I had early foreseen that the Public Debt could be paid without much delay, and without a system of oppressive taxation. In July, 1863, in the introduction to my volume on the tax system of the country, I had predicted that the revenues would be equal to the payment of interest on a debt twice as large as the Public Debt then was, together with large annual payments of principal. I predicted also that these payments would menace the national banking system. My scheme looked for the perpetuation of that system for fifty years at least. The banks looked upon the scheme as a hostile project and they were therefore led to defeat a measure which in fact was liberal in the extreme. At that time the capital of all the national banks was limited to three hundred million dollars. Thus did the banks defeat a measure which was designed to secure their perpetuity and calculated to promote their financial interests. They acted upon the idea that the credit of the country could never be so far advanced that a four per cent bond would be worth par. The success of the five per cent loan of 1871, of which I give a full account elsewhere, should have ended the contest in regard to the credit of the United States. A five per cent bond had been sold at par in the London market. The principal of the Public Debt was undergoing a monthly reduction and the gain in the interest account was sufficient to guarantee the payment of the principal in half a century. From that time forward, the leading bankers of Europe and American were ready to co-operate in placing the remaining five per cents, and then the four and a half and four per cents.