FINANCES OF THE UNITED STATES. 



399 



customs. Soon another issue of 90 millions was 

 authorized by Congress, receivable for all pub- 

 lic dues, except customs. Still later in the 

 session a further issue of 150 millions was au- 

 thorized, of which 50 millions were reserved 

 from issue until actually required for the pay- 

 ment of deposits. The total emission thus au- 

 thorized was 250 millions, besides 50 millions 

 needed for the payment of deposits, all of which 

 might be available for circulation. An emis- 

 sion of fractional currency, consisting of post- 

 age and revenue stamps, was also authorized. 

 The Secretary was also authorized to receive 

 on temporary deposit, at interest not exceeding 

 5 per cent., any sum not exceeding 100 millions, 

 and to pay such creditors as might choose cer- 

 tificates of indebtedness, payable in one year, at 

 six per cent, interest. Congress also author- 

 ized the issue of 500 millions 6 per cent, bonds, 

 redeemable after five and payable in twenty 

 years, with interest payable in specie. These 

 were exchangeable for demand notes. 



Such were the measures adopted by Congress. 

 At the close of the fiscal year, June 30th, 1862, 

 $57,926,116 had been received on deposits ; 

 $158,591,230 of demand notes had been issued 

 and were in circulation ; $49,881,979 had been 

 paid in certificates of indebtedness ; and $208,- 

 345,291 had been paid in cash. The Secretary 

 said: " Every audited and settled claim on the 

 Government, and every quartermaster's check 

 for supplies furnished, which had reached the 

 Treasury, had been met, and there remained in 

 the Treasury a balance of $13,043,546." 



In July a call was made by the President for 

 three hundred thousand men for three years, 

 and in August another call for three hundred 

 thousand for nine months, and on the first of 

 December the Secretary estimated the amount 

 of the public debt at the close of the fiscal year, 

 June 30th, 1863, would be $1,122,297,403. 



When Congress assembled in December, 

 1862, the results presented were as follows : 

 The actual payments, other than for principal 

 of public debt, were $220,175,370; and the 

 accumulated requisitions beyond resources 

 amounted to $48,354,701. The amount of notes 

 in circulation, including those receivable for 

 customs, was $222,932,111 ; the amount re- 

 ceived on deposit was $80,798,650 ; the issue 

 of fractional currency was $3,884,800 ; the issue 

 of certificates of indebtedness was $87,363,241 ; 

 the issue of 6-20 bonds amounted to $23,750,- 

 000. Thus there remained of the loans author- 

 ized at the previous session the following bal- 

 ances, viz. : authority to issue $27,067,889 

 notes for circulation ; in deposits there could be 

 received $20,201,350 ; it was thought that 40 

 millions of fractional currency would be needed 

 by the people, therefore $36,115,200 could be 

 issued ; if 100 millions of certificates of indebt- 

 edness could be put forth, then a balance of 

 $12,636,758 could yet be paid out ; a balance 

 of 35, millions of 5-20 bonds, it was estimated, 

 would be taken before the end of the fiscal 

 year. The aggregate of all these sums was 



$131,021,197, which constituted the total re- 

 sources available, under the existing laws, up 

 to the end of that fiscal year, June 30th, 1862. 

 The Secretary said: "These credit resources, 

 with actual receipts from like resources, added 

 to revenue in all forms, may supply the Treas- 

 ury with $511,646,259. There remains a bal- 

 ance of disbursements of $276,912,517 to be 

 provided for." 



The estimates for the ensuing fiscal year, 

 commencing July 1st, 1863, beyond resources 

 available under laws then existing was $627,- 

 388,183. So greatly had the expenses of the 

 war against the rebels accumulated, that the 

 Secretary was obliged to ask Congress in De- 

 cember, 1862, to provide for the additional 

 amount of $904,300,700 to meet the expenses 

 until July 1st, 1864. 



How was this va"st sum to be provided ? The 

 danger which lay in the path of the Secretary 

 was now close at hand. He had foreseen it at 

 the outset, and had prepared to meet it. This 

 was an excess of paper circulation. He esti- 

 mated the circulation of the banks in loyal 

 States to be 167, millions. That of the Gov- 

 ernment notes was $210,104,000. Total, 

 $377,104,000. One year previous, November, 

 1861, by his estimate, the circulation was in 

 bank notes, $130,000,000; in coin, including 

 the specie of loyal State banks, $210,000,000. 

 Total, $355,140,000. The difference in the cir- 

 culation before the suspension, and one year 

 after, was thus $21,964,000 in favor of the lat- 

 ter period. This excess, the Secretary insisted 

 did not "greatly, if at all," exceed the legiti- 

 mate demands of payments. Yet, with affairs 

 in this posture, he was called upon for more 

 than 900, millions to be raised in the ensuing 

 eighteen months. Only two immediate meas- 

 ures of safety lay before him, and he boldly pro- 

 posed them both. One was to drive home the 

 State bank paper circulation by a tax, and the 

 other was the funding of the Government notes. 

 Both these measures had been proposed by him 

 at an earlier day, but their necessity had not 

 been seen and felt before by Congress or the 

 people. At the same time the Secretary had 

 proposed, as above mentioned, a system of na- 

 tional bank paper. Taxation, direct and indi- 

 rect, he reserved as a certain means by which 

 to place the ordinary expenditures of the Gov- 

 ernment and the interest on its loans, beyond 

 the reach of any peril. There had been a prac-- 

 tical difficulty in funding the Government obli- 

 gations since the suspension of specie payments 

 by the banks. By law bank paper was not receiv- 

 ble by the Government, and coin was at such 

 a premium, that no one would give it for Gov- 

 ernment bonds at par. The Government notes, 

 which had now come into circulation, were the 

 only medium by which funding could be effect- 

 ed. Said the Secretary : " Under these circum- 

 stances, the path of wisdom and duty seems 

 very clear. It leads to the support of a United 

 States note circulation, and to the reduction of 

 the bank note circulation." 



