The National tribune., 1903-11-26
rHr rnANc,Al orsnAr1oss OF 1ssa.

fHk FINANCIAL OPERATIONS OF 1859.
We have some more figures to be placet
| for the purpose Of comparison alongsid,
the disbursement of S., 200, 900 900 for pen
| sions.
The outlook for the Government at thu
beginning of 1862 was quite encouraging
to the lovers of the Union. For six months
Gen. Mcclellan had been assembling, drill
ing, and disciplining around Washington
one of the mightiest armies the world had
| ever seen, and great hopes were entertain
ed of what it would do when it once be.
gan operations against the enemy. Smaller
but still very powerful armies were as
sembling in front of Louisville, Mt Cairo,
and in Missouri, all ready to be lanched
forward against the Confederacy, which
it was hoped would go down before their
terrific blows.
During the previous Summer and Fall
the Government had only maintained with
the greatest difficulty its paper promises
to pay at par, and the year opened with
them rated in the market at 97.6 cents.
1t had hoped to be able to get along with
deepest need for money had passed. The
Army of the Potomac still lay in camp. in
spite of the murmuring of those who
wanted to press 'On to Richmond" but
Gen. Thomas, of the Army of the Ohio. won
brilliant little victory at Mill Spring. Jan.
10, 1862, which greatly heartened the low
ers of the Union. Feb. 6, the gunboats
knocked Fort Henry to pieces, and Feb.
g. the navy, under Commodore Goldsboro,
and the army. under Gen. Burnside, won
cheering successes at Roanoke Island.
These were followed, Feb. IA, 10 and 16,
by Grants crushing victory at Fort
DOnelson. Notwithstanding these signal
successes. the money-lenders lacked conf
dence, and the quotations of the United
States securities sank in February to 96.6
cents, with gold selling from 3.5 to 81
cents premium. The Treasury needed
mOney-much more money-and Congress
gave it power to negotiate short loans to
tide it over until the victories in the field
would ease up the money market, and
unlock the vaults Of the bankers. Feb.
% and March II Congress authorized q
short-time loan of $15O,OOO.O0G, on which
the Treasury issued in all $716,099, ,247 16,
or more than four times the authorization.
The interest was not to exceed 6 per cent.
On these loans the Government paid in
all .7S4,096.S4 interest.
Still the Government had not money
with which to meet its obligations, and re-
sorted to the desperate expedient of is
suing paper money, of which $3.50, 600, 900
was authorized. Congress corrected the
error made in previous issues of notes, by
making them not receivable for duties on
imports and for interest on the public debt,
but made them legal tender for all other
debts, public and private. This legal ten
der quality was bitterly opposed by the
Democrats, and regarded as doubtful by
some friends of the Union. 1t afterward
required the most severe strain upon the
Supreme Court to get a decision recogniz-
ing its constitutionality
1t will be seen that no matter what the
money-lenders lent to the Government,
their interest and principal were to be paid
in gold.5. The law bOlstered up the issue
of greenbacks by making them convertible
into United States interest-bearing bonds,
of which the moneyed men took full ad-
vantage in the later years of the war.
Even more money was needed than was
provided by all these extraordinary meas
ures. and Congress authorized another loan
of S500,00O,00O, at per cent. payable in
five or 20 years-hence the name "5-2Os y
OF this $514, III 600 in bonds were issued
and sold for greenbacks, which were con-
stantly depreciating in value under the
repulses which the United States arms suf-
fered during the operations of that year.
Just how much gold value was realized
from this issue Of $514.771, 900 of this
class Of bonds can never be told, because
the bonds were sold at various periods dur
ing the war for greenbacks which sank
in its course to a gold valuation of 3S.7
cents. In addition to the bonds becoming
at least of gold vaine. and Of making the
holders possibly hundreds of millions Of
dollars in every rise from prices ranging
all the way down to 3S.7 cents up to 20
increments as shown by the Treasury
books:
Premium ................ S67S6,017 %
COMMISSION ............. Al. 9.6S
Interest ................. 29S, ,9S2, ,775. .S2
Total ACKNOWLEDGEMENTS .S307, ,210, 162 20
If we add to this the immense profit
from the enhancement of the gold value of
the loan from 3S.7 cents upward, we shall
fnd that the lucky lenders of greenbacks
received, in principal and interest, from
two TO three times as much money as they
lent. The highest gold value of the green
backs they lent the Government in this
-oan was 79.5 cents, and the lowest value
3S.7 cents. If We add these together and
divide by two we shall get an average of
39.1 cents. Let us say, for convenience,