HIS PROPOSED FINANCIAL MEASURES.

217 and by the prompt and punctual fulfillment of every public obligation.

Except on occasions of special exigency, no resort had been had to direct taxes or to internal duties on excises. Indirect taxation had been the general preference of the people, and the Secretary proposed no departure from the policy they had sanctioned.

But the existing tariff, framed with reference to a very different condition of affairs, was clearly inadequate to produce the necessary revenue for the ordinary expenses. The receipts for the last fiscal quarter had been but five millions and a half ($5,527,246.33), though he anticipated during the next year a very considerable improvement. The sources of revenue most promptly available were to be found in articles either free of duty or very lightly taxed. Tea and coffee were wholly exempt, and the duty on sugar was light. By a duty of two and a half cents on brown, three cents on clayed, four cents on loaf and other refined sugars; two and one half cents per pound on syrup of sugar-cane; six cents per pound on candy; six cents a gallon on molasses, and four cents on sour molasses; five cents a pound on coffee; fifteen cents on black and twenty cents a pound on green teas-would produce an additional revenue of twenty millions of dollars; and he was sure the intelligent patriotism of the people would cheerfully sustain these necessary charges. Proposed duties on other articles then free, and changes upon some so heavily taxed as to amount to prohibition, would produce a further revenue of seven millions. From the existing tariff he expected an income of thirty millions; from the additional duties twenty-seven millions, and to this were to be added three millions to be derived from sales of public lands and miscellaneous sources-total sixty millions.

He proposed to raise twenty millions by direct taxes, or from internal duties or excises, or from both.

The value of the real and personal property of the people of the United States was, according to the census of 1860, sixteen thousand millions of dollars ($16,102,924,116). The value of the real property was $11,272,053,881, and of the personal property $4,830,880,235. The proportion in the States not involved in the rebellion was $10,900,758,009, of which $7,630,530,605

represented the value of the real and $3,270,227,404 the value of the personal property. A rate of one-eighth of one per cent. ad valorem on the whole would produce $20,128,667; a rate of one-fifth of one per cent. would produce $21,800,516, and threetenths of one per cent. on real property alone would produce $22,891,590; either sum being in excess of the amount required.

He thought internal duties might be more cheaply collected than direct taxes, and with less interference with the finances of the States. They might also be made to bear mainly upon articles of luxury, and thus diminish the burden imposed by duties on imports upon the classes of people least able to bear them.

But the needed sum might also be collected, in the judgment of the Secretary, by moderate charges on stills and distilled liquors, on ale and beer, on tobacco, on bank-notes, on spring carriages, on silver-ware and jewelry, and on legacies. If all the suggested sources of revenue were resorted to, the amount required from loans would be proportionally diminished, and the basis of the public credit enlarged and strengthened.

Moreover, he suggested retrenchment in salaries of the employés of the Government and the abolition of the franking privilege; and the confiscation of the property of rebels.

The only authority he had for obtaining loans was found in the act of March 2, 1861, authorizing an issue of bonds bearing an interest of six per cent., or in default of offers at par the payment of Treasury notes, bearing the same interest, at par, to the amount of ten millions; and in the act of June 22, 1860, under which Treasury notes at six per cent. might be paid to creditors at par, to the amount of $11,393,450; making an aggregate of $21,393,450. The magnitude of the public necessities required further measures.

He submitted the expediency of a NATIONAL LOAN of not less than one hundred millions, to be issued in the form of Treasury notes or exchequer bills, bearing interest at seven and threetenths per cent., to be paid half-yearly, and redeemable at the pleasure of the United States after three years.

He suggested interest at the rate of seven and three-tenths per cent., because it was equitable to both borrower and lender, and peculiarly convenient of calculation; but he did not propose to restrict loans in this form to any precise limit short of the en

PROPOSED FINANCIAL MEASURES

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tire sum that might be required, in addition to sums realized from other sources, for all the purposes of the year. He proposed to open subscription-books in the office of the United States Treasurer at Washington, and in the offices of assistanttreasurers and depositories of public moneys, and in the postoffices of such cities and towns as might be designated, and to appoint private persons to open books. Subscriptions were to be received for fifty or any multiple of fifty dollars. He was sure such a loan would be responded to by the people promptly and liberally. But if it was found inexpedient (note the delicacy of this expression!) to provide the whole amount needed in the foregoing mode, he proposed to issue one hundred millions of bonds to home and foreign lenders at rates not lower than par, payable in thirty years, at a rate of interest not exceeding seven per cent, payable in London.

As an auxiliary measure, and for whatever sums might be needed to supply the full amount required for the service of the fiscal year, the Secretary recommended provision for the issue of Treasury notes of ten, twenty, and twenty-five dollars each, payable one year after date, to the amount of fifty millions. He proposed that these notes should bear interest at the rate of three and sixty-five one-hundredths per cent., and be exchangeable, at the will of the holder, for Treasury notes or exchequer bills, payable after three years, bearing seven and three-tenths per cent. interest; or if found more convenient they might be made redeemable on demand in coin without interest. In either form, such notes might prove very useful if prudently used in anticipation of revenue certain to be received.

"But the greatest care will be requisite," he added, "to prevent the degradation of such issues into an irredeemable paper currency, than which no more certainly fatal expedient for impoverishing the masses and discrediting the government of any country, can well be devised."

The estimates of the war expendi port of Mr. Chase were rested upo hundred thousands of all arr would he brou

for the purpose of suppressing the rebellion, and that it could be ended in a year. The number actually at the command of the Government on the 1st of July, 1861, was three hundred and ten thousand, but of these eighty thousand were three months' men, whose terms of service would shortly expire. Mr. Cameron (Secretary of War) at that particular period suffered embarrassments of a remarkable character; too many troops were offering. He reminded the world of the superior military ardor and resources of the republic; "instead of laboring under the difficulty of monarchical governments in the want of men to fill its armies (which in other countries has compelled a resort to forced conscription), one of its main difficulties is to keep down the proportions of the army, and prevent it from swelling beyond the actual force required," was a very clumsy and ungrammatic statement of a difficulty in the path of Mr. Cameron and the republic which grew less as the war wore painfully on, and finally disappeared altogether. With his report Mr. Chase transmitted bills' embodying the recommendations it contained.

To these proposed measures Congress responded promptly: The loan act of July 17, 1861, empowered the Secretary to borrow two hundred and fifty millions of dollars, or so much of that sum as he should deem necessary for the public service. Against this bill but five votes were cast in the House-those of Messrs. Burnett, of Kentucky, Norton and Reid, of Missouri, Vallandigham, of Ohio, and Fernando Wood, of New York.

It gave the Secretary authority to issue coupon or registered bonds or both, or Treasury notes of any denomination not less than fifty dollars; the bonds to be redeemable after twenty years from their date and to bear an interest not exceeding seven per cent.; the Treasury notes to be payable after three years, and to bear interest at the rate of seven and three-tenths per cent. per annum.

1 These bills were: "6 A bill to authorize a national loan, and for other purposes," and "a bill further to provide for the collection of duties on imports, and for other purposes." The latter was intended especially to enforce the collection of customs duties in the insurrectionary States. Mr. Chase invited Senators Fessenden and Collamer to Washington to consult with them in respect to the measures embodied in these bills, and they were approved by them with some very slight modifications, as they were afterward approved by Congress in the same way. But emphatically they were the work of Mr. Chase's own hand.

THE ACTION OF CONGRESS.

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And to issue, also, in exchange for coin or in payment of salaries or other dues of the United States, Treasury notes of a less denomination than fifty dollars, bearing no interest, but payable on demand, and (by the supplemental loan act of August 5, 1861) receivable for public dues; or Treasury notes, bearing interest at the rate of three and sixty-five one-hundredths per cent., payable one year after their date, and exchangeable in sums of one hundred dollars or upward for the seven-thirty three years' Treasury notes. The non-interest bearing notes were limited to fifty millions in amount and to denominations not less than ten dollars; but, August 5th, he was authorized to issue notes under this clause so low in sum as five dollars.

He was authorized to negotiate one hundred millions of the loan in Europe, and to pay the interest upon it in Europe. He was to fix the rate of exchange at which the principal was to be received, and the exchange for payment of principal and interest was to be at the same rate. And by the supplemental loan act of August 5th, six per cent. bonds were authorized to the amount of the seven-thirty Treasury notes issued under the act of July 17th, into which six per cents the seven-thirty Treasury notes were to be convertible.

He was also authorized to issue not exceeding twenty millions of the Treasury notes, of any of the denominations named in the act, at an interest of six per cent., and payable at any time not exceeding twelve months from their date.

And finally, to appoint agents to receive subscriptions to the loan; and if he thought most expedient, to sell bonds at the best terms he could obtain, not below par.

So far of the action of Congress authorizing the Secretary of the Treasury to borrow money.

-The definite appropriations made during the extraordinary session amounted to two hundred and sixty-five millions of dolars; and there were made indefinite appropriations to a considerable amount. The war service was voted $207,401,397.80; the naval service, $56,385,086.29; and for civil and miscellaneous purposes $1,371,873.90-total, $265,158,357.99. These were in addition to former appropriations unpaid and to be satisfied out of the funds raised during the ensuing year.

A large number of new offices-military and civil-were