Year: 1869

Ing tho Debt.


Looking at Secretary Boutwell's speech,
delivered at Philadelphia on Saturday. we
must give him credit for learning some things
though his financial theories generally are
very vague and crude. We are glad to
notice, for example, that he has taken up the
idea we have been advocating Of funding the
debt at lower ratio Of interest. Judging from
his remarks, 1t Is probable he will recommend
this to Congress at the forthcoming session,
and we should not be surprised If 1t were to
become q prominent feature in the financial
policy of the administration and Of the domi-
nant party. But while we give Mr. Boutwell,
credit for adopting this idea, aud hope he win
act upon 1t as far as his power may go In
recommendation to Congress, we regret that
he does not take the question UP in broad
and comprehensive point of view. He has
the same limited and patchwork sort of notion
on this as on all financial subjects. Why, for
half per cent interest when ii could
be done at four per cent? Perhaps it
could be funded at three sixty-five, which
would be cent day, and which would sim
plify both the operation Of funding and the
payment of interest to the bondholders. The
difference of premium that might have to be
paid in Transforming our six per cent debt to
consolidated one bearing interest at one
or other Of these lower rates would not
amount to much. When the debt is being thus
fpnd od "a ~ hal
more or less, would not make great differ
ence in the price of the new loan or stock,
while the benefit to the country Of placing
the debt at the lowest possible rate would in
the end be immense.


In his ignorance Of great questions of ma
tional finance the Secretary is always timid
and inclined to adopt half measures. What
we want is q bold and comprehensive financial
policy, with a view, not merely to present
exigencies, but to the future. Then, Mr..
Boutwell, seems to imply that 1t would be de-
sirable to fund only portion of the debt. We
want no patchwork in such an operation. The
whole debt, with the exception OF few hun
dred millions that can be paid off within
year or two, should be put into one form and
simpliaed The Secretary lays great stress
upon the principal OF the debt being payable
In gold as we'll as the interest. This is the
opinion only of Mr.. Boutwell, and the class Of
financial theorists to which he belongs. There
is large class Of people who think great
part Of the debt is payable in legal tenders.
This was the opinion of Thaddeus Stevens


4kk ~A~A .vh.> ID 10 R.r
creating the debt and the legal tender notes.
The Secretary himself In face OF such
declaration, goes into the market and pays for
the bonds much less than their par value in
gold. If the obligation on the part of the gov
ernment were to pay the principal Of the debt
in coin or its equivalent, az Mr.. Boutwell,
asserts, then he should pay hundred and
thirty in currency for those bonds which he is
now buying at hundred and fifteen Yet he
has sense enough not to throw tue public
money away in any such manner. The people
would be surprised and indignant il he were
to do so. The government is the agent of
the general public, aud its duty is TO make the
best bargains it can and the best use of the
money ia its hands tor the good of the people.
1t is not required to pay more than is due or
necessary in favor Of certain class nor to
strain the law where there is doubt in favor
of the bondholders. Regarding the matter in
point Of equity the bondhoiders are getting
paid far above what the government ever
received for the debt. This demand for prompt
payment at par in gold, regardless of the
heavily taxed people or the necessity of liqui-
dating the debt in the easiest manuer possible
within the limits Of the legal obligation, has in
1t much of the Shylock rapacity. The bond
holders are taken care Of very well, and Mr..
Boutwell, need not be 80 very anxious about
their interests. Some attention might be paid
to the interests of the people who pay the
taxes as well. However, we hope the Secre-
tary will prepare the way for funding the debt
at the lowest rate Of interest possible, and
thus save fifty millions or 30 year to the
public.