FINANCES OF THE UNITED STATES. 



299 



to tliat subject by internal revenue officers 

 during that year. 



The total receipts from tobacco for the fiscal 

 year ending June 30, 1871, were $35,578,907.15, 

 showing a total increase of $2,228,199.30 over 

 the total amount of receipts from the same 

 sources for the preceding fiscal year. 



The total amount of manufactured tobacco, 

 represented by the amount of collections for 

 the fiscal year ending June 30, 1871, was as 

 follows : 



Pounds. 



Chewing-tobacco, snuff, etc., class 32-cents... 64,617,868 

 Smokint,'-tobacco, scraps, shorts, etc., class 



16-cents 30,517,636 



Add to this the quantity exported 10,621,082 



And excess remaining in warehouses June 30, 



1871, over June 30,1870 72,377 



Giving a total product, for tho year, of. . . 105,828,963 



The total number of cigars, cheroots, etc., on 

 which taxes were collected, was 1,332,844,357. 

 There has been a steady and uniform increase, 

 from month to month, in the revenues derived 

 from manufactured tobacco, cigars, etc., since 

 the present law went into operation, by which 

 the mode of collecting taxes on these articles 

 was changed from an assessment after removal 

 from the manufactory and sale, to a prepay- 

 ment, by means of suitable stamps, before the 

 goods are removed from the place of manu- 

 facture. 



Seizures of property for violation of internal 

 revenue law during the fiscal year ending June 

 30, 1871, were as follows: 



273,757 gallons of distilled spirits, valued at $339.395 70 

 1,366 bbls. of fermented liquors, valued at 9,569 00 



2,907 pounds of snuff, valued at 887 10 



281,283 pounds of tobacco, valued at 109,234 44 



2.01)4,376 cigars, valued at 58,820 54 



Miscellaneous property, valued at 397,333 36 



Total value of seizures $915,240 14 



An effort was made by the Secretary of the 

 Treasury to change the character of the public 

 debt by reinvesting it in bonds of a longer 

 term of years, and at lower rates of interest. 

 An act for this purpose, passed by Congress, 

 was approved July 14, 1870. It provided for 

 the issue of $200,000,000 in bonds for ten 

 years at five per cent. ; $300,000,000 for fifteen 

 years at four and a half per cent., and $100,- 

 000,000 at four per cent, for thirty years. 

 (See ANNUAL CYCLOPAEDIA, 1870, p. 288.) 



An act of Congress approved January 20, 

 1871, provided that the amount of bonds bear- 

 ing five per cent, interest, previously author- 

 ized to be issued, might be increased to five 

 hundred millions, and the interest might be 

 made payable quarterly. Books were opened 

 for subscriptions in this country and in Eu- 

 rope, in March, 1871, and the conditions made 

 known. All the national banks, and a large 

 number of bankers, both in this country and 

 in Europe, were authorized to receive subscrip- 

 tions. The first preference was given to sub- 

 scribers to the five per cent, bonds, with the 

 limit of two hundred millions of dollars. On 

 the 1st of August the subscriptions amounted 



to sixty-five millions seven hundred and sev- 

 enty-five thousand five hundred and fifty dol- 

 lars, chiefly by the national banks. 



Under date of July 14, 1871, a dispatch was 

 received from William A. Richardson, Assist- 

 ant-Secretary of the Treasury, then in London, 

 stating that certain bankers in Europe pro- 

 posed to take the remainder of the two hun- 

 dred millions of five per cents, upon certain 

 conditions. This proposition was considered 

 and modified, and early in August an agree- 

 ment was made, by the terms of which the 

 parties represented had the right to subscribe 

 for the remainder of the two hundred millions 

 of said bonds, by giving notice thereof, at any 

 time previous to the first of April, 1872, and 

 by subscribing for ten millions at once, and for 

 an average of at least five millions of bonds 

 per month during the intervening time, subject 

 to the right of the national banks to subscribe 

 for fifty millions of dollars within sixty days 

 from the 25th day of August. 



Some other points were embraced in the 

 agreement, and the books were opened, and sub- 

 scriptions obtained .for the amount near the 

 close of August. One hundred millions of five- 

 twenty bonds were called in, of which eighty 

 millions had been received near the close of 

 the year. But on August 1st the demand for 

 the new bonds had nearly ceased. The agree- 

 ment above mentioned, however, caused the 

 necessary loss to the Government, incident to 

 the refunding of the public debt, to be the 

 means of securing subscriptions to the amount 

 of about one hundred and thirty millions of 

 dollars. 



These transactions caused allegations to be 

 made against the Secretary of the Treasury, 

 that he had therein increased the bonded debt 

 of the United States in defiance of law ; and 

 that he had expended more than one-half 

 of one per cent., limited by law, in the ex- 

 penses of funding said loan. At the com- 

 mencement of the session of Congress, then 

 close at hand, the subject was brought up in 

 the Lower House, and referred to the Com- 

 mittee of Ways and Means. In their report 

 in January, 1872, they say : 



It appears that the Secretary can negotiate the 

 bonds authorized by this act for the sole purpose of 

 redeeming the outstanding indebtedness of the 

 United States, known as five-twenty bonds, and it ia 

 expressly provided in this fourth section that he may 

 lawfully apply to such purposes of redemption such 

 moneys in the Treasury as " may be derived from 

 the sale of any of the bonds the issue of which i* 

 provided for in this act." It is obvious that, in ordei 

 to make this application, he must first negotiate the 

 new bonds. He cannot take up the old bonds with 

 the proceeds of the new bonds, unless he has sold 

 the new bonds. He can first sell the new bonds 

 without any process, but, while the act of obtaining 

 and applying the proceeds is going on, he will in- 

 crease the public debt to the amount of the bonds he 

 first sells in order to obtain the proceeds with which 

 to take up the old bonds. The committee knows no 

 process by which this provision of law can be carried 

 out without involving such a temporary increase of 

 public debt ; and, therefore, are of opinion that that 



