Year: 1868

udf6 SuucIcu JuculotlNCS W DCCbluC Cu
shaved, and merely exchanged the slave
owners for new task masters in the
shape Of bondholders and tax-gatherers
4 Besides permanent debts pertain to
monarchial governments, and tending
to monopolies, perpetuties and class
Il Legislation are totally irreconcilable
4 with the free institutions introduced
into our republican system. They
would gradually, but surely, sap its
foundations, eventually subvert our gov
3ernmental fabric and erect upon its ruins
la monied aristoeracy. 1t is our sacred
tduty to transmit unimpaired- to our
iposterity the blessings of liberty which
fwere bequeathed to us by the founders
tof the Republic, and by our example to
teach those who are to follow US, care
fully to avoid the dangers which
Ithreaten a free and independent people.
HOW TO PAY THE DEBT.


e Various plans have been proposed for
the payment of the public debt.
However they may have va
lried as to the time and mode
In which it should be redeemed, there
seems to be general concurrence as to
! the propriety and justness of reduc-
ton in the present rate of interest. The
Secretary Of the Treasury, in his report,
recommends five per cent. Congress, in
a bill passed prior to adjournment, on
the 9th of July last, agreed upon fonr
and four and half per cent, while by
many three per cent. has been held to be
an amply sufficient return for the in


vestment. General impressions as to
the exorbitancy of the existing rate of
Interest have led to an inquiry into the
public mind respecting the cOnsidera


ton which the Government has actu-
ally received for its bonds, and the con-
clusion is becoming prevalent that the
amount which it obtained was, in real
money, three and four hundred per
cent. less than the obligation which is
issued in return. 1t cannot be denied
that we are paying an eXtravagant per
cent. for the use of the money borrowed,
which was paper currency greatly de-
prsciated below the value OF coin. This
fact is made apparent when we consid-
er that the bondholders receive
from the Treasury upon each bond they
own, in Government securities, SIX per
cent. in gold, which is nearly or qnite
equal to nine per cent. IN currency;
that the bonds are TO be converted into
capital for the National Banks, upon
which these institutions issue their cir
culation bearing six per cent. interest,
and that they are exempt from taxa
tion by the Government and State,
and thereby enhanced two per cent. in
the hands of the holders. We thus have
! IN of


which may be received upon each dol
lar by the owners of Government secur-
tiles. system that produces such re-
suits is Justly regarded as favoring a
few at the expense of many, and has
led to the further inquiry whether our
bondholders, in view of the large
profits which they have enjoyed, would
themselves be averse to a settlement of
our Indebtedness by a plan which would
yield them q fair remuneration, and, at
the same time be just to the taxpayers
of the nation. Our national credit
should be sacredly observed; but in
making provision for eur creditors we
should not forget what is due TO the
masses OF the people. 1t may be as
sumctt that the holders of our securities
have already received upon their bonds
larger amount than their original in
vestment, measured by gold standard.
| Upon this statement of facts it wOlld
seem Just and eqitable that the six per
cent interest paid by the Government
should he applied to the reduction of
the principal in Semi-anuual install


mcnts, which, in sixteen years and eight
months, would liquidate the entire na-
tional debt. Six per cent. IN gold
would, at present rates, be eq1al 10 nine
per cent in currency, and equivalent to
the payment of the debt one and half
times ia a fraction less than seventeen
years. This, in connection with all the
other advantages derived from their iu


vestment, would afford to the public
creditors q fair and liberal com
pensation for the use of their
capital, and with this they should be
satisfied. The lessons of the past ad-
m0nish the lender that it is not well to
be over anxious in eXacting from the
borrower rigid compliance with the
| letter of the bond.


PROVIDE FOR PAYMENT AND PROSPERITY
| WILL FOLLOW.


If provision be made for the
payment of the Indebtedness of
! the Government in the manner sug-
gested the nation will rapidly recover
its wonted prosperity. It's interests re-
quire that some measures should be
taken to release the large amount of
capital invested in the securities of the
Government. 1t is not now merely un


productive, but in taxation annually
consumes one hundred aud fifty millions
of dollars which would otherwise be
used by our enterprising people in adj
! ding to the wealth Of the nation. Oar
commerce, which at one time success
/ fully rivalied that of the great mara
! time powers, has rapidly diminished,
aud our industrial interests are in a de.
pressed aud languid condition. Tie
development Of our ineXhaustible re-
sources is checked and the fertile fields
of the South are becoming waste for
want of means to till them. With the
release of capital new l'fe would be in
fused into the paralyzcd energies Of our
people, and activity and vigor impaired
| to every branch of industry. Our peO-
pie need encouragement ia their efforts
| to recover from the effect of the rebel
lion and of injudiciOus legislation, and
| it should be the aim of the Government
to stimnlate them with the prospect of
an early release from the burdens which
impede their prosperity. If we cannot
take the burdens from their shoulders,
we should at least manifest willing
ness to help to bear them.


THE CIRCULATING MEDIUM.


In referring to the condition of the
circulating medium, shall merely re-
iterato substantially that portion of
MY last annual message which relates
to that subject. The proportion which
the currency of any country should bear
! to the whole value Of the annual pro-
duct, circulating by its means, is a
question upon which political econo-
mists have not agreed. Nor can it be
controlled by legislation, but must be
left to the irrevocable laws which
everywhere regulate commerce and
trade. The circulating medium will
ever irresistibIy flow TO those points
where it is in greatest demand. The
law of demand and supply is as uDer-
ring as that which regulates the tides
of the ocean, and, indeed, currency, like
4 .ka +;daa has its ahhs and flaws