The National tribune., 1903-11-19
rHE LOANS OF iss,.

4
were so enormous, and the needs came
upon the Treasury so Unexpectedly and
with such imperativeness, that the Treas
ury was compelled to resort to all sorts of
shifts and devices, and take money at any
time upon any terms upon which it could
get it.
In last weeks issue we spoke of the
difficulties the Treasury encountered in
getting money enough to carry it through
the troublous months between the seces-
sion of, South Carolina and the inaugura-
ton Of Mr.. Lincoln. Even after the in
auguration, the moneyed men Of the coun-
try were gravely doubtful of the ability
Of the Government to maintain itself, and
not at all disposed to venture any money
upon such an uncertain matter. The ex-
trao-dinary response to Lincoln's call for
$4,000 men to assert the National autho-
rity and maintain the Union, which was
answered by over 10000 eager young pa
triots, showed the world that the Govern
ment would not lack men to fight for it
the frs. terrible doubt-and everybody
took more heart.
Congress met in extra session July 4,
1861, at which time II States were In
actual revolt with hundreds of thousands
of men in camp to support the rebellion.
On the other hand, the Government had
91,S16 men in camp, who had volunteered
for three months, and they had won some
very cheering little victories In West Vir-
ginia and elsewhere. The call of May 3,
1851, for 100000 troops was being re-
sponded to in similar way, and il looked
as if the whole number would soon be in
camp.
Congress authorized loan Of $3.50, 0,000,-
600 at per cent, payable in gold, of
course, but the Secretary of the Treasury
had to sell the first $50Oo0,O00 at 1857
per cent. discount, making the interest
something over per cent. The rarchas-
ers received the benefit Of the discount
from the face value, amounting to S5,338.-
76S.09. In all, $1S9, ,321 $50 were issued of
this loan. After the war, when the Gov
ernment's finances were put in satisfactory
shape, the Treasury tried to replace this
loan with another bearing a lower rate of
ers to surrender their profitable invest
ment, it had to pay them $1,S64, ,961.1 Is
premium. It paid in interest to them in
all $2O0. .395. .S53.74. Therefore the fortu-
nate holders of this loan Of $1S9, ,321 $50
received in addition to the repayment Of
their principal as follows:
Interest .................$2 $500, ,395, ,S53. "a
Discount ................ 0,3SS, t6SU9
Premium ............... 1864, ,961. 10
Total .................$2 .$2O7, 500, ,5S2.9s
1t will be perceived that this was an In
vestment much luckier than was the rule
in most of the business transactions of
that period.
The Government was in such straits for
money-for ready cash-that it could not
wait for the slowly-coming in subscriptions
to these bonds, but had to negotiate an
other loan of $5O,O00,0O0 for five months
with interest at 7.3 per cent. The banks
of Boston, Phiiadelphia and New York
patriotically took this loan, Aug. 10, 1861,
and were repaid Jan. IA, 1852, receiving
S621 ,290 in interest.
Even this loan of $50,000.000 did not
satisfy the Treasury's urgent needs for
money. and another loan Of $139, 1893. $50
was made fo: three years at 7.3 per cent
interest. On this shert-time loan the lend
ers received $27, ,845, ,25S.07 in interest.
Let 1t be remembered all tho time that
while money-lenders were lending paper
money. constantly depreciating in value.
they were receiving their principal and in
terest in gold.
The Government also issued $60,O00,-
600 in demand notes" which agreed to
pay gold upon presentation. and which
were receivable for duties on imports and
other taxes. These speedily passed out Of
circulation, however, because Of their gold
character. and because they could be used
at the custom houses to pay duties on i'm
ports. They were soon all In the hands
Of the bankers. We were at that time Inn
porting very heavily. and duties were high
and required to bs paid in gold. The ex-
istence Of these notes was an embarrass-
ment to the Government, as they prevent
ed 1t from obtaining the gold which 1t
sorely required to pay the interest and
principal on these loans, and to send
abroad for badly needed warlike supplies.
We have therefore. the following
amounts borrowed BY the Government in
1861:
Treasury notes Zone year, In
terest from 8 to II per cent. SIC, 900, 900
Ten-year loan, February, 1881
discount from IL to Is per
cent? ................... 1s,415,0 900
Sixty-day Treasury notes at
9 per cent. .............. 35,364. .450
Twenty-year loan Of July and
August .................. 1s9,321 $50
cent. .................... $4,000, 600
1905 Of 1851 .............. 139 9999, $50
"Oid demand" notes ........ 60,00O,0O0
Total MISUNDERSTANDING .$5O3, 1OO. $50
On this was paid in addition to the prin-
cipal the following amounts:
One-year Treasury notes
Loan Of February. 1891
interest .........,..... 21,695.0ls.2s
Loan Of February, 1861
discount .............. 2O1s.77s.1o
Treasury notes Of 1861
interest ............... 1901 ,5e4.e1
Loan of July and August
1se1--intereaa :.:...... 2ooas5. .sss.74