466 



FINANCES OF THE UNITED STATES. 



RECEIPTS. 



Actual. 1862. Estimates, 1863. 



Customs, &c $50,140,889 03 $70,374,777 07 



Taxes 1,795,33173 11,620,71799 



Internal taxes 85,456,303 73 



Total receipts $51,935,720 76 $167,451,798 79 



These estimates for the new year do not em- 

 brace contingences that may arise from unfore- 

 seen disaster nor any payments on account of 

 the principal of the public debt, of which a 

 large amount falls due and must necessarily be 



The debt at the close of 1860 expressed 

 the remains of former loans growing out of 

 the Mexican war and the emission of treasury 

 notes caused by the financial revulsion of 

 1857, which diminished the customs' revenue. 

 The 10 millions of treasury notes issued in De- 

 cember, 1860, were to meet the deficit at that 

 time, and were negotiated at 10-12 per cent, 

 interest. Those notes have been mostly paid 

 off in paper money in order to stop that high 

 rate of interest. The various denominations 

 of issues made during the Avar are expressed 

 under each head, and the result is an amount 

 of, in round numbers, 750 millions of outstand- 

 ing paper on January 1st, 1863. This does not 

 express the whole debt, however. There were 

 then many months in arrears of pay for the 

 whole army, and claims of contractors and 

 others were for several large sums. The issues 

 for the year 1862 were nearly altogether paper 

 money and temporary loans. There was paid 

 off January 1st, 1863, the remains of the old 20 

 years' 6 per cent, stocks of 1862 under peculiar 

 circumstances. The high rate of gold made it 

 probable that the principal would be paid in 

 Government paper, but there were some inti- 

 mations that it would be paid in gold; the 

 stocks were therefore of a highly speculative 

 value. If paid in paper the amount of the debt 



paid was $2,833,364.11 ; if paid in gold at 33 

 per cent, premium, the holders would realize 

 $3,768,374.26, an apparent profit of $935,010. 

 There was no authority to buy the gold with 

 which to pay the debt. It was, however, ob- 

 vious that unless the Government that had re- 

 ceived gold should pay in gold, its credit 

 would be seriously damaged. To support the 

 Government credit, therefore, certain of the 

 banks agreed to lend to the Treasury at 4 per 

 cent, sufficient gold to pay the debt, the gold 

 to be returned to the banks when the Govern- 

 ment should be in receipt of the gold through, 

 the customs. By this means the banks obtain- 

 ed 4 per cent, interest on gold otherwise idle, 

 and would receive it back when its value would 

 be much enhanced by the operations of the 

 importers. 



In relation to the loans in his annual report, 

 the Secretary remarked as follows : 



It has been the care of the Secretary to reduce the 

 cost of the debt, in the form of interest, to the lowest 

 possible amount, and it is a source of real satisfaction 

 to him that he has been able, thus far, to confine it 

 within very moderate limits. The first loans, being of 

 a magnitude hitherto undreamed of in our market, 

 were necessarily made at an interest which lie regard- 

 ed as high, though lenders strenuously insisted on 

 higher ; but large amounts are now obtained at five 

 and four per cent., while the circulation of United 



