Year: 1870

oAS"s No~A VI bpCCulutiOA uuA ouAiOty up w
how far 1t Is likely to go-whether it will come
to par with currency-and what will be the
consequences. OF course those who are in
debt or who have large stocks Of goods or
securities on hand which have been purchased
ut high currency prices are trembling, while
the creditor class Of the community are exult-
Ing at the prospect. Every one argues upon
the probable future course Of the gold market
according to his wishes or interests. Nor is it
easy to form an opinion as to how far gold
may decline or what reaction may take place.
At the present time there is plethora of the
precious metals in the great financial centres
Of Europe. They have been accommodating
largely in the Banks Of England and
France, and money Is 80 abundant
that it is loaned at two and half per cent in
terest. This plethora and the expectation Of
United States securities abroad, with the large
amount Of products exported, prevent drain
of gold from this side. Here is the real secret
of the fall of gold just now. As long as the
cotton crop and other products are going out
and large amount of bonds are exported to
balance the trade against us there will be no
demand for gold. Another cause is found, too,
for the equalization of trade and value Of the
precious metals in the operation of the tele-
graph, which brings the commercial nations
Of Europe and the United States in instant
communication. But we have yet to see to
what extent and how long the expectation Of
our products and bonds will pay for our i'm
portations. If we knew that we might form
an opinion as to the price of gold in the future.
We must not forget that the more bonds 60
abroad the larger the debt on the other side
becomes-the greater will be the demand for
specie hereafter to pay the interest. At the
same time should peace continue in Europe
and money remain so abundant there, large
sums may be sent to this country for invest
ment, and thus help to increase our products.
1t is not wise, therefore, to jump at conclu-
sions from the present state of things.


1t has been said that the efforts made in
Congress to fund the debt have also had an
effect upon the gold market; but we think that
is not SO. The credit Of the government has
been raised by other causes. The high rate
of interest the debt bears has been one of the
principal causes of that extraordinary demand
for our bonds abroad which has stopped the
outward flow Of gold. Should Mr.. Sherman's
Funding bill-which reduces the rate of in
terest-be passed we may see another state
of things. No one can tell what the immediate
effect would be; nor can we yet say in what
shape the bill viii be passed, if passed at all.
The discussion of it in the Senate seems in
terminable. Few Senators understand the
subject. Nearly every one has different
plan for funding the debt. There seems to be
great difficulty in agreeing upon any measure.
Perhaps the best thing that has been said in
the Senate during the debate was by that
practical old Senator Simon Cameron. He
remarked that the consideration Of the question
should be postponed for year. Looking at
the want Of knowledge on this important mat
ter in Congress, at the steady decline of gold
and at the financial prospect before u.s. this
course, probably, would be the best. Funding
the debt is a measure of such great impor-
ance that sufficient time should be allowed to
bring it to maturity. Nor is there any neces-
sity for immediate action. The national finances
are in good condition and Will not suffer by
the delay.


The principal object in this Funding bill
debt. To this end three classes OF new securi-
ties or consols are proposed as substitute for
the present bonds of different denominations,
or to be put on the market for furnishing the
means to extinguish the different forms Of in
debtedness now existing. First, four hundred
millions Of ten n-twenties-that is, bonds re-
deemable in coin at the pleasure Of the govern
ment at any time after ten years and payable
in coin twenty years from date-are to be
issued, bearing five per cent interest These
are to be used for the redemption Of the exist
ing fve-twenties, bearing six per cent interest,
but can only be exchanged at par. So, in
point of fact, the proposition is limited to an
exchange Of ten-twenty five per cents for five
twenty six per cents. This is good PROPOSE
tion if it can be carried out, for one per cent
interest would be saved. The inducement
offered to bondholders to exchange their six
per cent bonds for five per cents is in the longer
time the latter will have to run, in the exemp-
ton from taxation by national State munich
pal or local authority, and in the coupons being
made conveniently payable at different points
abroad as we'll as at home. Second, another
class of bonds or consols are to be issued,
bearing four and half per cent interest,
to the amount Of four hundred mil
lions, on the same conditions, and these
are to be ifteen-thirties. The snppostion
is that bonds having fifteen years to run be-
fore redemption and then payable in coin at
the pleasure of the government thirty years
from date, would be as good as the six per
cents now due, or about to become due.
Third four hundred millions more at four per
cent interest, and having from twenty to forty
years to run, are to be issued, with the same