, 1862-06-17
Important Financial Statement.
FINANCES or The GOVERNMENT,
Letter Of Secretary Chase to Ihaddeus Steyens.

FINANCES uf The GOVERNMENT
Letter Of Secretary Chase to 1haddeus Stevens.
The letter Of Secretary Chase to the chair
nan of the Ways and Means Committee Of
the House OF Representatives, thus discusses
the subject Of the government finances:
"TREAsuR1 DEPARTMENT, june =, 1862.
"sR: The act Of July II, 1861, authorized
the issue Of $50, ,000, GOO ii United States notes
payable On demand, and receivable for Gus.
toms. This authority WIS enlarged under the
aet Ct Of February Il, 1852, by the addition Of
The nets Of February Is and March II.
lsos, authorized temporary deposits In the
treasury ct rates Of interest not exceeding fiTe
Per cent, nor for greater aggregate sum
than $50, ,0o0, 600. The act OF February Is.
156s, authorized the issue Of $l50, ,000, ,000 il
the demand notes issued under former acfs
should be retired and cancelled az rapidly as
practicable, and that the aggregate of such
notes and Of the United States notes to be
issued under this act should at no time e1-
cesd $150, ,o00, ,000. AL the notes to be issued
we're made legal tender, but none, except
the demand notes, were made receivable for
customs.
"Under these laws $4,000, 600 in demand
notes, receivable for customs, have been is
44eN, 14o PoosoVo.oVu Ill 4oteS uoL 30 racelVa-
pc. Ihs @ aggregate now outstanding il,
therefore, sl50, 0,V9, GOO, being the whole
amount authorized BY law
"Qf this aggregate about Sc, SOC, 600 in de-
mand notes are held by banks and capitalists,
and rot used as circulation, being held at i
for customs Of from three-quarters to enc
quarter per cent, and about $3, ,500, 900 are held
in the treasury for circulation.
1.-The whole issue Of SEQ, ,000,000 In demand
notes ae may thus be regarded as practically with,
leaves only the issue Of s90, ,oo0, 900 of United
States notes not receivable for customs. in
creased gradually by tho substitution Of these
notes for the demand notes cancelled, from
which conversion into bonds redeemable af-
ter five years, and payable in twenty years,
called for conTenience, fye-twenties eau be
expected to be made.
The limit Of temporary deposits is now
reached, and nothing further can be expected
from that source, for so long as the limit
shall be maintained, current receipts OF
ments. It is, therefore, upon the conversion
OF United States notes into fi7e-tWentieths,
now practically limited to the ninety millions
OF legal tender notes, and upon receipts from
customs, that the treasury must depend, IN
der existing legislation, for means to meet
current expenditures.
"No safe reliance can be placed On CONVEX
6lons, go tar aR experience has afforded any
grounds Of estimate for more than $15O,060
daily, and the daily average revenue from Gus
tens tent ~ during the past month has been about
$3.50, 600. The aggregate daily receipts from
both these SOURCES, therefore, cannot be esti-
mated at more than s3S0, 900, may very possi-
bly, fall short Of that sum, while average daily
expenditures cannot be estimated at less than
Sl,O0o,0 600, and will probably, unless very COZ
siderable 81 retrenehmcnts are made, exceed
~ therefore propose the removal Of the
restriction upon Temporary deposits. The
plan Of receiving them has worked well, and
is likely to work we'll in future. The rate OF
interest, limited to five per cent By Law, has
been reduced to four BY my direction, and It
is not proposed to increase it un1es. some ex-
igency shall make the increase necessary.
"Ihe 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.
Rhlle, in ordinary times, the latter will con-
stant]y 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 as its maximum, it may be
veil to provide BY law, that Of the United
there shall be always reserved in the Treasury,
or from Issue, an amount not less than one
third the amount deposited.
"Such provision would make the Treasury
the best Of savings banks, and by its guaranty
Of prompt payment under all circumstances
insure the highest confidence and augment to
its maximum the flow Of deposits. 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 $50, ,ooo, 900 IN addition
to the $50, ,000,C COO already deposited.
II propose also that authority be given to
the Secretary of the Treasury to issue $780,
0o0, ,oG0 in United statRs notes, in addition to
the issue already ~ 3rized, and that these
be made legal tN f for debts, except inte.
rest 3e on loans 9, Fiyable in payment Of all
ment dues e1ctpt duties On imports and
interest.
"1f this authority be given the proposed
reserve OF an amount, say $34, ,000, 900, notless
than one-third the temporary deposits, and
the replacement Of that portion Of the
sec, ,oo0, 900 Of demand notes, say s56, 50o, 900,
now practically Withdrawn from circulation
and held for payment Of customs, will require
for the present ut least say 500 SOC, coo Of the
proposed additional issue, leaving as an actual
ad9eR o19t ta t9s Of the GOV
This amount, however, gradually increased
ae%dhRR I'll Re ha the% i S % dRe RRec Ubsa d1fa s M
notes Will probably suffice for al demands
which cannot be met from conversions and
from customs.
*If Congress shall see fit to authorize the
additional emissions proposed, 1t seems highly
expsdient that such part as the convenience
shall require be issued in denominations less
than IS.
~. ! am aware Of the general; objections to
aa me issue OF notes under IS, and concede their
eogency. lnaeeo, under ordinary circum-
st1a:nces, sney are unansWeraole, but IN the e1-
lst,ng e.fenmstanees m a OF the country, they lose
1a2si m9st not AZ tnen lorce. Inc country is IN
tse' sotyea ~ tne expenulInres of contest for
that tha fas,enc, hs1 a4h II Is n1gny desirable
tnerah, sh a u lae people Dc mate as
lote149ie 4 qftS as poss1ole-
no,in!; ene Iestracnon III On me issue OF small de-
noia.nalions 1nt!1s 0e lemoVea, me wants OF the
Goa nusay n1 ~ upsoro enerla1lon OF -, wy
49, w pernps - mGT en0 mn me interest on this
~ tha ta4s sos S1'''o'oVVA seal' WILL Dc saved
~ Ipst4y D. ~ spayele.
.,,,tayrnia;a yas ~ paenc e!ea1tors, and especl.
~, - ~ otiae noM rsq9lre large amounts OF
91.1 aa+ - sa.sty iiellon aeanas iess than 80