The weekly pioneer and Democrat. [volume] (Saint Paul, Minn. Territory) 1855-1865, 1862-06-27
Finances of the Government,
LETTER OF SECRETARY CHASE TO
- ge THADDEUS STEVENS. Isasa4;

4. --s .
The letter Of Secretary Chase to the
chairman of the Ways and Means Commit
tee of the House of Representatives thus
discusses the subject of the government
finances: --s gus ~ s''.i.
~ TREASURY DEPARTMENT, June Z, 1862 ,
SIR /: The act of July II, 1861, author.
lied the issue of $50OO0,OOO in United
States notes, payable on demand, and re-
ceivable for customs. This authority was
enlarged under the act OF February IL,
1862, by the addition Of SIC, 1000, 0O0-mak-
ing S60,000,000 in all.
The acts of February 25th and March
18th, 1862, authorized temporary deposits
in the Treasury at rates OF interest not ex-
ceeding five per cent, nor for greater ag.
gregate sum than $50,0O0,0OO. The act of
February 25th, 1862, authorized the issue
of $l50,000,O00 in United States notes,
provided, however, that the Demand notes
issued under former acts should be retired
and cancelled as rapidly as practicable, and
that the aggregate of such notes and of
the United States notes to be issued under
this act should atno time exceed $l50,0
600. All the notes to be issued were made
legal tender, but none, except the Demand
notes were made receivable for customs.
Under these laws $6O,O00O0O in Demand
notes, receivable for customs, have been is,
sued, and $90,000,O00 in notes not so re-
ceivable. The aggregate now outstanding
is, therefore, Sl50,O0O,000, being the
whole amount authorized by law.
Of this aggregate about $50, 100000 in
Demand notes are held by banks and CAPT.
talists, and not used as circulation, being
held at premium in consequence of their
receivability for customs Of from three.
quarters to one quarter per cent, and about
$3,500,00O are held in the Treasury for
circulation.
The whole issue of $6O,OOO,O0O in De-
mand notes may thus be regarded as prac.
tically withdrawn from circulation. This
withdrawal leaves only the issue of $780,
100000 of United States notes not receiv-
able for customs, increased gradually by the
substitution of these notes for the demand
notes cancelled, from which conversion into
bonds redeemable after five years, and pay.
able in twenty years, called for convenience,
tve-twenties can be expected to be made.
The limit of temporary deposits is now
reached, and nothing further can be ex.
pected from that source, for so long as the
limit shall be maintained, current receipts
OF such deposits can only be equal to the
payments. 1t is, therefore, upon the con-
version of United States notes into five,
twenties, now practically limited to the
ninety million of Legal tender notes, and
upon receipts from customs, that the Treas
ury must depend, under existing legisla-.
tlon, for means to meet current expendis
lures. s
No safe reliance can be placed on con.
versions, so far as experience has afforded
any grounds of estimate for more than
$l50,OOO daily, and the daily average reve-
nue. from customs during the past month
has been about 100000. The aggregate
daily receipts from both these sources,
therefore, cannot be estimated at more than
$38O,O00, may very possibly fall short of
that sum, while the average daily expendi-
lures cannot be estimated at less than one
million, and will probably, unless very con.
siderable retrenchments are made, exceed
that sum. -
l therefore propose the removal of the re-
str:ction upon temporary deposits. The
plan of receiving them has worked well, and
is likely to continue TO work we'll in future.
The rate of interest, limited to five per cent.
by law, has been reduced to four by my di.
rection, and it is not proposed to increase
it unless some exigency shall make the in.
crease necessary.
The amount of deposits at four per cent.
now exceeds nine millions, and will become
steadily larger if the restriction be removed.
Payments will, of course, be frequently re.
quired, but the pressure must be very great
which will reduce the receipts below them,
while, in ordinary times, the latter will
constantly exceed the former.
1t may indeed become practicable to re-
duce the rate OF interest even below four per
cent. with advantage. Whatever the rate
allowed, the average exceeds of deposits
above reimbursements will constitute loan
to the government at that rate. In order
to retain the average excess at its maximum,
it may be we'll to provide by law, that of
the United States notes hereafter authorized
to be issued there shall be always reserved
in the Treasury, or from issue, an amount
not less than one~third the amount depos-
tied.
Such provision would make the Trea.
sary the best of savings banks, and by its
guaranty of prompt payment under all cir-
cumstances insure the highest confidence
and argument to It's maximum the flow of
deposits. l estimate the amount of loan
likely to be made to the government at four
per cent. or less in this form at not less than
100000, 900 in addition to the $4,000, 900
already deposited. 81
propose also that authority be given to
the Secretary of the Treasury to issue
$l50,O00,eOO in United States notes, in ad-
dition to the issue already authorized, and
that these be made legal tender for debts,
except interest on loans, and receivable in
payment of all loans to the United States
for all government dues except duties on
imports and interest.
If this authority be given the proposed
reserve OF an amount, say $34OOO,OOO, not
less than one.third the temporary deposits,
and the replacement of that portion of the
100000, 900 of demand notes, say $56, $780,
600, now practically withdrawn from Cir
culation and hold for navmpnt nf cuafnmo