The herald., 1898-04-25
WAR AND FINANCE

Those who do not look beneath the sur
face underrate the materiality of the
means employed to provide money for
carrying on war. On the surface are
the activities in raising and equipping
troops, and in supplying both the army
and navy, and in maneuvering and fight
ing on land and sea. That war creates
a demand for unusual sums of money,
and imposes the necessity to make loans,
is we'll understood by people generally;
but there is not apt to be sufficient atten-
tion given to the ways through which the
money is provided.
Our experience in managing financial
affairs in war has been limited, as COM
pared to that Of the principal European
nations. Really we have had but one ex-
perience of any consequence; thN was in
the late civil war. That experience
should enable the government to be
wiser than it then was. What then could
not we'll have been done is feasible now.
Conditions were such that it was i'm
practicable, If not impossible, to float a
POpuldi iOdhB ~ ShA AON
be easily done to almost any necessary
amount.
A syhdicated loan is vastly different
from a popular loan. A syndicate wants
bonds Of large denominations and a long
time to run, and 1t also expects the in
terest to be paid in gold coin, though not
80 specifically stipulated. In case Of a
popular loan, bonds are issued in small
sums that they may be taken by people
with small means, and the takers are not
80 captious about the kind Of money in
which payment is made. Government
bonds are the peoples bonds, and the
easier it is for the government to meet its
obligations the lighter will be the public
burden. Syndicates do not invest from
patriotic motives but for gain. merely,
while the people invest quite as largely
from patriotism as for profit. Bonds
issued in small denominations and wide
1y distributed will circulate in daily
transactions and constitute part of the
currency Of the country.
That such bonds may circulate freely it
is best they should be simple in form and
bear rate of interest which can be con-
veniently calculated. Mr.. William D.
Kelly of Pennsylvania, in the early sew
enties, introduced bill and pressed its
passage without success, which provided
for the issuance of bonds in sums of $50
and upwards, bearing a rate Of interest
nf 2 eS ra
terchangeable at the several sub-treas-
uries for greenbacks on the request of
the holders, and vice Versa. That rate
was fixed because interest could be read
lily calculated, it being one cent day
on 500. When presented to the treasury
for greenbacks the holder would receive
the amount Of the principal and accrued
interest and when they were returned
bonds would be given which, with prin-
cipal and interest, would equal the sum
of money presented. Under this plan the
government would save interest during
the time it held the bonds. The same
calculation would be gone through with
in transactions among the people. When
an interest coupon became due the holder
of the bond would receive payment.
We state this plan for the purpose of
evolsing consideration. The government
should now be able to avoid the mistake
of selling to syndicates on onerous terms,
as was done during the civil war.
In some way the volume of paper
money will have to be enlarged, and if
popular opinion is to be respected it will
be through the issue Of treasury notes.
In doing this there should be safe