''Since the repeal of that act and the
putting out of no more new money we
have been increasing our public indebt-
edness about $6O,OOO,O00 year. 1t is
now proposed to add $500, 600, 900 to the
bonded debt. The hundred millions of
short-time bonds, redeemable at the
option of the government, will remain
permanent loan. No goldite secre-
tary of the treasury will be likely TO re-
deem them.
1.-The bonded indebtedness will be
raised by this scheme to about thirteen
hundred or fourteen hundred million
dollars, which, measured by the burden
of labor required to pay it, will be much
larger than any debt ever saddled upon
the country and will be much larger
than the debt was when the war closed.
1t appears to be the design or de:ermi
nation to depart from the traditions es-
tablished by Madison and followed I'M
til the civil war and to repudiate the
traditions of Lincoln's administration
when greenbacks and short-time bonds
were issued to avoid the establishment
of permanet debt.
"What are the influences dema nding
q permanent debt? Unfortunately. I'M
der the present system this permanent
debt enables bankers to invest their
money at rate of fully 20 per cert. per
annum. This offers them 20 per cent
per annum interest. You may ask how
make that out.
"A bank deposits 100000 of three per
cent. bonds and receives from the
United States $4,000 of government
money called national bank circu'at ton.
Ten thousand is the full extent of the
investment of the bank. The govern
ment pays $4,000 interest on the bonds,
from which must be deducted Que per
cent. on the 5000 of circulation. which
is 5000. The department charges would
be about 500. which must be added to
the 5000 tax, making 81, 900. The 81, 900
deducted from $4,000 interest leaves
$4,000 as the net return for the invest
ment of $4,000, which is 90 per cent. on
the money invested. The government
pays this interest semiannually and the
bank uses the 500, received from the
government in its business.
For what reason does the United
States pay bankers 20 per cent. per an
mum for the use of their money? Is it
because government money given to
banks and issued by them is said to be
money better than money issued direct
~ by the government? This appears to
be the excuse for the swindle. It is pro-
posed by Mr.. Gage to give back to the
banks the entire cost Of the bonds de-
posted, dollar for dollar. In that case
the banks will receive from the govern
ment 100000 for which they will pay
no consideration whatever except the
bank tax, which, under the law as il
now stands, is one per cent, but which
Mr.. Gage proposes to reduce to one
fourth of one per cent. If Mr.. GageV
recommendations are adopted, TIL" CO.,
eminent will loan money to banks for
one-fourth of one per cent. and issue
bonds to borrow money at three per
cent. 1t may be very good for the hanks,
but it is bad for the people.
rs it to be wondered at that there
should be a special effort, a strong lob
by, to get out bonds? You say that the
government may issue bonds under ex-
listing law. Why not use those bonds?
Because it requires large investment.
Those bonds are worth 100, and then
you have to invest $4,000 to get $1,000 |
of circulation. They want better terms. |
If they can get bonds at par and receive |
Al