St. Paul daily globe., 1894-02-04

The history of the United States bon d
is Interesting.
The first loans ever negotiated by this
government were with foreign countries.
France. Spain, Belgium and Holland
furnishing the money in several small
sums.
The first issue of anything like a bond
for home investment occurred in IT'S.
when the government negotiated what
were then called loan office certificates.
This scheme was modelled upon a plan
proposed in the Virginia legislature ten
years earlier, when the junior branch
of the legislative body of that state
proposed to borrow e24O,o0O sterling
al per cent interest. The fund
for payment of interest and principal
was to have been raised by an impost
duty on tobacco. That scneme was
abandoned by Virginia, but the general
government remOdeled it in IT'S. Con-
gress believed tnat If a popular loan
were proposed The people would sub
scribe literally. and the government
would raise all the funds needed for
the eXlgencleS OF that occasion. The
loan Office certificates which were
issued i'll accordance with this plan
were of two kinds, one bearing interest
IN specie, the other in paper mon
ey. Unfortunately these certificates
were immediately thrown into cir
culatloh. which was contrary to the ex-
DeciatlonS OF the promoters in congress.
The fact that these certificates bore in
tereSt induced many persons to prefer
them to paper money Contracts were
drawn requiring payment in loan certifi.
Gates, and they soon became the prefer
able medium of exchange, depreciating
the value of the paper currency. Final
ly 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 certificates, and
now found them on par with the de-
preciated currency.
In 1870 the first issue of bonds to anv
considerable extent was made. 1t was
found then that the Indebtedness in
Cured by the War of the Revolution
was matter of grave Importance. The
Indebtedness was in many forms. and
on numerous accounts. Alexander
Hamilton came to the front with a plan
which, after long and heated debate in
congress. was adopted. 1t was decided
TO fund the Revolutionary debt by means
OF bond issue. The bonds ran in three
series, the bulk of them drawing per
cent interest, the total Issue amounting
to about S64, 100000. The scheme proved
to be success. and Hamilton lived to
triumph over those who had opposed it.
In 1912 the government was again
compelled to borrow money. This time
loan of S11,000,000 was negotiated.
stock being issued for The amount bor-
rowed, and the revenues of the govern
ment pledged for its payment. Other
loans followed at intervals between this
time and 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
difficulties surrounding the situation
and the critical conditions Of the times,
that negotiation may be classed as one
of the signal teats in the financial his
tory of the United States. Uncle Sam
borrowed $3.50, 900, 900 Oh this deal.
At that time the credit of the govern
ment had become so impaired that a
large loan could not be obtained in any
ordinary way, nor even small tempo