idnu Ouke University Libraries Confederate Sta Conf Pam #628 DTTD7D75T3 . ■ 7 CONFEDERATE STATES LOAN. • HOLMES' , PLAN OF ARRANGEMENT. RICHMOND: CHAS. 11. WYNNE, PRINTER, 94 MAIN STREET. 1861. THE WILLIAM R. PERKINS LIBRARY OF DUKE UNIVERSITY Rare Books OBJECTIONS TO A SINKING FUND. 1st. It requires an annual legislative provision of ever- changing legislators, and may therefore be pretermitted. 2d. If provided, the sum may not be applied immediately in redemption of a portion of the debt and reduction of the interest hearing principal. 3d. It may be invested in other securities of fluctuating value, which in a long series of years may be greatly depre- ciated, or even become valueless. 4th. If securely invested, must be sold at the period for redemption of the debt and probably, because in large amounts, at greatly depreciated rates, and consequent loss. 5th. Commissioners of the sinking fund are frequently, if not periodically, changed, and with each varying set there may be a varied policy pursued with the fund. 6th. The places of commissioners every way qualified may be supplied by others in some or all of the requisites totally deficient. 7th. Under the most favorable circumstances it is impossible that the investment of the fund can be punctually and securely made to Accumulate at any required rate of compound interest without loss of time, and consequent loss of interest, so as to produce the exactly mathematically calculated sum that will redeem the debt at the required period of time. 8th. If each and all of the foregoing objections were removed, and the fund Avas properly invested so as to produce the calculated result, still, as much experience has already shewn, sinking funds, when accumulated, have often been diverted by the very government or power which directed its accumulation to objects deemed of pressing necessity, thus defeating entirely the original design. 0th. No purchasing at discount any part of the debt should be contemplated ; the bare idea casts in advance a shadow of suspicion, and the realization of the idea is the substance itself of a depreciated credit — totally unworthy even of an individual, positively disgraceful to a government. HOLMES' PLAN ARRANGEMENT OF CONFEDERATE STATES LOAN. To arrange one hundred millions of dollars, so that hotli the principal and the interest thereof shall be paid in 18 years by thirty-six semi-annual appropriations, each of five millions, t\fo hundred and eighty-eight thousand six hundred and eighty- eight dollars ($5,288,088), or 18 annual appropriations, each of ten millions five hundred and seventy-seven thousand three hundred and seventy-six dollars (^ 10,577,376). If the entire principal of the debt was payable at the expiration of 18 years, and only the interest at the rate of 8 per cent, per annum was payable semi-annually, then the simple interest of 8 per cent, for one year on $ 100,000,000 ■would be eight millions of dollars, and the aggregate simple interest for 18 years would be one hundred and forty-four millions of dollars, $ 144,000,000 To which add payment of the principal, 100,000,000 And in 18 years there would be paid interest and principal, $244,000,000 Whereas by the plan proposed there would in the same time be paid the principal, $ 100,000,000 And all the interest, which would be only 90,392,708 And there would be saved of interest 53,607,232 $244,000,000 Thus saving, in 18 years, fifty-three millions, six hundred and seven thousand two hundred and thirty-two dollars. If the 31100,000,000 bore interest of only six per cent, it ^ould require of simple interest for 18 years §108,000,000 And at the expiration of the time to pay prin- cipal, 100,000,000 Making an aggregate of $208,000,000 Whereas, by the proposed plan, even ■where the interest is 8 per cent, per annum, payable semi- annually, the sum required, as etatcd above, is only 6100,302,768 And the amount saved would, even then, be $17,007,232 By the plan, a certain portion only of the principal and all of the interest on the outstanding balance of the principalj ■would be payable at each period of six months, and the sum required to accomplish this at each period, is the uniform sum of five millions two hundred and eighty-eight thousand six hundred and eighty-eight dollars — making an annual aggregate of $10,577,376. It will be readily perceived that, by the plan, as the interest is diminished at each period of six months, because of the pay- ment on the principal at the preceding period, that therefore the uniform sum appropriated, enables more of principal to be paid at each period than at the next previous period. The rate of interest, the entire time within which the principal is to be paid, and the aggregate amount of the principal of the debt being fixed, it is easy to arrange the plan. In the present instance, the amount of principal, the rate of interest, and the time within which the principal is to be paid, are understood to be those most desirable to the government. The interest must, of course, be punctually paid every six months, from the time the debt is contracted. But the payment of the first portion of the principal may be postponed to any convenient time. When the payment of the princi- pal has once commenced, the plan requires that every six months thereafter, there shall be payable and paid the exact amount fixed for the period. It will be perceived, that if the war debt does not exceed one hundred millions, then the annual appropriation for 18 years to pay both that debt and the interest thereof will be the uniform sum of a little over ten and a half millions of dollars. If to this there was added fourteen and a half millions for the annual expenses of the Government, adminis- tered as it should be upon economical principles, then the aggregate annual revenue for the next 18 or 20 years need not exceed twenty-five millions of dollars. The annual exports to foreign countries, including the United States, may, in time of peace, be reasonably assumed at two hundred and fifty millions, and placing the imports, which are always in excess of the exports, at the same, we have an annual aggregate for both, of five hundred millions, upon which an average annual duty of 5 per cent, would raise the sum required. The duty of ^ of one cent per pound on 4,000,000 of bales of cotton of 450 pounds each, would be $ 2,250,000 — a sum that would pay both the principal and interest of the loan of fifteen millions in ten years, and leave over forty thousand dollars annually to defray the expenses of the operation. One cent per pound on cotton, assuming 1,800,000,000 pounds, would give 18 millions of dollars. The cent per pound would be y'o of ten cents per pound, or if that was the value of cotton ten per cent, upon its value. Extend these figures and remarks to all other productions for export, and we may well congratulate ourselves that our annual products can be ar- ranged to meet our debts and our wants, and that there will be no necessity to call upon citizens for any portion of their capital. JAMES G. HOLMES, Charleston^ South Carolina. 03 O s OQ I o I Iff c 00 tr c 3"' o" 1^ c ec oc --r c^ o t- c; Iff i~ Iff c rj ffi — o cffi— .— — cffi:^.— oecriffl'^XccCCiO X — ' ••s-' i~ c' co' i-T o' "T x' c^* !C o' Iff' o" '»"' o CC'»»iffiO>0C^Ci.— l-eOOiffXOO^-^t^-H C -T :r CC -^ :c — — ct 1^ Iff X l~ -- C X — < :r^ c;_ -^^^ -- c ^ -^ ci CO i- i~ ^_ x x o o ■^ x' fff 1^' ffi' t--' ffi t—' ci x' -!<' c' r- eo' cT x' uo" eo" c — .— lC^c^c<:co'<^■>»•lffcDccl^xxoo ^ •— Iff O CO Iff ^- t~ ^- -* C) CSI O CO t— X CO -^ ^Cicsi-^rtococ^i^'ji^c^xiffiai-i -- eo C Iff S2 C: — ' X (M CI X 1^ CO ' CO co" o of uff -r x' cT co' o — • cT o" — ci CO lo 1^ c CO r^ ~ CO — I- -^ oi o X X- 1^ X o; o ^ CO -^^^ Iff 1^ X o ^ o? 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