1st, That a national debt is public wealth.

"The funded debt of the United States is, in effect, the addition of three thousand millions to the realized wealth of the nation. . . . It is three thousand millions added to its available capital." *

* See pamphlet issued by "Jay Cooke, General Subscription Agent for the Sale of Government Bonds," entitled, " How our National Debt may be a National Blessing." Philadelphia, 1865.

If this is so, it is fortunate, so far as the financial condition of the country is concerned, that the Rebellion took place; that it continued so long, and cost so much. Had it lasted long enough to have made the debt tenfold greater than it now is, the "available capital" of the nation would have been correspondingly enlarged; and, of course, its power of production so much increased. It must be a misfortune, economically considered, that the war closed so early. But let us examine into the truth of the assertion that "a national debt is public wealth."

How was it created, and for what?

It was contracted for war expenditures. The operation was simply this: A certain part of the people, having the ability to do so, furnished the nation with the means to carry on the war. These persons became the creditors of the government, and they now hold the public stocks. All the rest of the people are debtors, and jointly owe the amount of the debt. It is a lien upon estates, personal and real, and must remain so until liquidated. Are those who are the debtors to the bond-holders any richer in consequence of the existence of the public debt? Certainly not: they are just so much poorer. They must subtract from their incomes, each year, so much as they have to pay for interest on the national debt. Are the bond-holders any richer in consequence of the creation of this debt? If they actually loaned money, that is, coin, as some did in 1861, for which they are receiving only the usual rate of interest, they are neither richer nor poorer for the operation. They have got public, instead of private, securities for their funds. If they subsequently loaned mere credit currency, or capital at prices advanced in consequence of the depreciation of the currency, then, in so far, they gained what the government lost; or, rather, what that part of the people lost who must pay the debt and interest. There was no increase of wealth in consequence of the increase of prices, but merely a transfer of commodities from one party to another, without an equivalent.

But "the national debt is public wealth." Then it follows, that, if the national debt were repudiated, the nation would be three thousand million dollars poorer. Is that so? Surely not. The holders of the stocks would be poorer, doubtless, by the amount of their bonds, which entitle them to interest semi-annually, and final payment in gold; but just what they lost their debtors would gain, and the general wealth of the nation would not be affected to the amount of a dollar, except, that, in so far as the debt is due to persons abroad, the repudiation of it would save that amount to the nation. Other than this, neither the security nor the insecurity of the national debt has the least effect in determining the national wealth.

2d, But, again, it is said that "the debt is active, available capital; "and, in illustration, it is said" that a man having, say, twenty thousand dollars of the bonds, can engage in any kind of business at once, just the same as if he had so much cash capital."

Now, what is the fact? The bonds being good securities, the holder can exchange them for cash, and with this can obtain any description of capital he may need. The bonds, then, are not capital, but only the security upon which capital may be had. If the holder had notes against individuals of unquestionable credit, he could do the same. Are private notes, then, capital? Surely not. The man who, having invested his money or capital in public securities, wishes to exchange them again for capital, can do so readily, because the nation is pledged to repayment, with interest. Bonds, while the credit of the government is sustained, are only a very convenient form of credit. They have no element of capital about them. A thousand billions of them would not add a farthing to the capital or wealth of a nation, or increase the productiveness of any department of industry.

So far from aiding production, a national debt has an effect directly opposite. It depresses industry by the taxation it imposes, and reduces its power to compete with other countries. If a laborer pays fifty dollars per annum more for the commodities he consumes, in consequence of taxation occasioned by the interest upon the public debt, then he must have fifty dollars more wages, or reduce his style of living to such an extent as to save that sum. If the former, his higher wages will enhance the cost of products, and he will be less able to compete with the foreign manufacturer or producer.

3d, The third fallacy is, that a public debt gives stability to government.

Upon what should the security of a government depend? Evidently upon the convictions of the people that it is a good government; that it secures to them life, liberty, and the pursuit of happiness. Any people who know they have such a government, will need nothing to assure their loyalty and attachment. Where government rests upon universal suffrage, the power is wholly in the hands of the people, and no law or constitution can have any permanancy, that does not receive their approbation. Any thing that is regarded as oppressive and unjust will certainly be abolished.