Year: 1866

RUH 30, l866.-WITH SU
The Loan Bill Before the senate.


The Loan bill as amended in the House Of


Representatives now lies before the Senate for
the action of that body. Under ordinary cir


cumstances looking at the bill in its present
form, we might expect the Senate would pass
it as 1t is, or without any material modification
It is the best measure that could be obtained,


perhaps, at the present time, and it IL to be


hoped that the Senate will regard it in that


light But it is possible the political efferves-


ence in Congress just now may have some in


fuence on the question. Still this is in no re-


spect political measure touching the differ


cences between Congress and the President, and


ought not to enter into them. The vote on


the bill in the House was not . party vote, and


there is no reason why 1t should be 20 in the


Senate. That body, then, should take it up


simply as a financial measure, apart from an


administration or decentralization policy,


and dispose of 1t accordingly for the best in


terests of the country.


The object of the Loan bill is to enable the


Secretary to meet the obligations Of the gov


eminent which will become due during the


present and next year. The whole amount OF


these short time bonds and other Treasury OBJ


legations will be about eleven hundred mil
lions. These have to be met either by renewal


or by substituting another kind of indebted
ness. The proper way is to fund the debt, and


we suppose it will be funded. 1t would serve
no purpose, and would only create future en-


barrassment, to keep this debt floating. But in


funding the Secretary should take care not to


benefit the bondholders at the expense Of the
public. Or rather, Congress ought to pre-
scribe rules to prevent this being done. It
would be better, indeed, to fund the whole
national debt, to make it Of a uniform charac-
ter, to fix the rate of interest equitably, taking
into consideration the rate at which the differ
ent forms of the debt was taken and the value
in gold now, and to establish at the same time
a sinking fund. The debt thus consolidated, and
having twenty, thirty, forty years or longer to
run, would be increased in value to the
holders, just as United States skies having
twenty years to run are higher in the market
than those having ten years to run. In fund
ing the debt, therefore, or even in extending
it, the people, and not the bondholders, ought
to be benefited. The rate of interest should
be decreased in corresponding degree. Nor
ought those who bought the debt at fifty cents
in gold on the dollar expectto draw six per cent
in gold on this amount when specie payments
shall be resumed. That would be really maxi
ing the public pay twelve per cent to these


bondholders on the amount received from


them. We have no doubt they will cry out,
ike Shylock, for the pound Of fesh-for the
full amount Of the bill in coin for which only
half the value was received They win doubt
less denounce the proposition we make as
rcpudiation. Bnt Is it soi Is it not equity?
All nations have laws against usury. A mode
rate rate Of interest on money loaned is only
legal. Why, then, should the public pay twelve
per cent on the amount loaned to 1t? Yet this
would be the case II we continue to pay six
per cent in gold when we return to specie
payments on loans that were made at a rate


worth fifty cents in gold. It is simply . mat
ter Of equity-of Justice to the taxpaying
people, and sound policy. England and other
nations consolidated their debts and reduced
the rate Of interest Why should not wet


The extraordinary power asked for by the


Secretary Of the Treasury. and granted by the


bill originally, was very properly refused by
the House. The proposition to give to any


one man, however exalted pure and able,
power to contract the currency at his will and
to any extent he might please, was monssrous
one. 1t placed the whole business and proper
ty Of the country in his hands. By the stroke
Of his pen he could have reduced the property
of every man ten, fifteen, twe-ty per cent or
more; involved everybody in bankruptcy, and
plunged us into unparalleled financial diff
culties. The amended bill, which passed
| the House by the large vote of eighty
eight against fiffy-eight, deprives him of tina;
power. The utmost he can do under this


amended bill in the way of contraction before
Congress will meet again, in December, is to
withdraw eighteen millions of legal tenders
| from circulation. This, out of currency OF
eight or nine hundred millions, is not much,
and would produce scarcely a perceptible


effect Besides, there will probably be an in
crease Of the national bank circulation to a
corresponding amount, or more. In the mean
time we may expect that both Congress and
the public will become more enlightened upon


the subject If the Senate should pass the bill
In Its present form, then we may feel ourselves


safe for the present from any great financial
convulsion or arrangement from this cause.


The bondholders, Of course, are clamorous
for an immediate resumption of specie pay
menta They have immense influence, too, and
are using II in every direction to force
specie payments 1t would add Immediately


more than twenty-five per cent, at the