The weekly pioneer and Democrat. [volume] (Saint Paul, Minn. Territory) 1855-1865, 1861-12-20

tutions of the three chief commercial cities
OF the seabOard to advance the amounts
needed for disbursement in the form of loans
for three years 7.30 bonds, to be reimbursed
as far as practicable, from the proceeds of
similar bonds, subscribed for by the people
through the agencies of the national loan !;
using, meanwhile, himself, to limited ex-
tent, in aid Of these advances, the power to
issue notes of smaller denominations than
fifty dollars, payable on demand.
Upon this plan he hoped that the capital
of the banking institutions and the capital
Of the people might be so combined with
the credit of the government in proper
provision for necessary expenditures as to
give efficiency to administrative action,
whether civil or military, and competent
support to public credit The result thus
far has fulfilled that hope.
Representatives from the banking insti-
tutions Of the three cities, responding to his
invitation, met him for consultation in New
York, and, after full conference, agreed to
unite as associates in moneyed support to
the government and to subscribe at once
loan Of fifty millions OF dollars, of which
five millions were to be paid Immediately
| to the Assistant TreaSurers, in coin, and the
residue, also in coin, as needed for diSburse-
ment. The Secretary, on his part agreed
to issue three years 40 bonds or Treasury
! notes, bearing even date with the subscrip~
ton Of equal amounts; TO cause books OF sub
scription TO the national loan to be immedi.
ately Opened;t0 reimburse the advances of the
banks as far as practicable from this ma
tional subscription and to deliver to them
7.30 bonds or Treasury notes for the amount
not thus reimbursed. 1t was further under.
stood that the Secretary of the Treasury
should issue q limited amount Of United
States notes, payable on demand, in aid of
the operations Of the Treasury, and that the
associated institutions, when the first ad-
vance of fifty millions should be expended,
would, if practicable, make another, and
when that should be exhausted, still another
advance to the government, OF the same
amount and on similar terms.
The objects of this arrangement were,
Qst to place at the command OF the GOV
eminent the large sums Immediately needed
tor the payment OF maturing Treasury notes,
and for other disbursements, ordinary and
extraordinary (2d) to secure to the people
equal opportunity with the banks for parti-
cipation in the loan (3d) to avoid compe-
tition between the government and the asso-
ciated institutions in the disposal of bonds !;
! (4th) to facilitate and secure further ad-
vances to the government by the associates,
if required; and (5th) to insure, if possible,
the maintenance of payments in specie, or
its actual equivalents and representatives.
All these objects were, happily, accom-
plished Fifty millions of dollars were i'm.
mediately advanced by the banks The
Secretary caused books of subscription to
be opened throughout the country, and the
people subscribed freely to the loan. The
amounts thus subscribed were reimbursed to
the banks and the sum reimbursed, though
then covering but little more than half the
amount. enabled those institutions, when
second loan v as required, to make second
advance OF $50, 100000.
THE TWO LOANS NEGOTIATED AT HOME AND
AT PAR.
Thus two loans OF 5000 900 each have
been negotiated for three years 80 bonds
at par. The first Of these loans was negO-
tiated, and the first issue OF bonds bears date
on the 18th of August the second on the
first of October, 1861.
THE TERMS OF THE THIRD LOAN. ALSO NEGo-
TIATED AT HOME.
On the l6th of November a third loan
was negotiated with the associated institu-
tons under the authority given to the Sec
rotary TO borrow sum not exceeding one
hundred millions, il Europe or the United
States, at rate OF interest not exceeding
seven per cent. As no reasonable prospect
appeared OF obtaining terms equally advau
tagoOus by advertisement, and as It was
manitestly ior the interest Oh the government
to negotiate at home rather than incur the
expense and hazard OF negotiation abroad,
the Secretary, under the authority OF the
seventh section OF the act of August 5. 1861,
arranged this third loan also with the asso-
ciates, by agreeing to issue to them fifty
millions of dollars in six per cent. bonds, at
a rate equivalent to par for the bonds bear
ing seven per cent. interest, authorized by
the act OF July Il. This negotiation,
though less advantageous to the govern
ment, considered under the light of simple
money transaction, than the two prior loans,
was in some respects at least, more so. 1t
was coupled with no arrangement for reim-
bursement, and entailed no immediate ex-
pense on the Treasury, beyond that of pres
pairing and issuing the bonds. 1t was
coupled, also, with an understanding, in the
form of an option to the associates, that on
Or after the LIST of January fourth advance
of fifty millions should be made on the same
terms with the first and second, if practical
bic and required by the Secretary.
AMOUNTS REALIZED FROM LOANS.
In addition to the loans thus made, the
Secretary has issued United States notes,
payable On demand, in denominations of five,
ten and twenty dollars, of which there were
in circulation, according to the last returns,
on the both day of November, 1861, $2l,-
l65 ,22O; and there remained in the treasu-