News and citizen. [volume] (Morrisville, Vt. ;) 1881-current, 1882-02-16
THE NATIONS DEBTS AND CREDIT.
An Interesting History OF the FL
nances of the United States.

esting of the special reports of the GEN.
sus will be that on ''Public debts-Na-
tional, State and local." This volume
will contain history Of United States
loans from the beginning, prepared by
Captain R. A. Bayley, of the Treasury
Department.
The total Indebtedness of the United
States when the Constitution was
adopted, including interest to Deem
Der 81, 1870, was $50. 7ss, 722. O3, in ad-
dition to which the several States owed
about $25, 100000. After describing
the provisions made for the payment of
this Indebtedness, Captain Bayley says
that when Hamilton assumed the Office
of Secretary of the Treasury he found
himself entirely without funds to meet
the ordinary expenses of the Govern
ment. except by borrowing. He was
forced to make arrangements with the
Bank of New York and the Bank of
North America for temporary loans, and
it was from the moneys received from
these banks he paid the first installment
of salary due President Washington,
Senators, Representatives and officers
of Congress. During the first session
under the Constitution the first Bank
of the United States was authorized by
the act of February, 1871, with capt.
tai stock of $4,000, 900, of which the
Government subscribed $4,000, coo,
which the Government Immediately
borrowed for ten years at per cent.
interest. The bank was so well man
aged that the Government realized
profit on its shares of So, 773, $50.
In 1898 the United States was without
a navy, and nine vessels were bought at
total cost of $711, 700, which was paid
in 6 per cent. Government stock,
authorized to be issued for the purpose.
In 1898 and 1900 the credit of the United
States was still so low that, on loan
of $1,000, 600 negotiated in the former
year, per cent. interest was paid,
and it was thought by Committee of
Congress that this loan was obtained
upon the best terms that could be pro-
cured, and with laudable eye to public
interest. In 1900 an s per cent.
fifteen year loan was negotiated, on
which a premium of about 81 per
cent. was realized. On account of the
second war with great Britain, the
public debt of the United States was
increased $68, 1888, 122, according to a re-
port made by Secretary Dallas to Con-
gress. A 6 per cent fifteen year loan,
authorized in March, 1915, was sold at
95 per cent. to par. In 1916
the Government became stakeholder
in the second Bank of the United States
to the amount Of 81, 900, 900, upon which
it eventually realized profit of nearly
S., 900, 900, aside from the bonus of
81, 500, 900 which the bank paid for its
charter. In 1921 the credit of the
United States had so improved that
5 per cent. loan was issued at a
premium of more than 81 per cent.
In 1886 the Government was practi-
cally out of debt, and there was large
surplus revenue. Congress authorized
the deposit of all the surplus except
SIS, 900, 900, with the several States, and
the sum of $28, 1O1, ga was thus de-
posted, and the very next year Con-
gress authorized the issue of $4,000
600, in Treasury notes bearing 6 per
cent. interest. Before 1916 more than
$47, 900, 900 per cent. Treasury notes
had been issued, and in that year the
war with Mexico ran the country still
deeper in debt. The expenses incurred
on account of the war with Mexico
were much greater than originally esti-
mated, and the failure to provide add
tional revenues sufficient to meet in
creased demands made a new loan nee
as we'll as an additional issue of
notes, which had now become method
of obtaining funds. About $40, 900, 900
of five and six per cent. bonds were is
sued to carry on the war, and the pre-
miums paid on redemption of bonds by
the United States amounted to nearly
S., 900, 600. The financial crash of
1867 was felt by the Treasury, and
Treasury notes to the amount of $751;
IT'S, 900 were issued. In 1858, owing to
lavish appropriations, exceeding the
by $1,000, 900, and to fall
ing off of revenue, it was found neces-
sary to borrow 500, 900, 900 on five per
cent. bonds, on which premium of 81
nov rao1i1aI
From that time on the Government
has been a borrower. In December,
1860, authority was granted for new
issue of Treasury notes, redeemabie in
one year from date, but not to exceed
$40, 100000 at any one time, with in
terest at such rates as might be offered
by the lowest responsible bidders after
advertisement. The whole amount of
notes issued under this act was $1,000
800, of which 81, $40, 600 bore interest at
IL per cent. Additional offers followed.
ranging from Is to Sc per cent, but the
Treasury declined to accept them.
The first loan to meet expenses of
suppressing the Rebellion was negotiated
in 1861. The credit of the Government
at this time was SO low that loan of
$18, 415, 900, having twenty years to run.
with 6 per cent. interest, could be ne
gotiated at discount of S2,019, ZIG. 10,
or at an average rate of $50. 03 per 800.
From this time to June 80, 1865, Gov
eminent securities of various descrip-
tions were issued under authority of law
to the amount of So, 1856, 1886, 575, includ-
ing the several issues of bonds, Treas
ury notes, seyen-thirties, legal tenders,
and fractional currency.
The whole amount issued under the
same authority to June 30, 1880, was
81, 137, SAC, 1856, divided as follows: Six
per cent. bonds, 81, 100, 279, 900 five
per cent. bonds, 1896, 11s. 300; temper
airy loan certificate, 1860, 995, $50; seven
thirty notes, SIG, O99, 247; Treasury
notes and certificates of Indebtedness,
81, 074, 713, 1872; old demand notes. legal
tenders, coin certificates and fractional
currency, So, $50, 444, GOT; total, 81, 1877
GAG, 1886. This increase may be readily
accounted for by the continued issue of
legal tenders, compound interest notes,
fractional currency and coin certifc 'ates
together with large amount of bonds
issued in order to raise m oney necessary
to pay for military supplies and other
forms of Indebtedness growing out of