7thly. The present rate of exchange is from five to six for one; it must happen that as bills are brought to market to a greater amount they will fall, but if it be considered that the ordinary demand of these States on Europe for goods exceeded four millions sterling annually in times of peace, that the demand at present and for two or three years to come, even if peace should take place immediately, must exceed the former usual demand, that though the cancelling and sinking of fiftythree millions of dollars will tend to appreciate the remainder in circulation, yet as there will still remain in circulation a greater nominal sum than the commerce of these States call for, the appreciation will not be repaid; and if it be further considered, that the merchants in the United States are at present destitute of their usual means of remittance, having neither ships, specie, nor produce on hand,—I say under these considerations it is improbable, if not impossible, consistent with the interest of individuals, that bills drawn on Europe for the sum of four millions sterling should be under three for one on an average.
8thly. Four millions sterling, or $17,777,7772/3, at three for one, will amount to $53,333,333 here. Allowing $333,333 for the charge of drawing the bills, for other expenses and deficiencies unforeseen, and there will be, agreeable to the proposals in the plan, fiftythree millions of dollars of the Continental currency paid off by the sales of those bills.
The benefits resulting from this plan, if realized, are numerous, indisputable, and obvious. As the sum proposed to be drawn for, does not exceed the ordinary amount of importation before the war, it cannot be presumed that this plan can produce any ill effects on commerce, especially if the Congress should think it wise and prudent to drop the merchants themselves, and depend on individuals for their supplies. The capital difficulty is to obtain the loan. On this, as well as on the preceding plan, I will make a few observations after the following calculations already referred to.
FIRST CALCULATION.
| Years. | Produce of the sinking fund at the end of every year. | Total of the Debts paid at the end of every year. | EXPLANATION. |
|---|---|---|---|
| 1 | 1,000,000 | 1,000,000 | The first column marks the years; the second the produce or amount of the sinking fund at the end ofeach year, the third shows how large a part of the capital has been paid off at the end of each year.The sum in the second column is found by adding to it annually the interest of that part of the capital paid off thepreceding year, and the sum in the third by adding yearly the payments. |
| 60,000 | |||
| 2 | 1,060,000 | 2,060,000 | |
| 63,600 | |||
| 3 | 1,123,600 | 3,103,600 | |
| 67,416 | |||
| 4 | 1,191,016 | 4,374,616 | |
| 71,461 | |||
| 5 | 1,262,477 | 5,637,093 | |
| 75,788 | |||
| 6 | 1,338,265 | 6,975,358 | |
| 80,296 | |||
| 7 | 1,418,561 | 8,393,919 | |
| 85,113 | |||
| 8 | 1,503,674 | 9,897,593 | |
| 90,220 | |||
| 9 | 1,593,894 | 11,491,487 | |
| 95,633 | |||
| 10 | 1,689,527 | 13,181,014 | |
| 101,372 | |||
| 11 | 1,790,899 | 14,971,913 | |
| 107,454 | |||
| 12 | 1,898,353 | 16,870,266 | |
| 113,901 | |||
| 13 | 2,012,254 | 18,882,520 | |
| 120,735 | |||
| 14 | 2,132,989 | 21,015,509 | |
| 127,979 | |||
| 15 | 2,260,968 | 23,276,477 | |
| 135,658 | |||
| 16 | 2,396,626 | 25,673,103 | |
| Principal Loan | 25,000,000 | ||
| Surplus | 673,103 |
SECOND CALCULATION.
| $2,500,000 annually collected and paid for sixteen years, amount to (the whole sum paid) | 40,000,000 |
| But the surplus of $673,103 deducted, leaves $39,326,897, the net sum applied to sink a principal of $25,000,000, and the interest for sixteen years, | 673,103 |
| 39,326,897 | |
| The annual interest of $25,000,000 at six per cent is 1,500,000, which at simple interest in sixteen years is 24,000,000, | 24,000,000 |
| Add the principal, | 25,000,000 |
| 49,000,000 | |
| Bring down | 39,326,897 |
| Surplus, | 9,673,103 |
By these calculations it is clearly demonstrated,