The times., 1899-12-02
TO REFUND THE DEBT.
The senate Finance Committee to
Discuss the Measure.


One OF the most radical measures TO
be discussed at the meeting of the Senate
Finance Committee this morning at 10
o'clock is a proposition 10 refund almost
the entire interest bearing national tebt
OF the United States. In the preliminary
conferences Of the committee held since
the adjournment OF the last Congress
the proposition for refunding has been
virtually agreed upon. a member og the
committee said last night that although
the committee had as yet formulated no
bill for the revision Of the currency laws,
a measure OF that kind including the debt
refunding feature. would, in all probability
be completed as early as tonight. He pre-
dicted that the measure would, in some
respects. practically coincide with the bill
OF the House Caucus Committee, but that
the measure, as a whole would be Tadi-
caily different
1t is believed by some members Of the
Senate committee that the refundng
scheme, although it does not appear in
the House bill. will be acceptable to the
caucus committee and TO leading Repub-
licans in the House. At the meeting Of
the Senate Finance Committee at the
Oriental Hotel, Coney Island, last summer.
Secretary Gage was present by invitation
and submitted an outline scheme for the
refunding of the national debt. Il now
appears that the Secretarys recommenda-
tions found substantial favor with the
committee, and that, although the method
OF carrying 10 out Will not be perfected
until today the plan will be adopted and
incorporated in the forthcoming currency
bill
The plan is to extend the time of ma
I turity of all the United States bonds ex-
cept the issue OF January Is, 1875, maturing
in 1925, and amounting to $I62 315, 400 II
is believed the high market value of this
loan of 1925 precludes the possibility OF
refunding il at present The only
other exceptions to the refunding scheme
! is that part Of the loan authorized in July
1870, and January, 1871. which was cOntin-
ued by act Of Congress at per cent. al
the option Of the Government These bonds
outstanding amount TO only S25, ,364, 500
The bonds to be refunded are. therefore
| the 1-2 per cent funded loan Of 1891
amounting TO 1925, 600, 900; the per cent
funded loan of 1907 amounting TO S559,-
595, 900; the per cent loan OF 1904
amounting TO $97, ,402, 800 and the pei
cent ten-twenties OF 1898, amounting to
$19S, ,67S, 720. The amount Of bonds to be
refunded is, therefore, somewhat more than
81, 600 900, 600.
shall be extended for maturity has not been
definitely determined Secretary Gage has
estimated, however, that the savings TO the
Government in interest payments annually
provided the bonds are refunded at or
Id per cent, will be somewhere between
S16. 600. 600 and $20, GOO 900.
In his plan. submitted TO the Senate
Finance Committee the Secretary showed
in great detail what the saving TO the na-
tional banks and TO the Government would
be. A necessary accompaniment OF the re-
funding scheme, of course. is proposed
banking legislation which will make II OF
advantage to the national banks 10 dispose
of their 3, 4, and per cent bonds at market
value, receiving 2 per cent or IA per
cent bonds at par in return, together with
new privileges affecting bank issues and
conditions of circulation. The scheme thus
arranged is expected to be readily accepted
by the banks. while it will result in a great
saving to the Government.
Secretary Gage believes that the scheme
will prove TO be popular, for the argument
is used that whatever is advantageous to
the Government In connection with na-
tional Indebtedness Is advantageous to the
people, and this view is endorsed by nearly
if not quite all the members of the Senate
Finance Committee. They argue that it is
MuCn betteT lot the taxpayers OF the Unite
States TO have the national debt extended
beyond the original dates Of maturity. the
Government paying 2 per cent interest,
than FOR them TO endure the possible bur
dens Of purchasing the bonds within the
next decade, when private individuals have
10 pay 10 per cent for borrowed money.
in other words the familiar argument that
a saving by the Government is a saving by
the taxpayer is fully endorsed by the ad-
yocates OF the present scheme for refund
ing Secretary Gage and some Republicans
on the Finance Committee are even not
unfavorable to a proposition 10 continue a
large part OF the United States bonds at
the option of the Government under a sim
liar system to that regulating British con-
soils. 1t is considered entirely unlikely,
however that this proposition will be sub
mitted by the Senate committee in its bill.
A proposition that finds favor with some
Republican Senators and Representatives
is to refund the greenbacks by the use OF
2 per cent bonds. This suggestion has not
been seriously entertained, however, by the
Senate Committee or by the Secretary Of
the Treasury. Secretary Gage, as is well
known advocates a different method Of re-
firing the greenbacks.