Total expenditures, exclusive of principal
of public debt.....

.$377,340,284 For the fiscal year commencing on July 1, 1868, and ending on June 30, 1869, the receipts and expenditures of the first quarter, ending September 30, 1868, were as follows:

The receipts from customs........
The receipts from lands....
The receipts from direct tax....
The receipts from internal revenue
The receipts from miscellaneous
sources (of which amount there
was received, from premium on
bonds sold to redeem Treasury
notes, the sum of $587,725)......

$49,676,594

714,895

15,536 38,735,863

6,249,979

notes which had accrued prior to November 1, 1867. Excepting these unusual expenditures, consisting of donations of public money in the form of bounties and additional subsidies to railroad companies, the receipts would have exceeded the expenditures $43,787,412.

During the period the amount of debt bearing coin interest has increased $712,393,459. The change in the nature of the debt is shown by the following details:

The public debt on the 1st day of November, 1867, amounted to $2,491,504,450, and consisted of the following items: Debt bearing coin interest

Debt bearing currency interest..
Matured debt not presented for payment...
Debt bearing no interest..

Total..

Cash in the Treasury

$1,778,110,991 426,768,640 18,237,538

402,385,677

$2,625,502,848 133,998,398

Amount of debt, less cash in the Treasury. $2,527,129,552

Other causes existed to produce a disproportionate relation between the receipts and expenditures as compared with former years. A large reduction of the internal taxes was made at the session of Congress beginning December, 1867, especially on manufactures. On the other hand, large expenditures were necessary to sustain the military operations on the frontier and the forces stationed in the

Southern States. These considerations give

a very favorable aspect to the public debt. The following table (see next page) gives a statement of the indebtedness of the United States on June 30, 1868.

Since the close of the war in 1865-a period of three years and seven months-the receipts of the Government from all sources have reached the sum of $1,662,496,062. Of this large sum there were $630,431,125 paid on debts which were actually due at the close of the war, and for bounties, which, like the pay of the army, were a part of the expenses of the war. this amount is added to the debt as exhibited by the books of the Treasury on April 1, 1865, it appears that the debt of the Government was at that time $2,997,386,203, and that the actual reduction has been $470,256,650.

If

A further comparison of the facts presented at different periods will serve to demonstrate the tendency of the financial affairs of the Government, and to illustrate the important results which have been achieved. At the close of the war in April, 1865, the cash in the Treasury was $56,481,924, while there were requisitions waiting for payment to the amount of $114,256,548. In addition, there

by the Government to contractors for the necessary supplies of the army and navy were sold at a discount of from ten to twenty per cent. Under these circumstances the Treasury was relieved by a loan of nearly $700,000,000 in seven and three-tenths notes. This relief, however, left the Government with $1,296,834,123 of the public debt, consisting of various forms of temporary securities, $433,160,569 of United States notes, and $26,344,742 of fractional currency. Of this temporary debt, portions were maturing daily, and all of it, including $18,415,000 of the funded debt, was to be provided for within a period of three years. The seven-thirty notes were, by law, and the terms of the loan, convertible at maturity, at the will of the holder, into five-twenty bonds, or payable, like the rest of these temporary obligations, in lawful money. Certificates of indebtedness were also maturing at the rate of from $15,000,000 to $20,000,000 per month; and in addition to the five per cent. notes which matured in January following, and the compound interest notes which were payable at various times within a period of three years, there were $830,000,000 of seventhirty notes, which would become due as follows:

The course pursued by the Department in this position of the debt is thus stated by the Secretary:

The policy of the Secretary was simply, first, to put and keep the Treasury in such condition as not only to be prepared to pay all claims upon presentation, but also to be strong enough to prevent the success of any combinations that might be formed to control its management; and second, to take up quietly, in advance of their maturity, by payment or conversion, such portions of the temporary debt as would obviate the necessity of accumulating large currency balances in the Treasury and at the same time relieve it from the danger of being forced to a further issue of legal-tender notes, or to a sale of bonds, at whatever price they might command. In carrying out this policy it seemed also to be the duty of the Secretary to have due regard to the interests of the people, and to prevent, as far as possible, the work of funding from disturb ing legitimate business. As financial trouble has almost invariably followed closely upon the termination of protracted wars, it was generally feared, as has already been remarked, that such trouble would be unavoidable at the close of the great and expensive war in which the United States had been for four years engaged. This, of course, it was important to avoid, as its occurrence might not only render funding difficult, but might prostrate those great interests upon which the Government depended for its revenues. It was and constantly has been, therefore, the aim of the Secretary so to administer the Treasury, while borrowing money and funding the temporary obligations, as to prevent a commercial crisis, and to keep the business of the country as steady as was possible on the basis of an irredeemable and constantly fluctuating currency. Whether his efforts have contributed to this end or not he does not undertake to say, but the fact is unquestioned that a great war has been closed, large loans have been effected, heavy revenues have

been collected and some thirteen hundred millions of dollars of temporary obligations have been paid shape, not only without a financial crisis, but withor funded, and a great debt brought into manageable out any disturbance to the ordinary business of the country. To accomplish these things successfully, the Secretary deemed it necessary, as has been before stated, that the Treasury should be kept constantly in a strong condition, with power to prevent the credit of the Government and the great interests of the people from being placed at the mercy of adverse influences. Notwithstanding the magnitude and character of the debt, this power the Treasury has for the last three years possessed; and it has been the well-known existence, rather than the exercise of it, which has in repeated instances saved the country from panic and disaster. The gold reserve, the maintenance of which has subjected the Secretary to constant and bitter criticism, has given a confidence to the holders of our securities, at home and abroad, by the constant evidence which it exhibited of the ability of the Government, without depending upon purchases in the market, to pay the interest upon the public debt, and a steadiness convertible value of the currency, which have been a to trade, by preventing violent fluctuations in the more than ample compensation to the country for any loss of interest that may have been sustained thereby. If the gold in the Treasury had been sold down to what was absolutely needed for the payment of the interest on the public debt, not only would the public credit have been endangered, but the currency; and, consequently, the entire business of the country would have been constantly subject to the dangerous power of speculative combinations.

One or two questions of importance in connection with the national debt were presented The first related to the currency in which the during the year, and attracted much attention. five-twenty bonds should be paid, whether in gold or in Government's notes (greenbacks). Those who advocated the payment of them in Government notes, urged that the fivetwenty bonds were issued intentionally without any provision in the acts requiring payment in gold, except as to the interest, and with a reserved purpose that the Government should be free to avail itself of the privilege of redeeming them pending the suspension of specie payments; and that with this view, the bonds were made payable, at the option of the Government, on the expiration of five years from the date of issue, in whatever might then be the legal-tender money of the country. This option, it was argued, was provided against by the probable contingency that, after the conclusion of peace, the Government might have an opportunity of taking up its obligations in the same depreciated paper for which it issued them, and of renegotiating its loans under the circumstances of the improved credit resulting from the restoration of the national authority.

To counteract these views, the subject of specie payments was brought forward and extensively discussed both in Congress and by the public press. No decisive action was taken on either proposition during the year. The following are the acts of Congress authorizing the issue of five-twenty bonds and also all the acts of Congress authorizing the issue of bonds or notes:

Act Authorizing the 6's of 1881. July 17, 1861-An act to authorize a national loan, and for other purposes.

SEC. 1. Be it enacted, etc., That the Secretary of the Treasury be, and he is hereby, authorized to borrow, on the credit of the United States, within twelve months from the passage of this act, a sum not exceeding $250,000,000, or so much thereof as he may deem necessary for the public service, for which he is authorized to issue coupon bonds, or registered bonds, or Treasury notes, in such proportions of each as he may deem advisable; the bonds to bear interest not exceeding seven per cent. per annum, payable semi-annually, irredeemable for twenty years, and after that period redeemable at the pleasure of the United States; and the Treasury notes to be of any denomination fixed by the Secretary of the Treasury, not less than $50, and to be payable three years after date, with interest at the rate of seven and threetenths per cent. per annum, payable semi-annually.

SEC. 2. That to enable the Secretary of the Treasury to fund the Treasury notes and floating debt of the United States, he is hereby authorized to issue, on the credit of the United States, coupon bonds, or registered bonds, to an amount not exceeding $500,000,000, redeemable at the pleasure of the United States after five years, and payable twenty years from date, and bearing interest at the rate of six per cent. per annum, payable semi-annually. And the bonds herein authorized shall be of such denominations, not less than $50, as may be determined upon by the Secretary of the Treasury. And the Secretary of the Treasury may dispose of such bonds at any time, at the market value thereof, for the coin of the United States, or for any of the Treasury notes that have been, or may hereafter be, issued under any former act of Congress, or for United States notes that may be issued under the provisions of this act; and all stocks, bonds, and other securities of the United States held by individuals, corporations, or associations, within the United States, shall be exempt from taxation by or under State authority.

Act creating a Sinking-Fund, etc. SEC. 5. That all duties on imported goods shall be paid in coin, or in notes payable on demand, heretofore authorized to be issued, and by law receivable in payment of public dues, and the coin so paid shall be set apart as a special fund, and shall be applied as follows:

First. To the payment in coin of the interest on the bonds and notes of the United States.

Second. To the purchase or payment of one per centum of the entire debt of the United States, to be made within each fiscal year after the 1st day of July, 1862, which is to be set apart as a sinking fund, and the interest of which shall in like manner be applied to the purchase or payment of the public debt, as the Secretary of the Treasury shall from time to time direct.

Third. The residue thereof to be paid into the Treasury of the United States.

Act Authorizing the 10.40's. March 3, 1864-An act supplementary to an act entitled "An act to provide ways and means for the support of the Government," approved March 3,

1863.

SEC. 1. Be it enacted, etc., That in lieu of so much of the loan authorized by the act of March 3, 1863, to which this is supplementary, the Secretary of the Treasury is authorized to borrow, from time to time, on the credit of the United States, not exceeding

$200,000,000, during the current fiscal year, and to prepare and issue therefor coupon or registered bonds of the United States, bearing date March 1, 1864, or any subsequent period, redeemable at the pleasure of the Government after any period not less than five years, and payable at any period not more than forty years from date, in coin, and of such denominations as may be found expedient, not less than $50, bearing interest not exceeding six per centum a year, payable on bonds not over $100 annually, and on all other bonds semi-annually in coin; and he may dispose of such bonds at any time, on such terms as he may deem most advisable, for lawful money of the United States, or, at his discretion, for Treasury notes, certificates of indebtedness, or certificates of deposit, issued under any act of Congress; and all bonds issued under this act shall be exempt from taxation by or under State or municipal authority. And the Secretary of the Treasury shall pay the necessary expenses of the preparation, issue, and disposal of such bonds out of any money in the Treasury not otherwise appropriated; but the amount so paid shall not exceed one-half of one per centum of the amount of the bonds so issued and disposed of.

Act Authorizing the Consolidated Loan of 1865. March 3, 1865-An act to provide ways and means to support the Government.

SEO. 1. Be it enacted, etc., That the Secretary of the Treasury be, and he is hereby, authorized to borrow, from time to time, on the credit of the United States, in addition to the amounts heretofore authorized, any sums not exceeding in the aggregate $600,000,000, and to issue therefor bonds or Treasury notes of the United States, in such form as he may prescribe; and so much thereof as may be issued in bonds shall be of denominations not less than $50, and may be made payable at any period not more than forty years from date of issue, or may be made redeemable, at the pleasure of the Government, at or after any period not less than five years nor more than forty years from date, or may be made redeemable and payable as aforesaid, as may be expressed upon their face; and so much thereof as may be issued in Treasury notes may be made convertible into any bonds authorized by this act, and may be of such denominations-not less than $50-and bear such dates and be made redeemable or payable at such periods as in the opinion of the Secretary of the Treasury may be deemed expedient. And the interest on such bonds shall be payable semi-annually; and on Treasury notes authorized by this act the interest may be made payable semi-annually, or annually, or at maturity thereof; and the principal or interest, or both, may be made payable in coin or in other lawful money: Provided, That the rate of interest on any such bonds or Treasury notes, when payable in coin, shall not exceed six per cent. per annum; and when not payable in coin shall not exceed seven and three-tenths per cent. per annum ; and the rate and character of interest shall be expressed on all such bonds or Treasury notes.

Act creating Legal Tenders.

*

February 25, 1862-An act to authorize the issue of United States notes and for the redemption or funding thereof, and for funding the floating debt of the United States. SEC. 1. * 告 And provided further, That the amount of the two kinds of notes together shall at no time exceed the sum of $150,000,000, and sucli notes herein authorized shall be receivable in payment of all taxes, internal duties, 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,

Act limiting the Amount of "Greenbacks." June 30, 1864.-An act to provide ways and means for the support of the Government, and for other

purposes.

SEC. 1. Be it enacted, etc., That the Secretary of the Treasury be, and he is hereby, authorized to borrow, from time to time, on the credit of the United States, $400,000,000, and to issue therefor coupon or registered bonds of the United States, redeemable at the pleasure of the Government, after any period not less than five, nor more than thirty years, or, if deemed expedient, made payable at any period not more than forty years from date. And said bonds shall be of such denominations as the Secretary of the Treasury shall direct, not less than fifty dollars, and bear an annual interest not exceeding six per centum, payable semi-annually in coin. And the Secretary of the Treasury may dispose of such bonds, or any part thereof, and of any bonds commonly known as five-twenties remaining unsold, in the United States, or, if he shall find it expedient, in Europe, at any time, on such terms as he may deem most advisable, for lawful money of the United States, or, at his discretion, for Treasury notes, certificates of indebtedness, or certificates of deposit issued under any act of Congress. And all bonds, Treasury notes, and other obligations of the United States, shall be exempt from taxation by or under State or municipal authority.

SEC. 2. That the Secretary of the Treasury may issue on the credit of the United States, and in lieu of an equal amount of bonds authorized by the preceding section, and as a part of said loan, not exceeding $200,000,000 in Treasury notes, of any denomination not less than ten dollars, payable at any time not exceeding three years from date, or, if thought more expedient, redeemable at any time after three years from date, and bearing interest not exceeding the rate of seven and three-tenths per centum, payable in lawful money at maturity, or, at the discretion of the Secretary, semi-annually. And the said Treasury notes may be disposed of by the Secretary of the Treasury, on the best terms that can be obtained, for lawful money; and such of them as shall be made payable, principal and interest, at maturity, shall be a legal tender to the same extent as United States notes for their face value, excluding interest, and may be paid to any creditor of the United States at their face value, excluding interest, or to any creditor willing to receive them at par, including interest, and any Treasury notes issued under the authority of this act may be made convertible, at the discretion of the Secretary of the Treasury, into any bonds issued under the authority of this act. And the Secretary of the Treasury may redeem and cause to be cancelled and destroyed any Treasury notes or United States notes heretofore issued under authority of previous acts of Congress, and substitute, in lieu thereof, an equal amount of Treasury notes such as are authorized by this act, or of other United States notes: Provided, That the total amount of bonds and Treasury notes authorized by the first and second sections of this act shall not exseed $400,000,000, in addition to the amounts heretofore issued; nor shall the total amount of United States notes, issued or to be issued, ever exceed 80,000,000, and such additional sum, not exceeding 850,000,000, as may be temporarily required for the redemption of temporary loan; nor shall any Treasary note bearing interest, issued under this act, be a legal tender in payment or redemption of any notes issued by any bank, banking association, or banker, calculated or intended to circulate as money.

The Funding Bill, July 25, 1868. An act providing for payment of the national debt,

and for the reduction of the rate of interest thereon. Be it enacted, etc., That the Secretary of the Treas

a

tered bonds of the United States, in such form as he may prescribe, and of denominations of one hundred dollars, or any multiple of that sum, redeemable in coin at the pleasure of the United States after thirty and forty years, respectively, and bearing the following rates of yearly interest, payable semi-annually in coin, that is to say: The issue of bonds falling due in thirty years shall bear interest at four and half per centum; and bonds falling due in forty years shall bear interest at four per centum; which said bonds and the interest thereon shall be exempt from the payment of all taxes or duties to the United States, other than such income tax as may be assessed on other incomes, as well as from taxation in any form by or under State, municipal, or local authority, and the said bonds shall be exclusively used, par for par, for the redemption of or in exchange for an equal amount of any of the present outstanding bonds of the United States known as the five-twenty bonds, and may be issued to an amount, in the aggregate, sufficient to cover the principal of all such five-twenty bonds, and no more.

SEC. 2. That there is hereby appropriated out of the duties derived from imported goods the sum of one hundred and thirty-five millions of dollars annually, which sum, during each fiscal year, shall be applied to the payment of the interest and to the reduction of the principal of the public debt in such a manner as may be determined by the Secretary of the Treasury, or as Congress may hereafter direct; and such reduction shall be in lieu of the sinking fund contemplated by the fifth section of the act entitled "An act to authorize the issue of United States notes, and for the redemption or funding thereof, and for funding the floating debt of the United States," approved February twenty-fifth, eighteen hundred and sixty-two.

SEC. 3. That from and after the passage of this act no percentage, deduction, commission, or compensation of any amount or kind shall be allowed to any person for the sale, negotiation, redemption, or exchange of any bonds or securities of the United States, or of any coin or bullion disposed of at the Treasury Department or elsewhere on account of the United States; and all acts or parts of acts authorizing or permitting, by construction or otherwise, the Secretary of the Treasury to appoint any agent, other than some proper officer of his department, to make such sale, negotiation, redemption, or exchange of bonds and securities, are hereby repealed.

Another proposition, which received some favorable consideration, was to postpone the payment of any part of the principal of the public debt until the national resources should be so increased as to make the payment more

easy.

The opinion has heretofore been steadily maintained by the Treasury Department, that a reduction of the paper circulation of the country until it appreciated to the specie standard was the true way out of the financial embarrassments of the country. This policy was decidedly condemned by Congress, and an act passed limiting the amount of reduction which might be made. It is now, therefore, abandoned by the Department, which recommends as the next best step that coin contracts should be legalized. At present* the courts will not enforce contracts or agreements made for the payment of coin. In all the States except California, coin contracts made before the passage of the legal-tender acts, as well as those

The legality of coin contracts was sustained by a decision of the Supreme Court in February, 1869.