FINANCES OF THE UNITED STATES. 



tary of the Treasury, who shall thereupon issue to the 

 holders an equal amount of bonds of the United States, 

 coupons or registered, as may by said holders be de- 

 sired, bearing interest at the rate of six per centum per 

 annum, payable semiannually, and redeemable at the 

 pleasure of the United States after five years, and pay- 

 able twenty years from the date thereof; and such 

 United States" Notes shall be received the same as coin 

 at their par value, in payment of any loans that may 

 be hereafter sold or negotiated by the Secretary of the 

 Treasury, and may be reissued from time to time as 

 the exigency of the public interests may require. 



SEC. V. And be it further enacted, That to enable the 

 Secretary of the Treasury to fund the treasury notes 

 and the floating debt of the United States, he is hereby 

 authorized to issue on the credit of the United States, 

 coupon bonds or registered bonds, to an amount not 

 exceeding $500,000,000, and redeemable at the pleas- 

 ure of the United States after five years, and payable 

 twenty years from date, and bearing interest at the rate 

 of six per centum per annum, payable semiannually. 

 And the bonds herein authorized shall be of such de- 

 nominations, not less than $50, as may be determined 

 upon by the Secretary of the Treasury. And the Sec- 

 retary of the Treasury may dispose of such bonds at 

 any time, at the market value thereof, for (lawful 

 money) the coin of the United States, or for any of 

 the treasury notes that have been, or may hereafter 

 be, issued under any former act of Congress, or for the 

 United States notes that may be issued under the pro- 

 visions of this act ; and all stocks, bonds, and other 

 securities of the United States held by individuals, 

 corporations, or association^ within the United States, 

 shall be exempt from taxation by order or under State 

 authority. 



SEC. 3. And be it further enacted, That the United 

 States notes and the coupon or registered bonds au- 

 thorized by this act shall be in such form as the Secre- 

 tary of the Treasury shall direct, and shall bear the 

 written or engraved signatures of the Treasurer of the 

 United States and the Register of the Treasury, and 

 also, as evidence of lawful issue, the imprint of a copy 

 of the seal of the Treasury Department, which imprint 

 shall be made under the direction of the Secretary, 

 after the said notes or bonds shall be received from the 

 engravers, and before they issue ; or the said notes and 

 bonds shall be signed by the Treasurer of the United 

 States, or for the Treasurer by such persons as may be 

 specially appointed by the Secretary of the Treasury 

 for that purpose, and shall be countersigned by the 

 Register of the Treasury, or for the Register, by such 

 persons as the Secretary of the Treasury may specially 

 appoint for that purpose ; and all the provisions of the 

 act entitled " An act to authorize the issue of treasury 

 notes," approved the 23d day of Dec., 1857, so far as 

 they can be applied to this act, and not inconsistent 

 therewith, are hereby revived and reenacted ; and the 

 sum of $300,000 is "hereby appropriated, out of any 

 money in the Treasury not otherwise appropriated, to 

 enable the Secretary of the Treasury to carry this act 

 into effect. 



SEC. 4. And be it further enacted, That the Secre- 

 tary of the Treasury may receive from any person or 

 persons, or any corporation, United States notes on de- 

 % posit for not less than thirty days, in sums of not less 

 *than one hundred dollars, with any of the assistant 

 treasurers or designated depositaries of the United 

 States authorized by the Secretary of the Treasury 

 to receive them, who shall issue therefor certificates 

 of deposit, made in such form as the Secretary of the 

 Treasury shall prescribe, and said certificates of deposit 

 shall bear interest at the rate of five per centum per 

 annum ; and any amount of United States notes so 

 deposited may be withdrawn from deposit at any time 

 after ten days' notice on the return of said certificates : 

 Provided, that the interest on all such deposits shall 

 cease and determine at the pleasure of the Secretary of 

 the Treasury ; and provided further, that the aggregate 

 of such deposits snail at no time exceed the amount 

 of twenty-five million dollars. 

 SEC. 5. And be it further enacted, That all duties on 



imported goods which shall be paid in coin, or in notes 

 payable, or in demand notes, heretofore authorized to 

 be received and by law receivable in payment of public 

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

 fund, and applied as follows : 



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

 bonds and notes of the United States. 



Second. To the purchase or payment of one per cen- 

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

 within each fiscal year after the first 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 Secretary 

 of the Treasury shall, from time to time, direct. 



Third. The residue thereof to be paid into the Treas* 

 ury of the United States. 



This very important law produced an entire 

 change in the currency. It provided for 150 

 millions of legal tender paper money, which was 

 available for all purposes of currency except 

 custom duties and interest on stock, both of 

 which were to be paid in coin. The outstand- 

 ing $60,000,000 of demand notes, by the acts of 

 August and February 12th, were receivable for 

 customs. Hence gold could not be realized for 

 duties until those notes should be absorbed. 

 They were by the law endowed with a specific 

 specie value, since they were alone a substitute 

 for specie at the custom house. The new is- 

 sues of demand notes being a legal tender, at 

 once took the place of gold as a means of re- 

 demption for bank notes, and thus relieved the 

 banks from the dilemma in which under the 

 State laws they had been placed by the act of 

 suspension. When compelled to forego specie 

 payments they contracted their obligations, 

 and made efforts to place themselves in a posi- 

 tion speedily to resume. The contraction of 

 the currency thus brought about added to the 

 difficulties of the moment. As soon, however, 

 as a flood of Government paper was authorized 

 as a tender in lieu of specie, the banks renewed 

 their expansive movement, and began to in- 

 crease their circulation. The 60 millions of 

 old notes which they had at first refused to re- 

 ceive at all, and then tolerated when they 

 could be deposited with the Government, now 

 became in active demand. 



The banks would no longer deposit them 

 with the Treasury without a stipulation that 

 they should receive back the same kind of 

 notes, and as some time must necessarily 

 elapse before the new notes could be got ready, 

 this stipulation was agreed to. When the 

 banks suspended and specie rose to a premium, 

 it immediately ceased to circulate, and began 

 to disappear altogether. This fact caused great 

 inconvenience, since, there being no Govern- 

 ment notes less than $5, and the banks not 

 disposed to increase their issues, the want of 

 small circulation was urgently felt. As soon, 

 however, as, by the law of Feb. 25th, the banks 

 were allowed to redeem their circulation in the 

 Government no-ies, they began eagerly to supply 

 small currency. 



The wants of the Treasury for the moment 

 continued very pressing, notwithstanding the 

 large supplies granted by the law of Feb. 25th, 

 because some weeks must elapse before adequate 



