RESUMPTION OF SPECIE PAYMENTS. 



7C3 



It thus appears that the annual saving hereafter 

 in the interest charge by meuns of the refund- 

 ing operations will be $19.900,846.50. 



J. K. UITUN, 

 Assistant Secretary of the Treasury. 



RESUMPTION OF SPECIE PAYMENTS. 

 The resumption of specie payments by the 

 Government took place on January 1, 1879, as 

 provided by law. 



No precise date can be fixed when the sus- 

 pension of specie payments thus resumed oc- 

 curred, the suspension not having been author- 

 ized or sanctioned by law. The banks in the 

 city of New York suspended coin payments on 

 the 30th of December, 1861. Their exam- 

 ple was necessarily followed by most of the 

 banks throughout the country, and the Gov- 

 ernment soon yielded to the same necessity in 

 respect to the United States notes then out- 

 standing and matured. Gold commanded a 

 nominal premium throughout the year 1861, 

 but the first recorded quotation of it was at 

 103 on January 13, 1862. Of the $50,000,000 

 of notes which had been authorized by the 

 acts of July 17 and August 5, 1861, there were 

 outstanding at the time of the suspension $33,- 

 460,000. After the suspension, on February 

 12, 1862, an additional emission of $10,000,000 

 was authorized, making in all $60,000,000. 

 These notes bore no interest, were payable on 

 demand, and receivable in payment of public 

 dues, and could be reissued. They were not 

 intended, however, for general circulation as 

 money, but the practical demonetization of 

 coin as a circulating medium left only the de- 

 preciated issues of the banks to supply the 

 entire circulation of the country ; and these 

 proving insufficient to meet the extraordinary 

 demands for circulation consequent upon the 

 war, the Treasury notes were drafted into the 

 service as substitutes for the coin which had 

 fled the country. 



The balance in the Treasury on December 

 80, 1860, subject to the warrant of the Secre- 

 tary, was $2,078,257. During the calendar year 

 1861 the net receipts of the Treasury from all 

 sources were $218,224,077.64 as against $59,- 

 217,030.19 for the previous year ; but the expen- 

 ditures had increased in a still greater ratio, and 

 in January, 1862, the Treasury was unable to an- 

 swer the requisitions upon it for disbursements. 

 Additional resources to carry on the Govern- 

 ment became imperative, but no coin was left 

 in the country for which to sell a loan. Of the 

 depreciated bank currency there was believed 

 to be then in existence only about $150,000,- 

 000, and this with the $60,000,000 of Treasury 

 notes made the entire circulation of the coun- 

 try only $210,000,000; and to collect these 

 notes together for public disbursement, scat- 

 tered as they were throughout the country, 

 would be almost as hopeless a task as to issue 

 a loan for coin and bring back to the country 

 the metallic currency which had gone abroad to 

 pay foreign indebtedness. To meet this emer- 

 gency, and with a view of utilizing all the re- 



sources of the country, Congress, by act ap- 

 proved February 25, 1862, authorized the iwue 

 of $150,000,000 of notes not bearing interest, 

 payable at the Treasury of the United States, 

 and of such denominations as the Secretary of 

 the Treasury might deem expedient, not less 

 than five dollars each. Of this amount $60,- 

 000,000 were for the redemption of the notes 

 of July 17 and August 5, 1861. The authoriz- 

 ing act further provided as follows : 



That the amount of the two kinds of notes together 

 shall at no time exceed the sum of one hundred and fifty 

 millions of dollars, and such notes herein authorized 

 shall be receivable in payment of all taxes, internal du- 

 ties, excises, debts, and demands of every kind due to 

 the United States, except duties on imports, and of all 

 claims and demands against the United States of every 

 kind whatsoever, except for interest upon bonds and 

 notes, which shall be paid in coin, and shall also be 

 lawful money and a legal tender in payment of all debts 

 public and private, within the United States, except 

 duties on imports and interest as aforesaid. And any 

 holders of said United States notes depositing any sum 

 not less than fifty dollars, or some multiple ot fifty dol- 

 lars, with the Treasurer of the United States, or either 

 of the Assistant Treasurers, shall receive in exchange 

 therefor duplicate certificates of deposit, one of which 

 may be transmitted to the Secretary of the Treasury, 

 who shall thereupon issue to the holder an equal amount 

 of bonds of the United States, coupon or registered, as 

 may by said holder be desired, bearing interest at the 

 rate oi six per centum per annum, payable semi-an- 

 nually, and redeemable at the pleasure of the United 

 States after five years, and payable twenty years from 

 the date thereof. And such United States notes shall 

 be received the same as coin, at their par value, in pay- 

 ment for any loans that may be hereafter sold or ne- 

 gotiated by the Secretary ol the Treasury, and may be 

 reissued from time to time as the exigencies of the pub- 

 lic interest shall require. 



Later in the same session, by act approved 

 March 17, 1862, Congress declared the outstand- 

 ing notes of July 17 and February 12, 1862, to 

 be a legal tender in like manner, for the same 

 purposes and to the same extent, as the notes 

 authorized by the act of February 25, 1862. 

 Still later, by act of July 11, 1862, Congress au- 

 thorized an additional issue of $150,000,000 of 

 notes of similar character, and, like those al- 

 ready issued, exchangeable for bonds ; and also 

 provided that the Secretary might receive and 

 cancel any notes heretofore issued, and in lien 

 thereof issue an equal amount of notes au- 

 thorized by this act. The act also provided 

 that not less than $50,000,000 of these notes 

 should be reserved for the payment of certain 

 deposits, to be used only when, in the judgment 

 of the Secrstary of the Treasury, the same or 

 any part thereof might be needed for that pur- 

 pose. By act of July 17th following Congress 

 authorized the issue of postage and revenue 

 stamps for use as fractional currency, prefer- 

 ring this expedient to metallic coins or tokens 

 reduced in value below the existing standard, 

 making them receivable in payment of ah* dues 

 to the United States under five dollars, and ex- 

 changeable for United States notes when pre- 

 sented in sums of not less than five dollars. 



Under these several acts a total circulation 

 of $250,000,000 could be issued, and in an im- 

 probable contingency $50,000,000 more; also 



