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HIS EARLY FINANCIAL OPERATIONS. 213

94 and upward—realizing to the Treasury $7,814,809.80. All offers under 94 were declined; the firmness of the Secretary in declining them, while it disappointed many, served to inspire general confidence; and if his action did not raise, it certainly preserved from a further decline, the already miserably depressed condition of the public credit. It showed clearly enough that the finances were to be controlled more with reference to the intrinsic value of the Government securities than to the wishes or interests of brokers and speculators. On the 4th of April he awarded at par (and $360,000 at a slight premium) $4,901,000 six per cent. two-years' Treasury notes receivable for public dues, or at the holder's option, convertible into six per cent. United States stocks. The means derived from these negotiations were, however, insufficient to supply even immediate wants. On the 21st of May (after hostilities were begun), under a public notice of the 11th of that instant, he awarded $7,310,000 of the 8th of February loan at rates varying from 85 to 93 per cent, and $1,689,000 in Treasury notes at par, realizing for the $8,994,000 offered the sum of $7,922,553.45 to the Treasury. He also issued Treasury notes to offerers at par and to public creditors up to July 4th to the amount of $2,584,550. Viewing these transactions in connection with the turbulent condition of the country, they cannot be regarded as any thing less than remarkably successful. He was selling Government stocks at an average discount of about six per cent, which contrasts strongly with the rates at which British debt was contracted during the French wars. The great rebellion was inaugurated on the 12th of April by the attack on Sumter. On the 13th the fort was surrendered; on the 14th the President issued his call for seventy-five thousand troops. These events were followed by a general rally to arms, both North and South, for that tremendous struggle the end whereof human foresight could not predict. But doubt and suspense were dispelled: the emblems of war appeared on every side; the enemies of coercion were hushed by the general voice of the people; and herein at least there was an improvement in the public condition. But the finances suffered severely from these occurrences. They were sustained by the courage and genius of the Secretary and the confidence these qualities inspired. Many prominent and influential capitalists came forward in this important conjuncture and by prompt assistance rendered enduring services to the Federal cause; much of this action being due to a personal confidence in the character and abilities of the Secretary. Congress, in obedience to the summons of the President, assembled at the capital on the 4th of July. Dominated by the unanimous attitude of the people, that body was prompt and energetic in its action. Men and means were voted in numbers and amount then thought prodigal and extravagant. Other views were learned, however, from the lessons of experience. It is from this time forward that the distinctive policy of Mr. Chase is to be considered. Hitherto he had acted under authority conferred by existing laws; and with such large measure of success as to create a general confidence in the wisdom and effectiveness of his administration. Before entering, however, upon a further history' of those gigantic financial operations which excited astonishment in the Old World and boastfulness in the New, it will be proper to exhibit the transactions for the fiscal year ending June 30, 1861. The public debt at its beginning, July 1, 1860, was $64,769,703.08. The balance in the Treasury at that date was $3,629,206.71; the total receipts for the year—from all sources—were $86,972,893.81. Of this aggregate sum $39,593,819.81 were on account of customs duties ($35,417,102.11 of which were in coin and $4,176,717.70 in Treasury notes); $824,687.80 were derived from sales of public lands; $861,096.54 from miscellaneous sources, and $42,064,082.95 were from loans. The expenditures for the same period were $84,577,258.60; of which $23,188,203.19 were on account of the civil list, foreign intercourse, and miscellaneous objects; $3,760,022.72 were expended by the Interior Department; $22,981,150.44 by the War Department, over ten millions ($10,108,784.59) in the last three months of the year; $12,428,532.09 were expended by the Navy

* I beg to remind the reader, however, that it is not my purpose to enter upon all the details of Mr. Chase's administration, but rather to describe those principal transactions which are of permanent interest and importance.

TREASURY TRANSACTIONS FOR 1861. 215

Department; for redemption of Treasury notes and Texas creditors $18,219,207.27, the last week of the year being estimated; and for payment of interest on the public debt (which was stated July 1, 1861, to be $90,867,828.68), the last week in the fiscal year being also estimated, $4,000,142.89; leaving a balance in the Treasury of $2,355,635.21. The public debt of the United States on the 7th of March, 1861, at which date Mr. Chase assumed control of the department, was officially stated at $76,455,299.28; the increase in its amount up to the end of the fiscal year (a period of nearly four months) being $14,412,529.40.

O H.A. PTER XXV.

ESTIMATES FOR FISCAL YEAR 1862—PROPOSES INCREASED DUTIES oN TEAs, COFFEES, AND SUGARs, A DIRECT TAx OF Two NTY MILLIONS OF DOLLARS, AND A NATIONAL LOAN OF ONE HUNDRED MILLIONS-THE BASIS OF HIS ESTIMATES-ACTION OF CONGRESS UPON HIS RECOMMENDATIONs—ISSUE OF THE “DEMAND NOTEs”—conFERENCEs witH THE COMMITTEE of THE Associated BANKS OF NEW YORK, PHILADELPHIA, AND BOSTON —BORROWS ONE HUNDRED AND FIFTY MILLIONS OF DOLLARS.

R. CHASE estimated the whole sum required for the fiscal year to end June 30, 1862, at $318,519,581.87: that is to say, for the war service, $185,296,397.19; for the naval service, $30,609,520.29; for the civil list, foreign intercourse, and miscellaneous objects, $831,406.90; for the Interior Department, $431,525.77; total, $217,168,850.15; to pay Treasury notes due and to become due, $12,639,861.64; to meet former appropriations, $79,710,870.08; and to pay interest on proposed new debt, $9,000,000. Three hundred and twenty millions being required, he proposed to raise eighty millions by taxes and two hundred and forty millions by loans. It would hardly be disputed, he observed, that in every sound system of finance adequate provision by taxation for the prompt discharge of all ordinary demands, for the punctual payment of interest on loans, and for the creation of a gradually increasing fund for the redemption of the principal, is indispensable. Public credit can only be created by public faith, and public faith can only be maintained by an economical, energetic and prudent administration of public affairs,

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