FINANCES OF THE UNITED STATES. 



465 



extraordinary operation produced the greatest 

 surprise. It will be borne in mind that the 

 Secretary had these notes on hand more than 

 one year, and then suddenly offered them at 6 

 days' notice, and then not being able to wait 

 even that six days for his money, borrowed it 

 in a manner to raise the rate of money in the 

 market against his own operation. The loan sold 

 for less than it would have done had not the Sec- 

 retary thus wantonly disturbed the market. Of 

 the 12 millions asked for 10 were taken in New 

 York, one in Boston, and one in Philadelphia. 

 It now appeared that the Secretary was alarm- 

 ed ; he had borrowed the money of the banks 

 to pay back in 6 days, and he was dependent 

 upon the loan to enable him to keep his con- 

 tract. If now the parties to the loan took ad- 

 vantage of the position, they might dictate such 

 terms for the loan as they thought proper. To 

 avoid this danger, the Secretary put all the print- 

 ing presses in his employ to running upon large 

 denominations of demand notes, by which he 

 might be able to manufacture enough to meet 

 the temporary loan if the TYo- should not be 

 taken. The bids were however opened on the 

 17th of November, and it was found that in all 

 $29,994,350 had been offered at rates varying 

 from par to 4J premium. The lowest offers 

 came in from Massachusetts. It resulted that 

 $350.000 were allowed to Boston at 3| to 4 per 

 cent. About $1,000,000 to Philadelphia at 

 3.10 to 4J per cent, ; $1,200,000 to Washington, 

 at 3.05 to 4 per cent., and the remainder to 

 New York, at 3.05 to 4.05 per cent. All bids 

 above 3.05 amounted to $9,505,050, and were 

 accepted, and those who bid 3.05 got 59| per 

 cent, of this offer. The Secretary, in alluding 

 to this transaction in his annual report, stated 

 that the takers of the loan found difficulty in ob- 

 taining United States notes to make the pay- 

 ments to the Treasury, and inferred from this 

 that there was not currency enough. The fact 

 seems to have been otherwise. The banks had 

 deposited $35,000, 000 of legal tendernotesat the 

 sub-Treasury for 5 per cent, certificates. These 

 certificates were at first used to settle balances 

 at the clearing house, but as legal tender notes 

 accumulated in the banks, they preferred to pay 

 balances in those notes rather than in certifi- 

 cates bearing interest. For this purpose some 

 12 millions were in use, making 45 millions of 

 notes held by the banks. When the Secretary 

 came forward for his 12 millions advance at 24 

 hours' notice, a further demand was created, 

 and when the loan was taken on the 6th day, 

 $13,613,340 more of notes were required to be 

 paid in before the 12 millions lent could be re- 

 turned. The transaction therefore required 

 $25,613.340 to perfect it in addition to 12 mil- 

 lions used for balance, and $35,000,000 on de- 

 posit with the department. Thus the banks 

 were called upon for 72 millions of the notes, 

 and at the same time some of he banks that, by 

 reason of their expanded condition, were short 

 in their balances at the clearing house, were 

 borrowers of the other banks. Yet the whole 

 VOL. IL-80 



transaction would have passed off without dis- 

 turbing the markets, had the Secretary not in 

 effect demanded two loans when only one was 

 wanted. The whole amount of notes outstand- 

 ing was about 200 millions, and the New York 

 banks manipulated one third of the whole 

 amount. 



The annual report of the Secretary at the 

 opening of Congress gave the following state- 

 ment of the revenues and expenditures of the 

 Government for the fiscal year ending June 

 30th, 1862: 



Bfctipt* and Expenditures for the fiscal year ending 

 June 30, 1 



RECEIPT*. 



The total receipts, including a balance on hand July 1, 

 1561, of |.257,065 SO were $5S3,&$5,247 06, as follows: 



From customs $49,056,397 62 



From lands 152.203 77 



From miscellaneous sources. 931.75764 



From direct tax 1,795,331 73 |51,935,720 76 



From loans: 

 Bonds, 3 years, 7.30 per cent 122.037.5S5 84 



5-20 years, 6 per cent, 13,990,600 00 



Oregon war 1,000,70000 



20 years' 6 per cent at par, 



for $50,000. 000. 7 percent 46,303,129 IT 

 Treasury notes, 2 years, act of 

 June 22, 1S60, and March 



2. 1-61 14.019.034 66 



60 days, act of March 2, 1561 12, 596,350 00 

 Acts "of Feb. S and March 2, 



1561 8,50000 



Act of Feb. 8,1561 55,25750 



Currency notes, acts of July 

 17 and Ane. 5, 1561, and 



Feb. 12. 1562 60,080,000 00 



Act of Feb. 25, 1562 95,620,00000 



Temporary loan, act of Feb. 



25, 1502 66,479,324 10 



Certificates of indebtedness, 

 1 year, acts of March 1 



an'd 17, 1S62 49,881,979 73 



Temporary loan, in anticipa- 

 tion of popular subscrip- 

 tion 44,375,000 00 529,692,460 50 



Aggregate receipts o51.C25.151 26 



Balance in treasury '. . . 2.257,065 50 



Total resources $553,555,247 06 



EXPEXDITTEES. 



Civil and foreign intercourse. $21.405.491 16 



Pensions and Indians 8,102,955 50 



War department 394,365,407 86 



Xavy department 42.674,563 69 



Interest on public debt 13,190,824 45 



Total current expenditure $474,744,773 16 



Bedeemed old debt 104 56 



Eedeemed treasury notes of 



1857, I860, 1561 43,110,000 00 



Eedeemed temporary loans.. 44,875,000 00 

 Eedeemed temporary loans, 



Feb. and March. 1562 ... ' 553,207 53 

 Eedeemed notes, July 17, '61 53,610 00 96,096.922 09 



Total expenditure $570.541,700 25 



Balance in treasury, July 1, 1S62 13,043,546 51 



Total $553,555.247 06 



This represented the actual expenditure of 

 the first year of the war, but did not embrace all 

 the cost, since very large claims remained un- 

 paid. The money paid out, irrespective of the 

 debt repaid, was $1,300,000 per day average. 

 With the close of that year, howeve-, the num- 

 ber of troops in the field and the operations of 

 the Government assumed greater scope, causing 

 the estimates for 1863 to be more than double 

 the expenditures of 1862, as follows : 



