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and the expenditures would still continue very tures of the United States from October 1, large. The following is a statement of the es- 1865, to June 30, 1866, the last three quarters timated and tho actual receipts and expendic of the fiscal year:

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balance. ....

$372,658,515 44 $462,564,420 88 EXPENDITURES.

Estimated.

Actual.

Excess of estimates. Civil service.....

$32,994,052 38 $30,485,500 55 $2,508,551 83 Pension and Indians...

12,256,790 94 11,061,285 79 War Department.

1,195,505 15

807,788,750 57 119,080,464 50 188,708,286 07 Navy Department.

85,000,000 00

26,802,716 31 8,197,283 69 Interest on public debt..

96,813,868 75 96,894,260 19 Deduct deficiency in estimate for interest on

$200,609,626 74 public debt.

80,391 44 $484,853,462 64 $284,324, 227 84 $200,529,235 30

RECAPITULATION. Actual receipts, including cash balance..

$462,564,420 88 Estimated receipts, including cash balance.

372,658,515 44 Excess of receipts over estimates..... Estimated expenditures...

89,905, 905 44

484,853,462 64 Actual expenditures..

284,324,227 84 Actual expenditures less than estimated.

200,529,235 30 The actual receipts and expenditures for the fiscal year ending June 30, 1866, were as follows: Balance in Treasury, agreeable to warrants, July 1, 1865...

$858,309 15 To which add balance of sundry trust funds not included in the above

2,217,732 94 Making balance, July 1, 1865, including trust fund.

$3,076,042 09 Receipts from loans...

712,851,553 05 Receipts from customs..

$179,046,651 58 Receipts from land...

665,031 03 Receipts from direct tax.

1,974,754 12 Receipts from internal revenue..

309, 226,813 42 Receipts from miscellaneous sources.

67,119,369 91

$558,032,620 06

$1,273,960,215 20 Redemption of public debt.

$620,321,725 61 For the civil service....

$41,056,961 54 For pensions and Indians..

18,852,416 91 For the War Department..

284,449, 701 82 For the Navy Department.

43, 324, 118 52 For interest on public debt.

133,067,741 69
520,750,940 48

$1,141,072,666 09 Leaving a balance in the Treasury on the first day of July, 1866..

$132,887,549 11 These were the results of the ordinary Secretary relative to a deficiency, neither werė sources of revenue and expenditure during the the majority in favor of such a speedy return fiscal year ending June 30, 1866, leaving in the to specie payments. An act was therefore Treasury a balance of more than 132 millions. passed and approved April 12, 1866, as an The Secretary had anticipated a deficiency ex- amendment to the act of March 3, 1865, menceeding 112 millions, and at the same time he tioned in a former volume, which extended the sad urged that a system of contraction of the latter act and so construed it as to authorize currency should be commenced, which would in the Secretary of the Treasury, at his discretion, a short period greatly reduce value and aid to receive any Treasury notes, or other obligain a return to specie payments. Congress, how- tions issued under any act of Congress, whether over, did not entertain similar views with the bearing interest or not, in exchange for any

VOL, V1.-19

This act,

description of bonds authorized by the act of millions of dollars in any one month. 1863; and also to dispose of any description of while it enabled the Secretary to use with more bonds authorized by said act either in the freedom the extraordinary resources of the United States, or elsewhere, to such an amount, Government on hand and unexhausted, also in such manner, and at such rates, as he might by limiting the contraction of the currency, sethink advisable, for lawful money of the United cured the liberal payment of taxes both under States, or for any Treasury notes, certificates of the tariff and internal revenue laws. At the indebtedness, or certificates of deposit, or other same time these two acts were revised in order representatives of value used under any act of to diminish the burden they caused to the Congress and to use the proceeds only for re- people and facilitate the increase of revenue. tiring Treasury notes, or other obligations of The consequence was that, at the close of the the Government. Nothing herein contained fiscal year in June 30, 1866, the Secretary was was to be construed as authorizing any increase able to show a net decrease of the public debt of the public debt. To this act there was at- amounting to $31, 196,387.23, with an increase tached a proviso which limited the contraction of the cash in the Treasury over the close of of the currency, by specifying that not more the previous year amounting to $132,029,239.96. than ten millions of United States notes might The following statement exhibits the items be retired and cancelled within the ensuing of increase and decrease of the public debt for six months, and thereafter not more than four the fiscal year ending June 30, 1866 : Amount of public debt, June 30, 1865..

$2,682,593,026 53 Amount of cash in Treasury..

858,309 15 Amount of public debt, June 30, 1865, less cash in Treasury.

$2,681,734,717 88 Amount of public debt, June 30, 1866.

$2,783,425,879 21 Amount of cash in Treasury...

132,887,549 11 Amount of public debt, June 30, 1866, less cash in Treasury..

$2,650,538,330 10 Net decrease..

$31,196,387 23 This decrease was caused as follows, by payments and increase of cash in Treasury : Bonds, 6 per cent., acts of July 21, 1841, and April 15, 1842..

$116,139 77 Treasury notes, 6 per cent., acts December 23, 1857, and March 2, 1861.

2,200 00 Bonds, 5 per cent., act September 9, 1850 (Texas indemnity).

283,000 OC Treasury notes, 7.30, act July 17, 1861..

380,750 03 Certificates of indebtedness, 6 per cent., act March 1, 1862.

89,381,000 00 Treasury notes, 5 per cent., 1 and 2 year, act March 3, 1863.

38,884,480 00 Compound-interest notes, 6 per cent., act June 30, 1864..

34,743,940 00 Bonds, 5 per cent., act March 3, 1864...

1,551,000 00 United States notes, acts July 17, 1861, and February 12, 1862..

200,441 00 United States notes, acts February 25, July 11, 1862, and March 3, 1863.

82,068,760 00 Postal currency, act July 17, 1862.

2,884,707 88 Cash in Treasury, increased..

182,029,239 96 Gross decrease...

-$332,525,658 61 From which deduct for increase, byBonds, 6 per cent., acts July 1, 1862, and July 2, 1864, issued to Central Pacific R. R. Co., &c., interest payable in lawful money:

$4,784,000 00 Treasury notes, 7.30, acts June 30, 1864, and March 3, 1865, interest payable in lawful money.

134,641,150 00 Temporary loan, 4, 5, and 6 per cent., acts July 11, 1862, and June 30, 1864.

30,459,135 25 Gold certificates, act March 3, 1863.

4,949,756 08 Fractional currency, act March 3, 1863.

10,713,180 00 Bonds, 6 per cent., act July 17, 1861.

$146,050 Bonds, 6 per cent., act March 3, 1864.

3,882,500 Boods, 6 per cent., act June 30, 1864.

8,211,000 Bonds, 6 per cent., act March 3, 1865.

103,542,500

$115,782,050 00 Gross increase..

$301,329,271 33 Net decrease..

31,196,387 28 The rapid progress of liquidation shown by The following statement exhibits the items the preceding figures went on with increased of increase and decrease of the public debt from momentum during the next quarter, and it be- June 30, 1866, to October 31, 1866. came manifest that if the people of the country It shows a decrease of the public debt in foar were able to endure such powerful depletion months by $99,114,208.90, and a decrease of without serious inconvenience to their industrial the cash in the Treasury amounting to $2,560,pursuits, the arrangements of Congress were 588.49. The net decrease in the public debt complete for an early extinguishment of the as from its highest point in August 31, 1865, to certained and acknowledged public debt. October 31, 1866, was $206,379,565.71.

Amount of public deot, June 30, 1866..

$2,783,425,879 21 Amount of cash in Treasury..

132,887,549 11 Amount of public debt, June 30, 1866, less cash in Treasury.

$2,550,538,380 10 • Amount of public debt, October 31, 1866...

$2,681,636,966 34 Add amount of old funded and unfunded debt included in debt of June 30, 1866, not in statement...

114,115 48

$2,681,751,081 82 Amount of cash in Treasury.....

130,326,960 62 Amount of public debt, October 31, 1866, less cash in Treasury.

$2,551,424,121 20, Net decrease.....

$99,114, 208 90 Which decrease was caused as follows, by payments : Bonds, 6 per cent., acts July 21, 1841, and April 15, 1842.

$14,500 00 Bonds, 6 per cent., act of January 28, 1847...

1,672,450 00 Bonds, 6 per cent., act March 31, 1848.

617,400 00 Bonds, 5 per cent., act September 9, 1850 (Texas indemnity).

175,000 00 Bonds, 5 per cent., act March 3, 1864 (Ten-forties)....

149,750 00

$2,629,100 00 Treasury notes, 6 per cent., acts December 23, 1857, and March 2, 1861.

6,150 00 Temporary loan, 4, 5, and 6 per cent., acts February 25, March 17, July 11, 1862, and June 30, 1864...

75,172,997 76 Certificates of indebtedness, 6 per cent., acts March 1, 1862, and March 3, 1863.

26, 209,000 00 Treasury notes, 5 per cent., one and two year, act March 3, 1863..

500,000 00 Treasury notes, Seven-thirty, act July 17, 1861..

11,200 00 Compound-interest notes, 6 per cent., act June 30, 1864.

10,500,000 00 Treasury notes, Seven-thirty, acts June 30, 1864, and March 3, 1865.

82,237,250 00 United States notes, acts July 17, 1861, and February 12, 1862.

3,804 00 United States notes, acts February 25, July 11, 1862, and March 3, 1863..

10,691,779 00 Postal cnrrency, act July 17, 1862..

691,031 75 Gross decrease.....

$208,652,312 61 From which deduct for increase of debt and decrease of cash in Treasury: Bonds, 6 per cent., act July 17, 1861.

$7,050,000 00 Bonds, 6 per cent., act March 3, 1865..

101,738,500 00 Bonds, 6 per cent., acts July 1, 1862, and July 2, 1864, issued to Central Pacific Railroad Co., &c., interest payable in lawful money.

3,840,000 00 Gold certificates, act March 3, 1863..

183,800 00 Fractional currency, acts March 3, 1863, and June 31, 1864..

1,208,165 12 Cash in Treasury, decreased...

2,560,588 49

$109,538, 103 61 Net decrease....

$99,114, 208 90 The following table (see page 292) shows the ness in any considerable degree, while business indebtedness of the United States on the 30th was conducted on a paper basis, there must be of June, 1866.

power in the Treasury to prevent successful The reduction of the paper circulation under combinations to bring about fluctuations for the legislation of Congress above mentioned purely speculative purposes. The Secretary was limited to $10,000,000 for the six months expressed his conviction that specie payments ending October 12th, and $4,000,000 per

month were not to be restored by an accumulation of thereafter. In the mean time the reduction of coin in the Treasury, to be used at a future these notes and of the notes of the State banks day to redeem Government obligations, but by was nearly balanced by the increase of the cir- quickened industry, increased productions, and cnlation of the National Banks, and the pre- lower prices. Coin was therefore permitted mium on specie was about the same at the to accumulate when the use or sale of it close as at the beginning of the year. The was not necessary for paying Government Secretary, therefore, devoted his attention to obligations, or to prevent commercial panics, measures looking to an increase of the efficiency or successful combinations against the national of the collection of the revenues, to the conver- credit; and it has been sold whenever sales sion of the interest-bearing notes into five were necessary to supply the Treasury with twenty bonds and to a reduction of the public currency, to ward off financial crises, or to debt. At the same time he endeavored to use save the paper circulation of the country, as such means within bis control, as were best far as practicable, from unnecessary and damcalculated to keep the business of the country aging depreciation. as steady as possible, while conducted on the The importance of specie payments is urged uncertain basis of an irredeemable currency. by the Secretary, and in his remarks on the He therefore held a handsome reserve of coin subject, he thus incidentally describes the conin the Treasury, being convinced by observation dition of the country: “When a paper curand experience that, in order to secure steadi- rency is an inconvertible currency, and espe

STATEMENT OF THE INDEBTEDNESS OF THE UNITED STATES, JUNE 30, 1866.

[graphic]

$79,268 69 9,415,250 00 8,908,341 80

559,000 00 114,115 43 104,511 64

8,600 00 20,000,000 00 7,022,000 00

600 00 18,415,000 00

3,800 00 1,016,000 00 50,000,000 00 139,301,700 00

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3,454,290 00 10,718,180 00 171,219,100 00

8,882,500 00 26,891,000 00 7,030,700 78 20,040,176 18 100,000,000 00

159,012, 140 00

After June 14, 1868. 7.3-10 per ct. Par. 600,000,000

After July 14, 1868. 5 or 20

After Oct. 81, 1870. 6 per cent. Par. years.

1.8-10 treas'y notes,

three issues..

806,251,550 00

103,542,500 oe

Five-twenties ....
Union Pacific R.R.

Co. bonds.......

30 years.

After Jan. 15, 1895.

6 per cent. Par.

6,042,000 0 $2,788,425,879 21

cially when, being so, it is made by the sove is almost as light as any paper which can be ereign power a legal tender, it becomes prolific produced, even by the genius of the hydroof mischief. Then specie becomes demonetized static power at the Treasury Department, and it and trade is uncertain in its results, because the once more rises and floats triumphantly over basis is fluctuating; then prices advance as the the dirty sea of paper currency in vulgar fracvolume of currency increases, and require as tions." The gold certificates of deposit were they advance further additions to the circulating conveniently and daily used by millions for medium; then speculation becomes rife, and many purposes, especially to pay for exchange 'the few are enriched at the expense of the in the liquidation of foreign accounts and many;' then industry declines, and extrava- among gold operators. Bills of exchange begance is wanton; then, with a diminution of came a currency, and an enormous amount was products and consequently of exports, there is afloat. The compound-interest notes were an increase of imports, and higher tariffs are largely used, and almost universally, though required on account of the general expansion, to without authority, took the place of the United which they in their turn give new stimulus and States legal tender notes in the reserve required supports, while the protection intended to be to be held by the national banks. In some given by them to home industry is in a great instances the seven-thirties took the place of measure rendered inoperative by the expansion. lawful money, and were given and taken in This, notwithstanding our large revenues and financial transactions at their current value. the prosperity of many branches of industry, To some extent also the coupon bonds of the is substantially the condition of the United United States were used as money, and remitted States."

to pay balances due-especially balances of trade The paper circulation of the country on due abroad. (See Banks.) December 1st, consisted of United States notes, Such was the state of the public debt and National and State bank-notes and certificates the circulating medium at the close of the year. of the Government divided as follows:

It remains, therefore, to present the operation

of the internal revenue system, of the tariff, United States notes, legal tender.... $385,441,849 and the commercial condition, to have a comFractional currency... Circulation issued to National Banks... 292,671,753 plete view of the problem presented for solo State bank-notes....

46,533,060 tion to the Government and the people.

Previous to the year 1861, the United States

$753,266,911 presented the unusual spectacle of a great naTo this should be added a considerable por- the measures required for the maintenance of

tion with comparatively no debt. Since then tion of the following items:

the Government have entailed upon the nation Gold certificates of deposit..

$19,638,500 a debt rivalling or exceeding in magnitude the Compound-interest notes.....

147,387,140 accumulated debts of any of the old states of

$167,025,640 Europe, and rendering necessary the collection Total.......

$920,292,551 of an annual revenue, which may be safely

stated as unequalled by the collections of any It was also estimated that there were amounts other nations excepting Great Britain and of specie in circulation, as follows:

France. While the accumulation of this debt Specie in actual circulation on the Pa

was in progress the present system of internal cific

$25,000,000 revenue was adopted to aid in obtaining the Specie in actual circulation in the Atlan

money necessary for military and naval operatic States.

15,000,000 Copper and nickel.

3,000,000

tions. The pressing nature of the circum

stances under which it was framed was such as $43,000,000 to afford but little opportunity for any careful

and accurate investigation of the sources of If this is added to the paper currency, it revenue, and the most suitable measures of makes the whole amount of the circulating me developing them. The old methods of taxation dium $963,290,551. West of the Rocky Moun- in this country, by assessments on real and pertains, on the Pacific slope, gold and silver main- sonal property or capital, were chiefly allowed tained its ascendency, and very little paper to remain undisturbed in the States which had was circulated. Indeed, throughout the whole hithert? applied them for their own support, country, and particularly where merchandise and the plan was adopted to obtain this was distributed at wholesale, many articles branch of the national revenue from the fruits were bought and sold exclusively for gold-no of capital, or of capital and industry comother prices were quoted for them. Instead of bined. One of the greatest defects which was coin, gold bars and bullion were largely used by immediately felt in the system thus put in banks and by importers to pay for foreign operation, was its diffuseness, wherein the exmerchandise. The copper and nickel coinage emption of an article from taxation was the has been depreciated, so that a five-cent token exception rather than the rule. A system so contains about one cent of real va or, in the diffuse necessarily entailed a duplication of words of the chairman of Ways and Means in taxes, which in turn led to an undue enhancethe House of Congress (Mr. Morrill), “ until it ment of prices; a decrease both of production

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