pointed out that the government had
never since its organization obtained considerable loans at six per
cent. per annum, except from the Bank of the United States, and these,
on a capital of seven millions, never amounted to seven millions in the
whole. As the amount of prospective loans would naturally raise the
amount of interest, it seemed prudent not to limit the rate of interest
by law; ineligible as it seemed to leave that rate discretionary with
the executive, it was preferable to leaving the public service
unprovided for. For the same reason the loans should be made
irredeemable for a term not less than ten years.

He then repeated a former suggestion, that "treasury notes," bearing
interest, might be issued, which would to that extent diminish the
amount to be directly borrowed and also provide a part of the
circulating medium, passing as bank notes; but their issue must be
strictly limited to that amount at which they would circulate without
depreciation. So long as the public credit is preserved and a sufficient
revenue provided, he entertained no doubts of the possibility of
procuring on loan the sums necessary to defray the extraordinary
expenses of a war. He warned the committee, and through it Congress,
that "no artificial provisions, no appropriations or investments of
particular funds in certain persons, _no nominal sinking fund_, however
constructed, will ever reduce a public debt unless the net annual
revenue shall exceed the aggregate of the annual expenses, including the
interest of the debt." He then submitted the following estimates:--

"The current or peace expenses have been estimated at nine millions
of dollars. Supposing the debt contracted during the war not to
exceed fifty millions and its annual interest to amount to three
millions, the aggregate of the peace expenditure would be no more
than twelve millions. And as the peace revenue of the United States
may at the existing rate of duties be fairly estimated at fifteen
millions, there would remain from the first outset a surplus of
three millions applicable to the redemption of the debt. So far,
therefore, as can be now foreseen, there is the strongest reason to
believe that the debt thus contracted will be discharged with
facility and as speedily as the terms of the loans will permit. Nor
does any other plan in that respect appear necessary than to extend
the application of