Year: 1868

republic. The establishment OF the national
credit is the most essential measure of finan-
clal reform. We hive a debt of about two
and half billions of dollars, upon which the
people in time of peace, and with the dam
ger of national disruption agerted, aie pay
ing war rates Of inteIest-the same inter-
est they were paying when loans were asked
of them of more than half billion year,
and when it was the almost unanimous
opinion of dispassionate outside observers
that the Republic was on the eve 81 over
throw.


Are we not as able, and as well disposed 10
pay our national debt, as Great Britain TO
pay hers? Why should our rate Of interest
be materially higher?


From this year till 1881 our entire debt
may be paid OF renewed. We cannot pay it.
1t Is the first dictate of prudence to renew it
upon terms not derogatory to the national
credit and satisfactory to the national creditor.
To renew il at The same exorbitant rates is
to confess ourselves bankrupt and our gov
ernment mob, which We have no expecta-
ton OF organizing into united and stable
republic. Every loan at six per cent. ought
TO be renewed at five per cent, and that rate
ought not to be submitted to save as the
penalty, we are obliged to pay temporarily for
our own acts OF vol untary bankruptcy. Long
before the national debt is paid it ought to be
converted into consolidated funds al an inter-
est OF four per cent.


Ii is believed that the attempt TO maintain
war taxes and pay war rates Of interest for
the purpose of paying the whole national
debt in twenty years, while the peril and ex-
pense OF actual war have not passed away,
and while the States and municipalities are
cleaning with the nation the same exhauste
helds OF taxation, has been found too oppress-
I've Tor even our prosperous and patient people
10 submit to. We must renew our loans /;
consequently we must go into the markets at
home and abroad as borrowers. 1t is the first
condition of favorable borrowing that our
credit should stand WELL


Wherein does ouy credit not stand well p
Nearly all that has been said in vindcation
OF the national credit has been said with
more or less warmth and eloquence l.y the
Secretary OF the Treasury, by members of
Congress, by pamphleteers and public writers
In support OF the proposition that the five
twenty years bonds of the United States are
payable in coin. 1t is somewhat surprising
that this question should have come under
discussion at all. II was not raised by the
bond-holCers in this country, whose DISPOSE
tion as determined by their treatment of the
two $50 per cent. loans is to renew, and not
to ask payment of their bonds. While the
government cannot be compelled TO pay in
coin in a time from thirteen TO twenty years
hence, while no one contemplates that at that
time greenbdcks, if maintained in existence.
shall not have become equivalent to coin,
there is evidently no compulsion upon the
government to pay these bonds in coin before
it shall have become matter of indifference
to debtor and creditor in what money they
are paid.


Ii those who. advocate the payment OF
the 20 years bonds in demand notes
mean by It to use the demand notes
now authorized Tor that purpose, then il
is difficult to discover even the ecopo-
my OF the measure. The demand for gyeen-
backs amounting in a Il to but s370, 900, 900 to
pay debt Of two billions of dollars would
carry the premium upon greenbacks higher
than upon gold. This premium the people
would pay gratuitously to the holders OF
greenbocks chiefly the national banks, with
out conerring corresponding obligation up
on the bond-holders, ia whose hands the cur
rency having performed its function of pay
ment would sink to its old rate or below it.
Whereas the demand for so much gold with
the supply of the whole world to draw from
would scarcely affect the premium upon gold.
The simultaneous payment of any considera-
bic part of the national debt in demand notes,
the volume of the latter no. being increased,
would be more expensive to the people than
the same payment in gold. A gradual pay
ment while it would be just as costly to the
people would defraud the creditors last paid
while it enriched the holders of greea5acks
and the creditors first paid.


But if it is meant that there shall be new
issue OF demand notes 10 pay the bonded debt
-N-@NN
der with no provision Tor their redemption in
coin, then rot only is the solemn sealed in
strument of the United States repudiated
and the public creditor ,,efsandad but the ma
tional credit is fatally tarnished. Nothing
but reputation of the debt becomes thereaf-
terpossible, for after such an act OF perfidy no
loan would be negotiable either at home or
abroad Nothing has been said too severe
against sach stalwart swindling as such a
transaction would be- But even then. the
fraud does not consist so much in cheating
the bond-holders, who receive perhaps an
equivalent for the deprecated paper they
loaned, as in cheating every creditor, every
owner of lands, ships, houses, cattle, mer-
chandise, insurance policies, State, municipal
or corporate bonds, whom the government
compels to receive this deprecated paper in
payment for properties acquired under diff
ierent scale Of values.


The government has some pretext for de.
ducting from the DEBT to its creditor, who
dealing with it voluntarily took advantage of
its necessities; none for interfering in the bar
gains Of citizens ,sih each other and levying
contributions from them. The bad faith will
be in isSuing the new greeabacks, and forcing
their circulation by making them ie-
get tender. ii will be repetition ia a
time OF peace and with no public exigen-
cy to sanction it, of what was admitted by all
the statesmen who consented to il, to be a
forced loan, a debasing of the currency only
eXcusable by the imminency OF the public
danger.


Here is the point at which the national
credit is suffering. More than five years ago
the United States issued Its promises to pay
on demand, in sums amounting in all to $780,
100000. All but s30O00,000 of these remain
unpaid. No provision has been made for pay
ing them, no day however distant is named
when they shall be paid. The United States
makes careful provision for the accruing in
terest on its bonds, and thus far as its bonds
matured has paid them to the satisfaction oithe
obligees. But for five years these unsealed
contracts have been according to their tenor
payable, and for every day payment has been
refused. The suggestion OF an intention to
pay the bonded debt in greenbacks is only
mischievous in that it is believed that such
greenbacks will be repudiated on presentation
for payment Just as other issues of them have
been.


G.F.T