FINANCES OF THE UNITED STATES. 



297 





of money at call was then in the market 4 per 

 cent., and could with difficulty be placed at 

 that rate, and the United States 6 per cent. 

 20-years stock was selling at 83. Finally the 

 bids amounted to $2,500,000, and the leading 

 banks and bankers with great exertion, made 

 up the remainder, completing the $5,000,000 

 6 per cent, treasury notes at par. These being 

 receivable for customs-duties, while money in 

 the open market was only 4 per cent., large 

 importers who had funds lying idle to meet 

 duties, could invest them in these notes, where 

 they would earn 6 per cent., and be available 

 for the duties. 



The department was now comparatively easy 

 for the moment, but the immense expenses 

 rapidly absorbed means. Congress was not to 

 meet until July 4, and the Government credit, 

 as apparent from the price of its 6 per cent, 

 stock being 84, when money was only worth 

 4 per cent., for the same description for which 

 "le Government a few years before had itself 

 aid 22 per cent, premium, was shaken. The 

 sources of the Treasury now consisted of 

 14,000,000, that had been authorized by the 

 3t of June, 1860, but which could not be sold 

 ider par for a 6 per cent, stock. There was 

 e balance, $9,000,000, of the $25,000,000 

 nthorized by the law of February, 1861, which 

 light be sold to the best advantage, and there 

 ras also the $10,000,000, authorized by the 

 riff law of March 2, 1861 ; but this could not 

 used until after June 30, or the close of the 

 il year 1861. The difficulty was to raise 

 leans upon these stocks. The banks and 

 apitalists began to feel the necessity of aiding 

 ie Government and sustaining its credit as 

 matter of self-defence. Under these circum- 

 inces the New York Chamber of Commerce, 

 rit-h various sub-committees, and the New York 

 id Boston banks, took the matter in hand, and 

 much difficulty issued the following card, 

 ay 16: 



" The undersigned, a committee of the Cham- 

 of Commerce, having, by a sub-committee, 

 recently visited Washington to confer with the 

 Secretary of the Treasury on the subject of 

 the loans, which he is authorized by law to 

 issue, they beg to call the attention of the 

 public to the particulars of these loans, as 

 follows : 



"1. A loan of about nine million dollars, which 

 will be issued in bonds or stock having twenty 

 years to run, and at six per cent, interest. For 

 this proposals are invited, and it will be award- 

 ed to the highest bidder, at "Washington, on 

 Tuesday, the 21st inst. 



"2. A loan of fourteen million dollars, ($14,- 

 000,000,) which is limited by the law of June, 

 1860, at par. This loan is now advertised to 

 be awarded on the 30th instant, but from its 

 limitation it will probably have to be issued in 

 treasury notes having two years to run, and 

 convertible into twenty -years stock or bonds, as 

 above, 'at the pleasure of the holder; which 

 notes the Secretary is by law authorized to 



substitute, and which are also restricted to 

 par. 



"And the committee invite all capitalists and 

 moneyed institutions to avail of these opportu- 

 nities for investment. 



" Committee.-- Pelatiah Pent, Stewart Brown, 

 William II. Aspinwall, J. J. Astor, jr., August 

 Belmont, James Gallatin, A. T. Stewart, J. M. 

 Morrison, Moses Taylor, George S. Coe, F. A. 

 Palmer, John Q. Jones, I), It. Martin, Jacob 

 Campbell, jr." 



When the time expired for the proposals, the 

 bids were not completed, and Mr. Chase post- 

 poned the opening of the bids until May 25. 

 The intermediate time was employed by in- 

 fluential parties in endeavoring to make up the 

 loan. Finally, on opening the bids, the offers 

 for the $9,000,000 reached 84 to 93 for the 

 stocks, of which $6,396,000 were awarded at 

 85 to 93, a large portion to the New York 

 banks, and $2,241,000 in 6 per cent, treasury 

 notes at par. 



The proposals for the $14,000,000 were to 

 be opened on the 30th of May. That, how- 

 ever, was only a formality, since no one wonld 

 bid par for stocks that he could buy in the 

 market at 84. The compliance with the law, 

 however, enabled the Secretary to issue the 

 amount in treasury notes. Some of these 

 were taken, and the remainder was paid out 

 gradually to creditors. 



While the Federal Government was thus 

 struggling for money, the various States were 

 also in the market with war loans. New York 

 City procured $1,000,000 at the close of April; 

 Pennsylvania sold $3,000,000 of a 5 per cent, 

 loan, Ohio $1,000,000, Indiana offered $1,500,- 

 000 in a 6 per cent, stock, Illinois $1,000,000, 

 Michigan, $500,000 at 7 per cent., Iowa $400- 

 000 at 7 per cent., Connecticut $2,000,000 at 

 6 per cent. The State of New York obtained 

 $700,000 7 per cent, loan at 101.38 to 101.65, 

 Maine $1,000,000 in a 5 per cent, stock at a 

 premium. 



Towards the close of June the Government 

 wants were again attracting attention, and the 

 banking interest was urging the adoption of 

 the loan or stock system, rather than the 

 treasury note plan which the Secretary seemed 

 to favor. There were no measures adopted, 

 however, until the meeting of Congress. The 

 Secretary then required $5,000,000 to carry 

 him along until Congress should devise means. 

 The two-years treasury notes that had been 

 issued at par were at 2 per cent, discount, and 

 were therefore not directly available. It was 

 finally decided to borrow of the banks the 

 required amount at 60 days on pledge of the 

 6 per cent, notes as collateral security. The 

 amount of $5,000,000 was promptly made up on 

 these terms. 



At the meeting of Congress, July 4, the 

 Secretary of the Treasury, in his report, set 

 forth the financial difficulties that beset the 

 Government, and stated the probable expend- 

 iture for the year at $318,519,581.97. 



