The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1900-02-27

PUBLIC DEBTS AND INTEREST.
The provision in the new currency bill for
the refunding of the public debt in per
cent. bond marks the beginning of an un-
de%taking which, IL successful, will excite
the admiration of the world and register
high-water mark in the tabulated credit of
nations The rate of interest proposed Is
the lowest ever paid by any government
and less than half that now paid by some
European governments. According to Null
nall, an authority in statistics, the highest
rate of interest paid by any government is
by that of Hungary, Sc per cent. Japan
comes next, paying 6.3 per cent, and China
"a per cent. OF European governments,
Portugal pays the highest rate. per cent,
Spain 49, Russia 4.6, Austria 43. Other
European governments pay fraction over
3 per cent, except Great Britain, the low
est of any. 81 per cent. When the statistics
were prepared the average rate of interest
paid by the United States was about per
cent. OF the European countries above
named the ratio of their public debts to
their estimated wealth is as follows: Por-
tugal q per cent. Spain 10 per cent, Rus
STA IA per cent. Austria Is per cent. Great
Britain per cent. In the United States
the ratio is per cent. 1t will be seen.
therefore, that the credit of a nation or
government bears a close relation to the
ratio between its public debt and the ag-
that the debt of the world has multiplied
ten-fold during the last hundred years,
while the credit of all nations has steadily
improved. enabling them TO borrow at a
gradually decreasing rate of interest,
shows that the wealth of the world has in
creased in a greater ratio than it's debt.
The difference between the credit of the
United States at the beginning of the nine
teenth century and at its close, as indi-
Gated by the rates of interest paid by the
government, furnishes as interesting an il
lustration of national growth and progress
as can be found in any page of our history.
1t also furnishes gratifying proof of the
care with which the national honor has
been protected, for, while some States of
the Union have incurred the disgrace of re-
pudiation the national government has kept
its honor and credit untarnished. 1t has,
however, had periods of great financial
stress when its credit was strained almost
to the breaking point The lowest point its
credit ever reached and the highest rate of
interest it ever paid was in 1860, during the
closing months of President James Buch-
anan's administration. Through the cutting
down of the tariff in 1857 and the heavy
expenditures during Mr. Bucha mans ad-
ministration the national debt had greatly
increased and money could not be raised
on United States treasury notes at less
| than 10. II and finally II per cent interest
When John A Dix became secretary OF
| the treasury, about the close of 1860, he
| found the public credit so low that, in des-
peration, he recommended to the commit
| tee of ways and means that the several
| States be asked to secure the repayment OF
money which the government should Dor
row, by pledging the repayment for this
| purpose of the public deposits received BY
them in the distribution of the surplus ir
| the United States treasury In 1886. Con.
/ gress did not adopt this humiliating recon.
| mendation. and the government managed
to weather the stress by borrowing at ar
exorbitant rate of interest In less thar
| two years from that time, under a change
| of administration and in the midst of
great civil war. the government was able
\ to borrow all the money 1t needed at rate:
| of interest which. though high compared
with what it now pays, were only about
| half those paid before the war began TIL,
highest point reached by the public deb
was in August. 1866. when it was s2,s44, 49,
| 626. nearly all of which bore interest at tn,
rate Of per cent. The process of reduc
| ton and refunding began Immediately anc
| has continued ever since. until. on the Sls
| of January last. the total interest-beasin.
debt was sl,Oas ~, $780, of which sos, 1000. OO
| drew interest at the rate of per cent. ant
the balance at and per cent. The re
funding of all these bonds in new pei
| cent bond will be the greatest financia
| achievement on record