The second plan suggested remains for examination. Its principal features are, (1st) a circulation of notes bearing a common impression and authenticated by a common authority; (2d) the redemption of these notes by the associations and institutions to which they may be delivered for issue; and (3d) the security of that redemption by the pledge of United States stocks, and an adequate provision of specie. In this plan the people, in their ordinary business, would find the advantages of uniformity in currency; of uniformity in security; of effectual safeguard, if effectual safeguard is possible, against depreciation; and of protection from losses in discounts and exchanges; while in the operations of the government the people would find the further advantage of a large demand for government securities, of increased facilities for obtaining the loans required by the war, and of some alleviation of the burdens on industry through a diminution in the rate of interest, or a participation in the profit of circulation, without risking the perils of a great money monopoly. A further and important advantage to the people may be reasonably expected in the increased security of the Union, springing from the common interest in its preservation, created by the distribution of its stocks to associations throughout the country, as the basis of their circulation. The Secretary entertains the opinion that if a credit circulation in any form be desirable, it is most desirable in this. The notes thus issued and secured would, in his judgment, form the safest currency which this country has ever enjoyed; while their receivability for all government dues, except customs, would make them, wherever payable, of equal value, as a currency, in every part of the Union. The. large amount of specie now in the United States, reaching a total of not less than two hundred and seventy-five millions of dollars, will easily support payments of duties in coin, while these payments and ordinary demands will aid in retaining this specie in the country as a solid basis both of circulation and loans. The whole circulation of the country, except a limited amount of foreign coin, would, after the lapse of two or three years, bear the impress of the nation whether in coin or notes; while the amount of the latter, always easily ascertainable, and, of course, always generally known, would not be likely to be increased beyond the real wants of business. He expresses an opinion in favor of this plan with the greater confidence, because it has the advantage of recommendation from experience. It is not an untried theory. In the State of New York and in one or more of the other States it has been subjected, in its most essential parts, to the test of experiment, and has been found practicable and useful. The probabilities of success will not be diminished but increased by its adoption under national sanction and for the whole country. It only remains to add that the plan is recommended by one other consideration, which, in the judgment of the Secretary, is entitled to much influence. It avoids almost, if not altogether, the evils of a great and sudden change in the currency by offering inducements to solvent existing institutions to withdraw the circulation issued under State authority, and substitute that provided by the authority of the Union. Thus, through the voluntary action of the existing institutions, aided by wise legislation, the great transition from a currency heterogeneous, unequal, and unsafe, to one uniform, equal, and safe, may be speedily and almost imperceptibly accomplished. If the Secretary has omitted the discussion of the question of the constitutional power of Congress to put this plan into operation, it is because no argument is necessary to establish the proposition that the power to regulate commerce and the value of coin includes the power to regulate the currency of the country, or the collateral proposition that the power to effect the end includes the power to adopt the necessary and expedient means. The Secretary entertains the hope that the plan now submitted, if adopted with the limitations and safeguards which the experience and wisdom of Senators and Representatives will, doubtless, suggest, may impart such value and stability to government securities. that it will not be difficult to obtain the additional loans required for the service of the current and the succeeding year at fair and reasonable rates; especially if the public credit be supported by sufficient and certain provision for the payment of interest and ultimate redemption of the principal. To obtain a clear understanding of the amount for which it will become necessary to resort to further loans, it is requisite to review the financial movement of the treasury during the whole of the last, and the first quarter of the current fiscal year, and compare, somewhat more closely than has already been done, the probable wants and probable resources of the government for the remaining three quarters of the current, and the whole of the following year. In the July report the Secretary submitted a detailed statement, in part estimated, showing the receipts for the last fiscal year, ending on the 30th June, 1861, including the balance in the treasury at its commencement, to have been $86,972,893 81; and the expenditures to have been $84,577,258 60; and the balance to have been $2,355,635 21. Actual returns show that the receipts, including balance, were $86,835,900 27; the expenditures, $84,578,834 47; and the balance, $2,257,065 80. For the first quarter of the current fiscal year, commencing 1st July. 1861, the receipts and expenditures are ascertained, and for the remaining three quarters, ending 30th June, 1862, are estimated as follows: For the 1st quarter, the actual receipts from cus toms, lands, and miscellaneous sources, including the balance of $2,257,065 80, were.. For the 2d, 3d, and 4th quarters the estimated re $9,809,731 24 ceipts are 27,000,000 00 Carried forward.... 36,809,731 24 Brought forward... To these sums must be added the amount realized from loans in all forms prior to December 1, 1861, as already stated.. And there must be added also the amount to be . realized from additional loans already authorized And there must be added also the amount anticipated from the direct tax Making the total of receipts... On the other hand $36,809, 731 24 197,242,588 14 75,449,675 00 20,000,000 00 329,501,994 38 $98,239,733 09 For the 1st quarter the actual expenditures were.. For the 2d, 3d, and 4th, the estimated expenditures, under appropriations already made for public service, including civil list, Interior, War, and Navy Departments, and public debt and interest, are.. 302,035,761 21 And the estimated expenditures under the additional appropriations now asked for are— For civil service and increased in .... 543,406,422 06 329,501,994 38 ... 213,904,427 68 Making a total of actual and estimated expenditures Making an apparent amount for which recourse must be had to loans of .... ... It is to be observed, however, that in the amount estimated for expenditures, $22,870,398 50 is estimated for public debt, payment of a considerable part of which will not probably be demanded, and that some expenses are estimated for which may be retrenched; so that the whole amount of loans required, in addition to the amount already authorized, will certainly not exceed $200, 000, 000. For the fiscal year 1863, commencing on the 1st July, 1862, and ending on the 30th June, 1863, no reliable estimates can be made. It is earnestly to be hoped, and, in the judgment of the Secretary, not without sufficient grounds, that the present war may be brought to an auspicious termination before midsummer. In that event, the provision of revenue by taxation, which he has recommended, will amply suffice for all financial exigencies, without resort to additional loans; and not only so, but will enable the government to begin at once the reduction of the existing debt. It is the part of wisdom, however, to be prepared for all eventualities, and the Secretary, therefore, submits the estimates of the several departments for the fiscal year 1863, based on the supposed continuance of the war, as follows: The estimated expenditures are For the civil list, including foreign intercourse and For the Interior Department, (Indians and Pensions) For the Navy Department. Redemption.. ..... $23,086,971 23 4,102,962 96 360, 159,986 61 45,164,994 18 $2,883,364 11 29,932,696 42 Interest on debt contracted Making an aggregate of estimated expenditures of.. From customs, lands, and 42,816,330 53 475,331,245 51 ... $45,800,000 00 From direct tax.... 20,000,000 00 379,531,245 51 And leaving a balance to be provided for of.... The whole amount required from loans may, therefore, be thus stated: For the fiscal year 1862, under existing laws...... Making an aggregate of....... $75,449,675 00 200,000,000 00 379,531,245 51 654,980,920 51 The total may be stated in round numbers at six hundred and fiftyfive millions of dollars. A tabular statement will accompany this report, showing somewhat more in detail the actual and estimated receipts and expenditures of the financial years 1861, 1862, and 1863. It only remains, in order to complete the view of the financial situation, to submit a statement of the public debt as it was on the 1st day of July, 1860 and 1861, and will be, according to the estimates now presented, at the same date in each of the years 1862 and 1863. The statement, in brief, is as follows: 1860, the public debt was.. $64,769, 703 08 90,867.828 68 517,372, 802 93 897,372,802 93 On the 1st day of July, On the 1st day of July, On the 1st day of July, On the 1st day of July, The particulars of which the debt consists, and the portions which have been or will be paid or contracted in each year, will appear fully in a table, which will be submitted with this Report to Congress. Another table will be submitted, showing the amount of the public debt in each year, from 1791 to 1861, inclusive. The Secretary, believing that the frankest is the wisest policy for nations as well as individuals, has thought it his duty to submit to Congress this plain statement of the financial condition of the country. That it imposes considerable burdens is not to be denied or disguised. It is consoling to know that the energies and resources of the people are not insufficient for them. The public debt on the 1st of July, 1863, if the war be protracted until that time, on the scale of expenses contemplated by the estimates, will be, in round numbers, nine hundred millions of dollars. The amount of the public debt in the year 1816 was $127,334,933 74, and in twenty years it was paid off by the people. The country, even if the loyal States only are regarded, can sustain and pay off in thirty years the debt to which rebellion now exposes us with hardly greater proportional contributions from increased and increasing resources than that debt made necessary. It will be for the wisdom of Congress to determine how far the annual and the aggregate burdens of the people shall be diminished. by retrenchment, by economy, by prudent yet vigorous adjustment of means to ends, and by just contributions from rebel property. Nothing more certainly enhances credit and improves resources than the reduction of wants and wise energy in administration. The Secretary forbears making any recommendation concerning the authorities with which it may be expedient to invest him in respect to future loans. He begs leave to refer this matter altogether to the better judgment of Congress, suggesting only that, whatever discretion it may be thought prudent to give him in other respects, the rate of interest be limited by law. Turning now from the more immediate consideration of the public finances, the Secretary solicits the attention of Congress to some other topics connected with the administration of the Treasury Department. By the act of Congress of July 13, 1861, commercial intercourse, with States declared to be in insurrection by the President, was pro |