I have made these remarks with hesitation, but in order to prepare the way for the bill which I have introduced. It was my duty to show why the propositions of the Secretary were not sufficient for the occasion, and this I have tried to do simply and frankly. It is long since I avowed my conviction that specie payments should be resumed; and I should now do less than my duty, if I did not at least attempt to show the way which seems to me so natural and easy. While the present system continues, we are poor. The payment of the national debt and the accumulation of coin in the Treasury are the signs of unparalleled national wealth, but our financial condition is not in harmony with these signs. The latest figures from the Treasury are such as no other nation can exhibit. From these it appears that the amount of bonds purchased since March 1, 1869, for the sinking fund was $22,000,000, and the amount purchased subject to Congress $64,000,000, being in all $86,000,000.[210] The same proportion of purchase for January and February would be $23,000,000, making a sum-total of $109,000,000 for one year. And notwithstanding this outlay, we find in the Treasury, January 1, 1870, in coin no less than $109,159,000, and in currency $12,773,000, making a sum-total of $121,932,000. And yet, with these tokens of national resources manifest to the world, our bonds are below par, and our currency is inconvertible paper. This should not be permitted longer. With all these resources there must be a way, even if we were not taught that a will always finds a way.
The refunding of an existing loan implies two distinct and independent transactions: first, the extinction, by payment in some form, of the existing loan; and, secondly, the negotiation of a new loan to an amount equal to that extinguished.
The bill now before the Senate contemplates the prompt extinguishment of the Five-Twenties of 1862. But I would not have this important work entered upon until the Government is fully prepared to say, that, after a certain period of notice, say six months, in order that distant holders in Europe may be advised, interest on the Five-Twenties of 1862 shall cease, and the bonds be forthwith redeemed in coin. There should be no coercion of any kind upon any holder, at home or abroad, to induce the acceptance of a substitute bond. I am happy to believe, that, with the judicious use of five per cent. Ten-Forties, all the coin necessary for such independent action may be assured in advance. Believing that such five per cent. bonds will be regarded by investors as preferable to coin, I would give the holders of the old bonds the first opportunity to subscribe for the new. Those who elect coin will make room for others ready to give coin in exchange for such bonds.
If we look at the practical consequences, we shall be encouraged in this course. The refunding of the sixes of 1862, being upward of five hundred millions, in fives, as authorized by the first section of the bill, contemplates the payment from present funds of little more than fourteen millions, being the excess of Five-Twenties above the five hundred millions provided for. The annual reduction of interest on that loan will be $5,886,296. The substitution of three hundred millions of fours for a like amount of sixes, as provided in the bill, will operate a further saving of $6,000,000, making a sum-total of $11,886,296, or near twelve millions. There will then remain but $129,443,800, subject to redemption, being Five-Twenties of 1864.
During the year 1870 the further sum of $536,326,200, being Five-Twenties of 1865, will fall within the control of the Government, when, as it seems to me, and according to the contemplation of the bill, the credit of the Government will be at such a pitch that five hundred millions can be refunded in four and a half per cents., with the addition of thirty-six millions paid from the Treasury,—thus insuring a further annual reduction of $9,679,572, or a total annual saving of $21,565,868, of which about twelve millions may be saved during the current year.
Here for the present we stop. Our interest-paying debt cannot be further ameliorated before 1872, when three hundred and seventy-nine millions, being Five-Twenties of 1867, will become redeemable, and then in 1873, when forty-two millions, being Five-Twenties of 1868, and constituting the balance of our optional sixes, will become redeemable,—all of which I gladly believe may be refunded in the four per cents. provided by the present bill, to be followed in 1874 by a reduction of the original Ten-Forties into similar bonds.
I would remark here that the bill undertakes to deal with the whole disposable national debt. The amounts which I have given will be found in the Treasury tables of January 1st, and are irrespective of the sinking fund and invested surplus.
From these details I pass to consider the bill in its aims and principles.