750 



PUBLIC STOCKS. 



ment to be so conseientJous and trustworthy, that 

 they dread rather than desire the repayment of their 

 capital, which is in the hands of the state. From 

 this cause the five per cents have risen to 1 10 1 1 1 

 per cent., and the three per cents to nearly 100 ; 

 and the state has thus been enabled to exchange 

 the former for lour per cents. The new four per 

 cents now stand at 104 105, and would stand still 

 higher, if a small portion were not paid off semi- 

 annually ; the three per cents stand at 101, and 

 the two per cents at 90. Next in credit to Saxony 

 are the kingdoms of Wurtemberg and Hanover, 

 and the cities of Hamburg and Frankfort, whose four 

 per cent, notes are all nearly at par, or even above 

 it. Nor far below these are the certificates of Ba- 

 varia, Baden, Mechlenburg and Hesse- Darmstadt ; 

 and it is a general rule that the credit of the Ger- 

 man states is greater, and their certificates stand 

 higher, in proportion to the smallness of the states. 

 These certificates, however, are not proper subjects 

 of comparison with those of the larger governments. 

 In the smaller states, almost all debts are con- 

 tracted on condition of being repaid within a limited 

 time, and the measures adopted afford the creditors 

 good reason for believing that the promises will be 

 fulfilled. 



XII. United States Stocks. In 1775, when hos- 

 tilities commenced between the United colonies and 

 Great Britain, the Americans had no treasury, nor 

 any organized system, to direct their resources. 

 Congress authorized the issuing of a paper currency, 

 and loans were obtained from foreigners, and from 

 persons within the country. In 1783, the debts of 

 the United States, as far as they could be ascer- 

 tained, amounted to 42,000,375 dollars, and the 

 annual interest was computed at 2,415,956. No 

 provision had been made for ttie payment of the 

 interest, and there was no plan in operation to 

 redeem the principal ; the faith of the government 

 was doubted, and the evidences of the public debt 

 were reduced to about one eighlh of their nominal 

 value. The estimated amount of the debt, accord- 

 ing to the report of the secretary of the treasury, in 

 1790, was 79,124,464 dollars. 25,000,000 dollars 

 of this were proposed to be assumed on account of 

 the several states. 11,710,378 dollars was the 

 amount of the principal and interest of the foreign 

 debt ; 40,414,085 dollars was the principal and 

 interest of the liquidated part of the domestic debt. 

 The unliquidated part, which consisted chiefly of 

 continental bills of credit, was not ascertained, and 

 was estimated at 2,000,000 dollars. In 1790, the 

 public debt was funded, 600,000 dollars were an- 

 nually reserved from the duties on merchandise 

 imported, and the tonnage of vessels, or so much 

 thereof as might be appropriated from time to time for 

 the support of the government of the United States, 

 and their common defence, and so much of the resi- 

 due of the duties aforesaid as might be necessary was 

 appropriated to the payment of interest on loans 

 made in foreign countries, and also to the payment 

 of interest on such further loans as should be obtain- 

 ed for discharging the arrears of interest thereupon, 

 and the whole or any part of the principal thereof. 

 l"he appropriations were to continue until these 

 sums should be fully paid. The president was author- 

 ized to borrow 12,000,000 dollars to discharge the 

 arrears of interest, and the instalments of the prin- 

 cipal of the foreign debt. The United States 

 reserved the right to reimburse any of the sums so 

 borrowed within fifteen years after the same should 

 have been lent. To provide for the domestic debt, 

 a loan to its full amount was directed to be pro- 

 posed. The sums subscribed were payable in the 

 certificates issued for the domestic debt, according 



to their specie value, and computing the interest 

 upon such as bore interest to the 31st of December, 

 171) i, inclusively. The subscribers received two 

 kinds of certificates, one for two thirds of the sum 

 paid in the certificates just mentioned, bearing an 

 interest of six per cent., payable quarter-yearly, and 

 redeemable at pleasure, in payments not exceeding, 

 in any one year, for principal and interest, eight 

 dollars for each hundred mentioned in the certificate. 

 This first stock was afterwards called old six per 

 cents. The other certificate was for the remaining 

 third, which, after 1800. was to bear interest, and 

 be redeemable on the terms just mentioned. For 

 such of the sums subscribed as were paid in the 

 interest of the said domestic debt, or in the certifi- 

 cates issued in payment of interest, the subscrilwr 

 received a certificate for a sum equal to that paid in, 

 bearing three per cent, interest, payable quarter- 

 yearly, and redeemable whenever provisions should 

 be made by law for the purpose. This was 

 called deferred six per cents. The stocks thus 

 created were transferable only on the books of 

 the treasury, or on those of the commissioners of 

 loans, upon which the credit of the same should 

 exist at the time of the transfer, unless by special 

 warrant from the secretary of the treasury. The in- 

 terest was made payable where the credit of the 

 stock should exist at the time of its becoming due. 

 If not demanded before the expiration of a third 

 quarter, it was afterwards demandable only at the 

 treasury of the U. States. To provide for the debts 

 of the respective states, a loan of 21,500,000 dollars 

 was authorised to be paid in the evidences of debt 

 which had been issued by the states. For four-ninths 

 of any sum thus subscribed, the subscriber received 

 a certificate bearing six per cent, interest, and sub- 

 ject to the same conditions as those of the first sort 

 mentioned under domestic debt ; for two-ninths, ano- 

 ther certificate, bearing six per cent, interest after 

 1800, payable quarterly, and redeemable as above- 

 mentioned, and for the remaining three-ninths, a 

 certificate bearing three per cent, interest, and re- 

 deemable when provision should be made by law 

 for the purpose. Various stocks for small amounts 

 were created in 1795, 1790,1798. These were re- 

 imbursed in 1806, 1807, and 180S, with the excep- 

 tion of 80,000 dollars transferred to the national debt. 

 In the year 1803, the Louisiana six per cent, stock 

 was created for the payment of the purchase of 

 Louisiana from France. Certificates for 1 1,250,000 

 were issued, bearing an interest of six per cent. 

 The principal was made reimbursable in four 

 annual instalments, payable, the first in 1818, the 

 last in 1821. Besides this sum, claims of Ame- 

 rican citizens on the French government, to the 

 amount of 3,500,000 dollars, were also assumed by 

 the national government on account of the Louisi- 

 ana purchase, and added to the national debt. Feb. 

 11, 1807, the government of the U. States proposed 

 to the holders of six per cent, deferred and three 

 per cent stocks, to exchange the same for six per 

 cent, stocks, redeemable at the pleasure of the go- 

 vernment. This was done with a condition " that 

 no single certificate should issue for a greater amount 

 than 80,000dollars and that no reimbursement should 

 be made, except for the whole amount of any such 

 new certificate, nor till after six months, at least, 

 previous notice of such intended reimbursement." 

 The holders of three per cent, stock were to receive 

 new certificates for sums equal to sixty five per cent, 

 of the principal of the stock, bearing an interest of 

 six per cent. The amount of unredeemed and de- 

 ferred six per cent, stock subscribed was 6,294,051 

 dollars, and the stock thus created was called ex- 

 changed six par cents.; the : hreeper cents.subscribed 



