256 



FINANCES OF THE UNITED STATES. 



The internal revenue receipts, largely in- 

 creased over those of the previous year, are 

 derived principally from spirits, tobacco, fer- 

 mented liquors, adhesive stamps, banks and 

 bankers, as will be seen by the following table: 



PRINCIPAL ARTICLES. 



RECEIPTS FOR YEAR ENDING 

 JUNE 30. 



It will be noticed that the net expenditures 

 were less than the net receipts in the amount 

 of $65,883,653.20, and this surplus represents 

 the actual reduction of the debt, taking into 

 account the cash in the Treasury. 



This surplus, together with $8,084,434.21, 

 drawn from the cash balance of the Treasury, 

 was applied mainly to the purchase and re- 

 tirement of interest-bearing obligations of the 

 United States, which will reduce the future an- 

 nual interest charge $4,139,797.50. The Sec- 

 retary of the Treasury, in his annual report to 

 Congress, estimates that the receipts for the 

 current fiscal year ending June 30, 1881, will 

 amount to $350,000,000, and the total expendi- 

 tures to $260,000,000, leaving an estimated sur- 

 plus of $90,000,000. 



The receipts to December 31, 1880, one half 

 of the fiscal year, have amounted to $179,383,- 

 584.30, and the payments during the same pe- 

 riod to $139,618,839.87, leaving a surplus for 

 the half-} ear of $39,764,744.43. This indicates 

 that the surplus of $90,000,000, estimated for 

 the year, will be obtained, should the relative 

 increase of the receipts as compared with last 

 year be maintained. 



The expenditures as stated, however, do not 



include any amounts to be applied to the pur- 

 chase of the debt for the sinking fund as re- 

 quired by law. Section 5 of the act of Febru- 

 ary 25, 1862, provides as follows: 



SECTION 5. And be it further enacted. That all du- 

 ties on imported goods shall be paid in coin, or in 

 notes payable on demand heretofore authorized to be 

 issued and by law receivable in payment ofpublic dues, 

 and the coin so paid shall be set apart as a special fund, 

 and shall be applied as follows : 



1. To the payment in coin of the interest on the 

 bonds and notes of the United States. 



2. To the purchase or payment of one per centum 

 of the entire debt of the United States, to be made 

 within each fiscal year after the 1st day of July, 1862, 

 which is to be set apart as a sinking fund, and the in- 

 terest of which shall in like manner be applied to the 

 purchase or payment of the public debt, as the Secre- 

 tary of the Treasury shall from time to time direct. 



3. The residue tliereof to be paid into the Treasury 

 of the United States. 



"While the war continued, and the expendi- 

 tures exceeded the receipts (excluding loans), 

 the second of the above requirements was not 

 carried into effect, as it would have been ab- 

 surd to purchase outstanding debt for a sink- 

 ing fund, and at the same time to issue bonds 

 to meet current expenses. 



In August, 1865, the debt reached its maxi- 

 mum. Every year since that time there has 

 been a surplus revenue, and a consequent re- 

 duction of debt, as follows : 



Statement showing the net receipts, net expenditures, 

 and surplus revenues of the Government for each 

 fiscal year from 1866 to 1880, inclusive. 



The surplus arising from 1866 to 1869 was 

 partly held in the Treasury, increasing the cash 

 balance from $88,218,055.13 to $149,502,471.- 

 60 ; the remainder was applied to the purchase 

 of various kinds of securities mainly issued dur- 

 ing the war of the rebellion, some of which 

 after purchase were held intact, the interest 

 accruing thereon being reinvested in the pur- 

 chase of the debt, as required by the sinking- 

 fund act. By this means, the principal of the 

 debt was reduced from $2,844,649,626.56 to 

 $2,588,452,213.94. 



The bonds purchased still appeared on the 

 books and in the reports of the Treasury as 

 outstanding, though in fact owned by the Gov- 

 ernment. 



