Year: 1868

To determine the merits of any


scheme of finance, by whomsoever pro-


posed, we must test it by the appiica-


tion of certain well known principles


which have received universal aecep-


tance. What do the authorities saw is


a pertinent question when we are seek


ing knowledge in law or medicine


And what do those who have made the


subject of Political Economy the study


of lifetime think about currency,
finance and national debtsi Viewed


in the light of certain fundamental


principles upon which the best authori-


ties on finance substantially agree, Mr..


Sherman's consolidated loan bill is not


beyond improvement.


Our first objection to the bill is that


it is premature. While our currency


is in an abnormal condition Incident to


state of war, can we best determine


in what shape our indeb,ness shall


continue and remain during almost a


half century of peace? Should it be


assumed that We can borrog money at


no better rates ten or twenty years


hence than we can to-day? Mr.. Sher-


mans bill for uniting the different


loans into one new consolidated loan


can only be successful on the assump-


ton that the loan can be negotiated at


par while drawing in reality but five


per cent. interest. While We still have


under discussion the payment or nom


payment OF our present creditors, does


the Senator imagine that any capital


ist will be fool enough to place his
money in the hands Of such a borrow
er? The Government, or rather Con-
gress, makes no effort to have outstand-
ing promises redeemed. The United
States promises to pay four hundred
million dollars in the shape of green
back promissory notes, which are due
to-day. What assurances have capital
lists that the Government will pay any
more attention to new promises than il
does 10 the old? The first step, then,
before going into the market as bor-
rover, Is to-resume payment. Until
we do this, we have no measure of
value BY which We can determine even
what our debt is. Raise the national
credit to the highest point by resoly-
ing that every pledge made when we
got the peoples money, shall be con-
scientiously kept. Then when we
have a value currency and all suspi-
cions of national dishonesty are re-
moved, we may borrow money for three
and one-hslf and four per cent. like
England and France.


How the holders of the Five-Twen-
ties are to be induced TO convert q bond
drawing six per cent. payable semi
annually in coin, into one drawing hye
per cent, we do not understand by the
terms of Mr.. Sherman's bill. From
the report of the Senate Finance Com
mittee we gather that it is to be done
by threats of Reputation, or taxation,
which is repudiation according to law,
or by payment in whstthe debtor calls
lawful money, which Is however only
giving for one promise to pay money,
other promises to pay money at snch
time Gs the debtor sees fit. What as
surance will the purchaser of the new
loan have that hewill not be compelled
to convert his Eve per cent consoles
into four per cent consoles by the same
A Government that will cheat
a creditor, OF legislate creditor out of
his interest, will, like Pennsylvania OF
sWindle him out of the
principal of the debt. The honest
policy is the economical policy. We
cannot afford to chest the holders of
the Five-Twenties out of one per cent
1f interest.


The last section of our Senator's bill
70 provide for the so called redemption
n bonds bearing four apd a half per
;ent. interest, of such portion of the
as are held abroad can
,nly be effective through a palpsble |
preach of faith with all foreign credit !,
,rs who have put confidence in u.s.
from six per cent. to a
our and half per cent. bond can new
II be the result of choice. If brought |
bout by threats orcompulsiou-on the
ske-that-or-noshing principle-then it
5 saying 10 foreigners, if you do not
your claims against the Uni
ed States, you viii find US bigger ras-
ais than you think US to be. If there
) to be sale OF the national honor
re should demand higher price than
ne and half per cent. Let US de-
lare by act of Congress to all these
oreign bondholders thst we don't ows
hem anything and derive profit from
ur rascality. As it is, we propose to
ay to them, you should not have Civ
n evidence OF your faith in our hon
sty by.purchasing our securities, but
nould have believed those who
throughout the war declared that We
ever would honestly pay cur debts. All
nemies of the United States, at home
I'D abroad, are united in this common
ray II, that we shall in some way swim
lie the men who provided the money
nat preserved the Nations existance.