The morning call., 1894-02-04

The fact that these certificates bore inter-
est induced many persons TO prefer them
to paper money. Contracts were draWn
requiring payment in loan certlflcases, ana
they soon became the prefera ble medium
If exchange, depreciatlng the value Of the
paper currency. Finally the Government
could no longer pay interest on the loan
certificates and the holders of them were
in dismay. Many persons during the great
popularity of the certificates had sold
their worldly possessions to invest In GER
tificates and now found them on par With
the deprecated currency.
In 1890 the first issue of bonds to any
considerable extent was made. 1t was
found then that the Indebtedness incurred
by the war of the Revolution was a matter
of grave Importance. The Indebtedness
was in many forms, and on numerous ac-
counts. Alexander Hamilton came to the
front with plan, which, after long and
heated debate in Congress, was adopted.
1t was decided to fund the revolutionary
debt by means of a bond issue. The bonds
ran in three series, the bulk of them
drawing per cent interest. the total
az ounting TO about S64,000,000 The
scheme proved to be success and Hamil-
ton lived 10 triumph over those who had
opposed it.
LII 1912 the Government was again COM
peiied TO borrow money. This time a loan
OF 81. 600, 600 was negotiated, stock being
issued for the amount borrowed, and the
tevenues OF the Government pledged to its
payment. Other loans followed at inter-
walls between this time aud the beginning
of the civil war.
1t was in 1861 that the Government made
the largest loan in its history up to that
time. In consideration of the d.fficulties
surrounding the situation and the critical
conditions of the times, that negotiation
may be cIassed as one of the signal feats
in the financial history of the United
States. Uncle Sam borrowed 100000. COO
on this deal.
Atthat time the credit of the Government
had become so impaired that large loan
could not be obtained in any ordinary way.
nor even a small temporary loan, except
for a very short period and at a nigh rate
of interest Before Congress adjourned in
1861 it conferred upon the Secretary of the
Treasury greater power 10 contract pub
lie debt than had ever beeD given to any
OF his predecessors. Early in August, i'm
mediately alter adjournment, armed with
the authority thus conferred upon him,
Secretary Chase hurried to New York to
make loan.
meeting of the New York bankers was
called on the evening of August 9. at the
residence of John j. Cisco, the Assistant
United States Treasurer. 1t was memoir
able occasion, and the results of the con-
ference then held were all important to
the nation. The financial situation was
discussed and various plans suggested for
reviewing the country. Finally, Mr.. COe,
president of the American Exchange Bank,
proposed an association of the banks
throughout the country for the purpose of
lending to the Government the capital of
the country. This could be accomp pished
very easily by the banks, and the money
distributed In small sums to the people.
This plan met with instant favor.
Another meeting was held the following
day, and a committee appointed. August
Is the committee reported that thirty-nine
New York banks would agree to the plan.
Boston and Philadelphia banks also con-
CURED.
The plan adopted was that there should
be an immediate issue of $50, 600, coo of
treasury notes TO run three years at Z 80
per cent The banks were TO take this and
be allowed 30 take S50000,000 more the
following October. The Government was
to appeal to the people to subscribe to the
notes and the banks to take them In pro-
portion TO their capital.
The plan worked admirably and three
Issues OF the notes were made. They were
disposed of TO the people through the
banks aud through agents, 14S of whom
were appointed to negotiate the notes
and receive commission therefor. From
time 10 time since the war the Government
has made loans 10 recnperate its cash bal
ance or to fund special loans. The inter-
est-bearing debt of the Government on
January 1, 1894, exclusive of the Pacific
railroad debt, was S5S5. 039,3 315.
FRANK q. CARPENTER.