The Debates and Proceedings in the Congress of the United States, Seventeenth Congress, First Session, [Volume 2] Page: 1,339
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1339
HISTORY OF CONGRESS.
1340
H. op R.
Exchange of Stocks.
March, 1822.
He thought it was conformable to the views
which the Secretary of the Treasury had pre-
sented in his report, and he, Mr. W., was disposed
to extend it, not only to thirty, but to thirty-six,
millions; and he entered into a statistical exami-
nation of the subject to test the expediency of its
adoption.
Mr. Cambreleng replied, and modified the re-
solution by adding to the amendment as follows:
" Provided, That, in effecting the aforesaid ex-
change, the Secretary shall, in no case, give any
premium."
Mr. Williamson remarked that the subject of
finance, in all its parts, was already important,
and equally difficult to be understood. One need
to have clear views himself, and the attention of
others, else his remarks on such a topic would be
fruitless. This bill proposes the exchange, he
observed, of twenty-six millions of six and seven
per cent, of the loans of the United States, effected
in 1812-13, payable in 1825-26, by a new stock
to be created, bearing an interest of five per cent,
payable in 1821-2-3. In this discussion four con-
siderations present themselves to our view, and
demand our decision: >
1. Is it expedient to make the exchange?
2. For what amount, if any, shall the books be
opened ?
3. At what time shall they be opened and
closed; and,
4. When shall the new stock, if any be created,
become due? These are the four points to be
considered.
In respect to the first, he thought it was expe-
dient to make an exchange. In 1812-13, the
United States were involved in a war with one of
the most, powerful nations upon earth. The de-
mands and pressure on the Government were
great; it must have had money;'to procure which
loans were opened, and the money procured at a
rate per cent, interest which showed at that time
the unfortunate condition of public credit. Of the
loan at six and seven per cent, effected in 1812, he
remarked,, there will be due and redeemable, in
1825, upwards of seventeen and-a-half millions of
dollars; and of the loan effected in 1813, at six
per cent., there will fall due and redeemable, in
1826, near twenty-two and-a-half millions; so that
upwards of forty millions are redeemable those
two years. The first question is, Will this Gov^
ernment be able to meet and pay off that sum in
1825-6? He thought not. The Secretary of the
Treasury, and others who have passed the reve-
nue and expenditure under their view, think not.
What, then, is the best provision which can be
made in the premises? It is very truly stated
that the credit of the Government is now high '
perhaps never higher. A promissory note, that is,
the paper security of the Government of the Uni-
ted States is always more valuable, will sell
quicker, and for a larger sum, as the length of
time intervenes between the date and pay-day;
because, as the interest is always paid quarterly'
and as the capitalists do not want the trouble of
often vesting their money, or exchanging the in-
vestment, provided it lies safe. Hence, at the
present moment, $10,000 of Government paper,
bearing five per cent, interest, and payable ten
years hence, interest demandable quarterly, would
now bring as many dollars in specie, and also a
considerable premium. In 1812-13, Government
security, at six, and at one moment, seven per
cent only, would command the cash, though the
day of pay was fixed at thirteen years then future.
The reason was, money was commanding high in-
terest; the credit of Government was low; changes
great abroad, and we were compelled to borrow,
and capitalists took the advantage. The tables
are now turned; our credit is good—never better;
and money, being plenty, commands only a low
interest. It is said a stock at five per cent, inter-
est, payable 1831-2-3, will bring in, by way of
exchange, the demands of six per cent, against the
United States, which are payable in 1825-6. Why
not, then, make the exchange ? It will be saving
the difference of at least one per cent, on the sixes,
and two on the sevens, for three or four years;
and it cannot be safely calculated that our Gov-
ernment will be able to pay them off when they
become due.
A second question is the amount. If a loan be
opened for exchange, for what sum ought it to be ?
T he bill proposes twelve millions of the loans of 1812
and '13, so as to embrace all that on which seven
per cent, interest is payable, and so much of the
loan bearing six per cent, as will, together with
the former, amount to twelve millions; leaving due,
to be paid by Government, during the year 1825,
the residue of what will fall due that year, name-
ly, about five millions and a half. Can this latter
sum be paid those years, besides meeting the other
charges on Government ? The past and present
state of the revenue does not prophecy such ability.
We cannot do it. Gentlemen do hardly suppose
it.^ Why not then open the exchange for the
whole which will fall due that year, viz: about
seventeen and a half millions, instead of twelve
millions? If this reasoning be correct, then how
will the Government be able, probably, to pay off
twenty-two millions and near a half, which fall
due in 1826? It would be remarkable to enter-
tain calculations that we then may deal in the
commodity of miracles. I would go in this ex-
change as high as the amendment proposes, which
is thirty millions, and then about ten millions will
be due those two years—quite as much of the public
debt mentioned as we shall be able to meet.
Another and third question arises in this diffi-
cult business—When shall the books be opened, if
opened at all? The bill proposes October, the
amendment April. If the credit of the Govern-
ment paper be, as stated, good, so high in market,
why not embrace the present moment 1 Is it not
the proper time? What advantage by delay?
Mighty events, which are by many anticipated ;
changes in the mercantile world, always affect
money matters. When the loans were effected, it
was a season of extremes; the present is another,
diametrically opposite. Thegentleman from Mary-
land says, some of the sixes and sevens are owned
in Europe, and a short time would not give them
an equal chance to make the exchange. Such, if
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Gales and Seaton. The Debates and Proceedings in the Congress of the United States, Seventeenth Congress, First Session, [Volume 2], book, 1855; Washington D.C.. (https://digital.library.unt.edu/ark:/67531/metadc30366/m1/48/: accessed April 19, 2024), University of North Texas Libraries, UNT Digital Library, https://digital.library.unt.edu; crediting UNT Libraries Government Documents Department.