The Debates and Proceedings in the Congress of the United States, Seventeenth Congress, First Session, [Volume 2] Page: 1,351
This book is part of the collection entitled: Annals of Congress and was provided to UNT Digital Library by the UNT Libraries Government Documents Department.
Extracted Text
The following text was automatically extracted from the image on this page using optical character recognition software:
1351
H. op E.
HISTORY OP CONGRESS.
1352
Exchange of Stocks.
March, 1822.
result be, that the revenue of the country will be
increased 1 A prosperous commerce will fill the
Treasury. From the commencement ol this Gov-
ernment to the present moment, has not experience
shown, that the income of the nation has been
Graduated by its commerce'? Does commerce
flourish 1—then your Treasury is replenished. Is
it depressed ?—the Treasury is in want of money.
If then our commerce is to be so flourishing and
extensive, as to absorb all the capital of the coun-
try the Treasury will be furnished by the customs
with the means of paying this debt. In any as-
pect, therefore, in which this subject can be viewed,
it was inexpedient to adopt the plan of converting
the present outstanding stock into stock irredeem-
able for periods so long as those fixed in the bill
now under consideraton.
Mr. T. said, he did not understand this subject
'very intimately, much less did he feel disposed to
dictate a course to be pursued in relation to this sub-
ject; but it seemed to him that the mode most ex-
' pedient for the Government was, to defer the whole
matter until 1825, when the war loan of 1813 will
/be payable, and then, if no other mode could be de
vised for its discharge, to go
into the market with
a loan for such portion of that stock as the Gov-
ernment shall not then possess means to pay.
Should this course be adopted, a fair competition
would be afforded, not only to the holders of stock,
as proposed by the present bill, but you would
avail yourselves of the additional competition
created by the capital which moneylenders might
wish to invest in stock. In my judgment, said he,
this is the proper course for the Government—it is
the fair and honorable course, and one which will
preserve the Government from the imputation of
stockjobbing, to which the amendment in its ope-
ration would render it liable. Mr. T. said, he
was gra tified to perceive, that, in the opinion which
he had just expressed, he was supported by the
Secretary of the Treasury, given to this House in
iis annual report, who might be considered as
having some little knowledge on this subject, as
well as the honorable gentleman, by whose amend-
ment the only valuable feature of the bill had been
destroyed.
Mr. T. referred to the report of the Secretary of
the Treasury, for the purpose of showing, that,
should such an exchange of stocks be deemed inex-
pedient or impracticable, " a saving of equal, if
' not.greater extent, may be effected in the years
' 1825, 1826,1827, and 1828, by borrowing, at the
' rate of 5 per cent, in the first and each successive
' year, a sum equal to the difference between the
' amount redeemable and that portion of the Sink-
' ing Fund applicable to its redemption; and thus
' a saving be secured to the extent of that differ-
' ence by the latter process." There is, said he,
much wisdom in this plan. You borrow the mon-
ey when you want it; you pay off your -debt at
par; and by going into the market with a loan of
a small amount you will probably secure a high
premium. But what does the amendment pro-
pose? To bring into the market $26,000,000 of
5 per cent, stock at one time. Does not every one
know that the effect of throwing into market such
an immense amount of stock, at a given period,
would be to diminish the value of it ? T he amend-
ment is indeed framed upon the idea that a pre-
mium is to be obtained on stock when there is
1826,000,000 in market. Sir, said he, this idea is
perfectly fallacious, not to say visionary. The
stockholders"and brokers understand this matter;
they know that by sending a large quantity of a
given article into market you reduce its price; and
depend upon it, sir, their conduct will be influ-
enced by that knowledge.
But this is not the most objectionable feature of
the bill, as amended. A general subscription of
stock is authorized by that amendment, without
designating the particular stock to be received.
What is the consequence 1 What every man who
examines the subject with the least attention can-
not fail to understand. The stock which is the
least valuable—the 6 per cent.—will be subscribed,
and the 7 per cent, left unextinguished, and bear-
inn- interest until it shall become payable, and the
Government be in possession of the necessary
funds to discharge it.
In this, Mr. T. said, consisted the decided supe-
riority of the bill reported by the Committee of
Ways and Means over the amendment under con-
sideration. The bill reported by that committee
wisely requires that the $8,606,355 27 of 7 per .
cent, stock shall be exchanged and extinguished.
The amendment leaves it optional with the hold-
ers to subscribe that or any other stock. The 7
per cent, stock is at $109, while the 6 per cent, is
at $106. Will the holders of stock then continue
to hold their 6 per cent, and surrender the 7 per
cent. 1 He did not believe the stockholders would
be guilty of such folly. They understand plain
arithmetic, and will by a very easy process arrive
at the result, that, by surrendering the 7 per cent,
in lieu of 6, they must inevitably lose 4 per cent.
Will they do it'? They are not apt to disregard
their own interest; certainly they are not blind
to it.
There were other views which might be taken
of this subject, Mr. T. said, but that which he had
attempted to present to the House would induce
him to vote against the bill.
After Mr. Tomlinson had concluded his re-
marks—
Mr. D wight, of Massachusetts, rose and observed
that he had on yesterday voted in favor of the
amendments (postponing still further the redemp-
tion of the new stocks) which had been proposed
by the gentleman from Pennsylvania, (Mr. Mil-
nor,) and which were adopted by the House.
He now moved to reconsider that vote, and briefly ,
stated the reasons which had induced him to
change that opinion. He thought it was a sound
rule in public as well as in private affairs to defer
payment of debts no longer than necessity requires;
and he had become satisfied that in 1831, 1832,
and 1833, we should be able to pay off these debts,
and he was therefore unwilling to extend them
beyond those periods. There were but two rea-
sons, he said, which had been or he thought could
be urged in favor of the amendments of the gen-
tleman from Pennsylvania—the first, that the re-
Upcoming Pages
Here’s what’s next.
Search Inside
This book can be searched. Note: Results may vary based on the legibility of text within the document.
Tools / Downloads
Get a copy of this page or view the extracted text.
Citing and Sharing
Basic information for referencing this web page. We also provide extended guidance on usage rights, references, copying or embedding.
Reference the current page of this Book.
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/m1/54/: accessed April 18, 2024), University of North Texas Libraries, UNT Digital Library, https://digital.library.unt.edu; crediting UNT Libraries Government Documents Department.