16 REPORT OF THE SECRETARY. 



merit and that of last year is that the balance now in the hands of 

 the treasurer is $2,500 less than before. This difference is mainly 

 due to the increase of prices and the consequent necessity of a greater 

 expenditure in carrying on the ordinary operations. 



In view of the great expenditures of the government on account of 

 the war, the Institution did not at first claim, as it might reasonably 

 have done, to have the annual income from the original bequest paid 

 in specie, as all the older funded debts of the United States are paid. 

 But since a large outlay will be required to repair the damages caused 

 by the fire, the necessity could not be avoided of calling the atten- 

 tion of the Secretary of the Treasury to this measure. That this 

 claim is a just one was the unanimous opinion of the Board of 

 Regents, and among them of Chief Justice Chase, and in accordance 

 with the instructions of the Board I have presented this matter to 

 the department. It was referred by the Secretary to his legal ad- 

 viser, the Solicitor of the Treasury, who has decided that in accord- 

 ance with the usage of the government the Institution is entitled to 

 receive the interest from the original bequest of Smithson in coin. 

 The premium on this will therefore, in future, increase the balance 

 in the hands of the treasurer.* 



It was mentioned in the last report that a part of the original be- 

 quest, amounting to £5,015, was left by Mr. Rush in England as the 

 principal to secure an annuity payable to the mother of Smithson' s 

 nephew. The annuitant having died, a power of attorney was sent 

 in November, 1862, to Messrs Fladgate, Clark and Finch, (the same 

 firm originally employed by Mr. Rush,) to collect the money. After 

 a considerable delay, arising principally from technical difficulties, 

 the money was obtained and deposited to the order of the Institution, 

 with George Peabody & Co., bankers, London. It was subsequently 

 drawn through the agency of the Secretary of the Treasury, and, in 

 accordance with the law of Congress directing that the money of the 

 Smithsonian bequest should be invested in United States securities, 

 it was expended in the purchase of government bonds, bearing in- 

 terest at the rate of 7-^- per cent. The amount realized in bonds of 

 this denomination, at par, was $54,150. It was at first supposed that 

 this money, or at least the interest upon it, could immediately be ap- 

 plied to the uses of the Institution, but from a critical examination 

 of the enactments of Congress in reference to the Smithsonian fund, 



* The premium on the coin received since the presentation of the report, on account of the 

 interest due 1st January, was $7,472 70, which sum added to $29,484 08 gives $36,956 78 

 as the amount in the hands of the treasurer. 



