It seems nearly impossible to teach Southern financiers that a
nation when compounding with its creditors should reduce the capital of its debt, and not the interest. All reports from Spain, for instance, point to a coming liquidation of her Debt, and all contain the same proposal, that she should pay 1 percent. instead of 3 in cash, and, the rest in bonds, thus leaving the total to be paid off as large as ever, while incurring all the risk of repudiation. It would be far wiser to reduce her /300,000,000 of debt to the more manageable sum of 2100,000,000, at 10 per cent., and claim permiseion, after, say, 20 years or leas, to buy up the debt at market price. The savings of the State might then gradually extinguish its debt, which is impossible if its nominal bulk is steadily increased. The English Colonies have all acted on the wiser plan, and are all more trusted than France.
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