Year: 1868

penslve war with Mexico, we found our
selves involved In debt of sixty.four
millions, and this was the amount owed
by the Government in 1860, Just prior to
the outbreak of tho rebellion. In the
spring of 1851 our civil war commenced.
Each year of its continuance made an
enormous addition to the debt, and
when, in the spring of 1865, the nation
successfully emerged from the conflict,
the obligations of the Government had


reached the immense sum of 2,S73, ,992,-


9o9. The Secretary of the Treasury
shows that on the first day of November,


1867, this amount had been reduced to
81, 46l ,504, ,45O, but at the same time his
report exhibits an increase DURING the
past year of s35, ,645, ,1O1; for the debt
on the first day of November last ia
stated to have been 81, ,527 ,l2s.55z. IL
is estimated by the Secretary that the
returns for the past month will add to
our liabilities the further sum of 81 / ,O0O,-
600, making total increase during thir-
teen months of SAC, 6,5O0,OOO.


In my message to Congress of December 4.
1865, 1t was suggested that policy should be
devised which, without being oppressive to





reduction of the debt, and, if persisted in. dis
charge it fully within definite number of
years. The Secretary of the Treasury urges
that the longer it is deferred the more difficult
must become its accomplishment We should
follow the wise precedents established in 1889
and 1916, and, without further delay, make
provision Tor the payment of our obligations
at as early period as may be practicable.
The fruits of their labOrs should be enjoyed by
our citizens, rather than used to build up and
sustain moneyed monOpolies in our own and
other lands Our foreign debt is already COM
puted by the Secretary of the Treasury at
eight hundred and fifty millions Citizens Of
foreign countries receive interest upon large
portion OF our securities, and American tax
payers are made to contribute large sums for
their support. The idea that such a debt is to
become permanent should be at all times
discarded as involving taxation too heavy to
be borne, and payment once in every sixteen
years at the present rate of interest of an
amount equal to the original sum- This vast
debt. if permitted to become permanent and
increasing, must eventually be gathered into
the hands OF a few, and enable them to exert
a dangerous and controlling power in the
affairs of the Government The borrowers
would be servants to the lenders-the lenders
the masters of the people. We now pride
ourselves upon having given freedom to four
millions of the cOlored race: it will then be
our shame that forty millions of people, by
their own tOleration of usurpation and pro-
fligacy, have suffered themselves to become
enslaved, and merely exchanged slave owners
for new task-masters, in the shape of bond
holders and tax-gatherers. Besides, perma-
nent debt pertains 10 mOnarchical govern
ment, and has tendency to monopOliZe and
perpetuate class of legislation totally irrecon-
cilable with free institutions. Introduced into
our republican system, they would gradually
but surely sap its foundations, eventually sub
vert our governmental fabric, and erect upon
its ruins a moneyed aristocracy. 1t is our
sacred duty toy transmit unImpaired to our
posterity the blessings of liberty which were
bequeathed to us by the founders of the Re-
publicity our example to teach those who
are to follow US carefully to avoid the dangers
which threaten free and independent people
Various plans have been proposed for the pay
ment of the public debt However they may
have varied as to the time and mode in which
it should be redeemed, there seems to be
general concurrence as to the propriety and
business of reduction in the present rate of in
terest The Secretary of the Treasury in his
report, recommends five per cent Congress,
in bill passed prior to adjournment on the
9th of July last, agreed upon four and four
and half per cent, while by many three per
cent has been held to be an amply sufficient
return for the investment The general i'm
preston as to the exhorbitancy of the existing =
rate of interest has led to an inquiry in the
public mind respecting the consideration which
the Government has actually received for its
bonds, and the conclusion is becoming preya-
lent that the amount which it obtained was in
real money three or four hundred per cent less
than the obligations which it issued in return.
1t can not be denied that we are paying an
extravagant per centage for the use of the
money borrowed, which was paper currency
greatly deprecated below the value of coin
This fact is made apparent when we consider
that bondholders receive from the Treasury,
npon each dollar they own in Government
securities, six per cent in gold, which is nearly
or -9nite equal to nine per cent in currency;
that the bonds are then converted into capital
for the national banks, upon which those in
stitutiOns issue their circulation bearing six
per cent interest, and that they are exempt
from taxation by the Government and the
States and thereby enhanced twOp per cent in
the hands of the holders. We illus have an
aggregate of seventeen per cent which may
be received upon each dollar by the owners of
Government securities. A system that pro-
duces such results is justly regarded as favor
ing q few at the expense of the many, and has
led to the further inquiry whether even the
boudholders, in view of the large profit
which they have enjoyed, would them
selves be ayerse to settlement of our
Indebtedness upon plan which would yield
them falr remuneration, and at the same time,
be just to the taxpayers of the nation. Our
national credit should be sacredly observed
but, in making provisions for our creditors, We
should not forget what is due to the masses of
the people. It may be assumed that the hold
ers of our securities have already received
upon their bonds q larger amount than their
original investment, measured by q gold
standard Upon this statement of. facts it
would seem just and equitable that the six per
cent interest now paid by the government
should be applied to the reduction of the
principal in semi-annual instalments, which,
in sixteen years. and eight months, would
liquidate the entire national debt. Six per
cent in gold would, at the present rates, be
equal to nine per cent. in currency, and equiva-
lent to the payment of the debt one and q half
times in fraction less than seventeen years.
This, in connection with all the other adYanta-
ges derived from their investment, would al,
ford to the public creditors a fair and liberal
compensation for this use of their capital, and
with this they should be satisfied The lessons T.
az. ths nast adu,onish the lender that it IS net
veil to he oyer.anxious in exacting from the
borrowers rigid compliance with the letter Of
the bonds. - -it - ~. i3'.s - -.


If provision be made for the payment
of the indebtedness of the government
in the manner suggested, our nation will
rapidly recover its wonted prosperity.


IL