REFUNDING THE NATIONAL DEBT. 



755 



thereby facilitate the loan of that year, and 

 prevent the necessity of applying in that and 

 subsequent years the large sum- which must 

 other wiso be expended in the reimbursement 

 and purchase of the public debt. 



An act for the purpose of effecting a conver- 

 sion of the old six per cent, and deferred stocks, 

 as recommended by the Secretary, was approved 

 July 6, 1812. It provided that a subscription to 

 the full amount of the old six per cent, and de- 

 ferred stocks should be proposed to the proprie- 

 tors thereof, for which purpose books were to 

 be opened at the Treasury and the offices of 

 the Commissioners of Loans on the 1st day of 

 October next ensuing, to continue open until 

 March 17, 1813, the fourteen last days of each 

 quarter excepted. For such part of the amount 

 of the old six per cent, and deferred stocks sub- 

 scribed and surrendered as should remain unre- 

 deemed on the day of subscription the subscrib- 

 ers were to receive certificates of United States 

 stocks, bearing interest of 6 per cent, per annum, 

 payable quarterly, from the first day of the quar- 

 ter in which the subscription was made. The 

 certificates were to be reimbursable at the plea- 

 sure of the United States at any time after De- 

 comber 81, 1824 ; but no reimbursement was to 

 be made except for the whole amount of stock 

 standing at the time to the credit of any one 

 proprietor, nor until after at least six months' 

 public notice of the intended reimbursement. 

 Nothing in the act was to be construed to alter, 

 abridge, or impair the rights of those creditors 

 of the United States who did not subscribe for 

 the exchanged stock. Under this act $2,984,- 

 746.72 were subscribed in old six per cent, and 

 deferred stocks, and exchanged for certificates 

 of the new stock. 



The next effort in refunding was an abortive 

 attempt in 1822 to exchange a stock bearing 

 an interest of 5 per cent, for a part of the six 

 and seven per cents due in the years 1825 and 

 1826. The stocks due and redeemable in those 

 years amounted altogether to the sum of $39,- 

 819,700, a sum far beyond the capacity of the 

 surplus revenues to meet; and the Secretary 

 of the Treasury, W. II. Crawford, therefore 

 proposed, in his report of December 21, 1821, 

 to offer in exchange for $24,000,000 in these 

 stocks a stock bearing a lower rate of interest 

 and having a longer time to run. He said : 

 "As the current value of the five per cent, 

 stock created during the last and present years 

 exceeds that of the seven per cent, stock, and 

 of the six per cent, stocks of 1812 and 1813, it 

 is presumed that the holders of these stocks 

 will be disposed to exchange them for an equal 

 amount of five per cent, stock, redeemable at 

 such periods as to give full operation to the 

 sinking fund as at present constituted. Accord- 

 ing to this view of the subject, twenty -four mil- 

 lions of the stocks which will be redeemable 

 in the years 1825 and 1826 may be exchanged 

 for five per cent, stock, redeemable, one third 

 on the 1st of January, 1831, and one third on 

 the same days of 1832 and 1S33. This ex- 



change of six per cent, stock, if effected on the 

 1st of January, 1823, will produce an annual 

 reduction of the interest of the public debt, 

 from that time to the first-mentioned period, of 

 $240,000, and an aggregate saving through the 

 whole period of $2,160,000. If the whole of 

 the seven per cent, stock should be exchanged, 

 the saving will be considerably increased." 



An act to authorize the issue of a five per 

 cent, stock to be exchanged for those bearing 

 an interest of 6 and 7 per cent, was approved 

 April 20, 1822. It authorized the opening of 

 a subscription to the amount of twelve mil- 

 lions of dollars of the seven per cent, stock and 

 of the six per cent, stock of 1812, and for four- 

 teen millions of six per cent, stocks of the years 

 1813, 1814, and 1815. For the six per cent, 

 stocks of the years 1812, 1813, 1814, and 1815, 

 subscribed and transferred to the United States, 

 the subscribers were to receive certificates of 

 United States stock bearing an interest of 5 per 

 cent, payable quarterly, reimbursable one third 

 at any time after December 31, 1830, one third 

 at any time after December 31, 1831, and the 

 remainder at any time after December 31, 1832. 

 For the sums subscribed in the seven per cent, 

 stock, certificates were to be issued bearing an 

 interest of 5 per cent, payable quarterly, re- 

 deemable at the pleasure of the United States at 

 any time after December 31, 1833. The funds 

 pledged by law for the payment of the interest 

 and principal of the stocks which might be sub- 

 scribed or exchanged were to remain pledged 

 to pay the interest and redeem the principal of 

 the stock to be created under this act. The 

 Commissioners of the Sinking Fund were to 

 pay out of the said fund the interest which 

 might become due on the stock, and to pur- 

 chase the certificates from time to time as they 

 purchased other evidences of the public debt ; 

 and so much of the fund as might be necessary 

 was appropriated for the redemption, and was to 

 continue appropriated until the whole of the 

 stock created was reimbursed. Nothing in the 

 act was to be construed to alter, abridge, or 

 impair the rights of such public creditors as 

 did not subscribe. 



This attempt to effect an exchange of stocks 

 almost entirely failed, as only a very small sum 

 was subscribed and exchanged for the five per 

 cent, stock. The Secretary, in his report on 

 the state of the finances for 1823, said that the 

 entire amount exchanged under the act had 

 been $56,704.77, as follows : 



Six per cent, stock of 1813 (first loant $23.817 83 



Plx per cent, (took of 1S18 (second loan).. 28,886 95 



Six per cent stock of 1814 (first loan) 8,000 00 



Six per cent stock of 1SU (second loan). . 7,000 00 



la all |6,704 7T 



The next refunding transactions occurred in 

 1824. 



The Secretary of the Treasury, W. H. Craw- 

 ford, in his report to the Senate December 81, 

 1823, gave a very favorable view of the public 

 finances, estimating the revenue of 1824 at 

 $18,550,000, and the balance which would be 



