444

EIGHTEEN HUNDRED AND SIXTY-FOUR.

required the absorption of a large amount of Government securities.

But, independent of its being a present benefit, this system, if let alone by new administrations, will be a lasting - one, by giving us a uniform currency throughout the country; a desideratum acknowledged by every business man.

Under the agencies and commissions authorized by the Treasury Department, the sale of the Five-twenties went briskly on, and the Secretary extended the limit in order to dispose of the whole. The deposits on five per cent. certificates filled up the limit of one hundred millions of dollars, so that for the last three months of the fiscal year, ending with June, the Treasury was well supplied.

Gold fell nearly a half, goods went down, and in the very midst of our troubles, everything seemed about to revive. At its close the debt was one thousand and ninety-eight million, seven hundred and ninety-three thousand, one hundred and eighty-one dollars, without reckoning in the arrears, amounting probably to two hundred millions more. The interest on the funded debt was forty-two million, two hundred and seventy-eight thousand and two dollars, and seventy-three cents. Unfunded, one hundred and eighty millions of dollars.

At the beginning of the fiscal year of 1864, there were over four hundred and eleven million dollars of outstanding legal tender money. The constant forcing of paper issues on the market depreciated necessarily its value, and again raised the price of gold. Still the financial resources of the country had been developed in a manner that astonished the most hopeful, showing an amount of available wealth never dreamed of before. Our unparalleled prosperity for so many years had induced an extravagant, expensive mode of living, so that the extraction of these vast sums from the

people produced comparatively little suffering-it demanded only the practice of a wholesome economy.

The total revenue from all sources this fiscal year was one hundred and eleven million, three hundred and ninetynine thousand, seven hundred and sixty-six dollars. Added to this, we borrowed seven hundred and seventy-six million, six hundred and eighty-two thousand, three hundred and sixty-one dollars; making in all eight hundred and eightyeight million, eighty-two thousand, one hundred and twenty-eight dollars with which to meet an expenditure of eight hundred and ninety-five million, seven hundred and ninety-six thousand, six hundred and thirty dollars. It was impossible to estimate very closely the expenditures of the year 1864, for the constant depreciation of paper brought up the price of every thing the Government would have to buy. It was plain that the taxes would not meet it, and therefore the Government must go on borrowing. The Secretary stopped in January the sale of the Five-twenty bonds. Having previously issued fifteen million dollars more of legal tender notes, he now, with the stoppage of the sale of these bonds issued one hundred and fifty million dollars more of these notes, bearing interest.

In the meantime, the amount of customs largely exceeded the estimate, so that after paying the interest on the public debt a surplus of gold was left, which by law was to be applied to the purchase of one per cent. of the public debt as a sinking fund.

This whole surplus was eventually sold in the market, and the premium obtained credited to the Government. It seem ed a very discreditable thing for the Government to go into the market to speculate on its own depreciated paper, but the object was to bring down the price of gold, which speculators were forcing up to a ruinous rate. But the most remarkable effort to bring down the price of gold this year,

446

THE GOLD BILL.

remarkable from the enormous advance it produced, was what was called the "Gold Bill." Congress having passed a resolution increasing the duties on imported goods fifty per cent., for sixty days, to take effect on the 28th of April, large entries of goods were made, which increased the demand for gold, and hence caused it to advance in price. To stop its farther advance, the "Gold Bill" was concocted, which forbade any one to sell exchange for specie at more than ten days time, and no where except over the counter of the individual banker. This law was odious not only as infringing on personal rights, but it crippled bankers, by making them afraid to act as their business relations required. It besides, exposed them to informers, who were ready to make complaints on any pretense, as half the fine would go to them. Moreover, the short term fixed by the law for which a contract for exchange might run, interfered sadly with the ordinary shipping business done in New York for the West. Fifteen or sixteen days were required to complete arrangements between even Chicago and New York, hence foreign exchanges were at a dead stand still. I for instance, certified checks could not be used, it was chult to see how ordinary business could be carried on. It is true that the Solicitor of the Treasury finally gave it as L's opinion that the Act did not require the "formal deliv e y of the notes in currency by the buyer to the seller," for the amount of gold or bullion purchased on the day in which the contract was made, but that a bona-fide check for the amount in United States notes or currency was valid payment, and also, that although the law "prohibits contracts for the purchase or sale and delivery of foreign exchange, except on conditions of immediate payment in full of the agreed price thereof on the day of delivery in United States notes, or national currency," yet, "that a payment for exchange in gold coin of the United States was a legal and

MR. FESSENDEN.

447

valid payment;" thus relieving bankers from their greatest fears. Still gold went steadily up, till at the close of the fscal year it stood at two hundred and ninety. On the last day of the fiscal year this absurd bill was repealed, and the same day Mr. Chase resigned and Mr. Fessenden took his place.

The total receipts of this year, from receipts of customs, loans, taxes and every source, were two hundred and sixty million, six hundred and thirty-two thousand, seven hundred and fifty-seven dollars, while the expenses, and interest on this debt, amounted to eight hundred and sixty-five million, two hundred and thirty-four thousand and eighty-seven dollars. The revenue, therefore, fell short six hundred and four million, six hundred and one thousand, three hundred and seventy dollars of meeting the expenditures. This enormous balance was borrowed as we have seen, on bonds of various kinds, notes, certificates of indebtedness, fractional currency, &c., the whole amount so borrowed being seven hundred and thirty million, six hundred and forty two thousand, four hundred and ten dollars and ninety-seven cents; of which, one hundred and twelve million, five hundred and twenty-seven thousand, five hundred and twenty-six dollars and five cents were expended in repayment of the public debt, leaving over six hundred and eighteen millions to be applied to the expenditures. The receipts from customs this year, reached the large sum of one hundred and two million, three hundred and sixteen thousand, one hundred and fifty-three dollars, while the interest to be paid in coin was only fifty-three million, six hundred and eighty-five thousand, four hundred and twenty-one dollars, leaving over forty-eight and a half millions in gold in the public treasury, which, as we previously stated, was sold, and a premium of over nineteen million dollars obtained, and put down as miscellaneous receipts.

When, in 1864 Mr. Fessenden came into office, he found as we have seen, the Government paper worth only thirtyfive cents on the dollar, with customs falling off. But the tax law had been revised and now promised to furnish a larger amount of money than before, while a five per cent. extra income tax was levied on the incomes of the year before, which of course would increase the amount of revenues. There were nearly nineteen million dollars in the Treasury, when he accepted the office of Secretary, while under laws previously passed, he had a right to borrow, first, thirty-two million, four hundred and fifty-nine thousand, seven hundred dollars that portion of the seventy-five million dollars advertised before the close of the former fiscal year, and which had not been awarded to bidders-and also one hundred and twenty-seven million, six hundred and three thousand, five hundred and twenty dollars, the amount which had not been subscribed for, and paid under the Act of March 3d, 1864, besides four hundred million dollars under an Act passed the last day of the fiscal year. A little over sixty-two million dollars of treasury notes had been redeemed and canceled, which he had authority to replace, so that altogether the available resources in the hands of the new Secretary amounted to six hundred and forty-one million, one hundred and twenty-seven thousand, two hundred and thirteen dollars and seventy-one cents. Of course he could not do otherwise than follow on in the track of his predecessor.

Our bonds now began to sell abroad, which obviated very much the issue of legal tender notes.

Mr. Fessenden continued in office until March, 1865, when the war was drawing to a close, at which time the public debt was twenty-four hundred and twenty-three million, four hundred and thirty-seven thousand and one dollars.