The National tribune., 1903-12-03
rHE FINANc,AL OPERATIONS OF 1888.

|
| icent Army of the Potomac, on which
such vast sums of money had been Law
ished, had recoiled when in sight of the
spires of Richmond, had been forced back
! into the defenses of Washington, had
| fought series of bloody but indecisive
battles in that neighborhood eliminating
in Antietam, and then gone on to the
| frightfui repulse and slaughter on the
slopes of Marye's Hights at Fredericks-
burg. This last useless sacrifice of men
would have taken the heart out of any
less determined people than the Ameri-
cans.
The Army of the Tennessee after its
brilliant success at Fort Donelson had
gone on to the murderOus drawn-battle of
Shiloh; then it let the enemy get away
from it at Corinth. and met dishearten-
ing repulse in its first campaign against
Nicksburg.
The Army of the Cumberland, the sec
ond largest army of the Union, had been
raced back TO the Ohio River, fought the
inconclusive battle of Perryville, and in
December followed this up by stub
born, sanguinary contest on the banks of
Stone River, where the sole advantage
gained was the possession of the field at
the close of the four days struggle.
The war had already piled up the Ma
tional debt to the startling amount of
$7s3, so, GA, and the Secretary of the
Treasury announced that this was only
the beginning. for he needed the still
more incredible sum of $500, 800, 701.22
for the ensuing year. This was far more
than all the gold and silver and State
bank-notes in the country at that time.
any country in tine world, even the rich
est Nation on the earth, had ever con-
templated spending upon military opera
tons. The moneyed men naturally look
ed askance, and tightened their purse
strings against the appeal of the Secre-
tary. The Secretary of the Treasury
wanted to issue more paper money, but
this seemed inadvisable, since that al
ready issued was depreciating with such
rapidity.
On New Years Day, 1868, the value of
the greenback was only 6S.9 cents, and
within a month it still further depre-
ciated to 62.3 cents, or less than two
thirds of its face value. A man who had
500 in gold in January. wanted S145.01
for it. In February he increased his de-
mand to $1G0.O5.
Congress did everything it could to help
the Treasury out. 1t authorized the Sec
rotary to borrow $400,OO0,OOO for one and
two years at per cent, and reiterated
its pledge that both principal and inter
est of the bonds should be paid in gold.
The bonds were intended to float the pa
per money by being sold for them, and
thus boosting their value. As the paper
money was in February worth only 623
cents on the dollar, in gold, and the inter-
est on the bonds would be payable in
gold, this would make the interest on the
bonds amount to about 8 per cent.
Only $211, 100000 of the $400,0O0,OO0
authorized could be obtained, even at
these favorable rates, and on this sum
the Government paid on the loan, for an
average, say, of 1s months, Ss,526, 145.S6
in interest. The bonds, which were sold
virtually for G2.3 cents, eventually went
to par, and therefore the fortunate hold
ers netted in addition to their interest,
S79, ,547 900 by fhe enhancement of the
value of their bonds. Consequently, for
their loan of $211. 100000 face value, but
of & gold valuation of $133, $50, 900, they
received as follows:
Principal repaid ..... .S211 ,000, 900 90
Increase in value ........ 1874, 10000
Interest .......... ..... S,026, 1895
Total. .$299, ,073, 1886
Therefore, they almost doubled their
money in less than two years, and turned
over their dollars in sufficiently lively
manner to satisfy any reasonable man.
1t is worth while mentioning in this
connection that so closely did they cling
to these bonds, that in the final settle
ment there were only $40 OF the one-year
notes missing, and 500 of the two-year
notes, or $140 in all. The bonds had mar
velously escaped the usual destruction by
fire, water, thieves, and other accidents
to which securities are liable.
March 3. Congress authorized another
loan for II years at per cent. interast,
hoping to induce the bond-holders into re
laxing the stringency of the money mar
ket. 1t was in vain, for though $500, ,0OO,-
600 of these bonds were authorized, but
$75, 100000 could be obtained. As these
were sold like the others for greenbacks
which were worth less than two-thirds
of their face value in gold, the 1900
600 borrowed represented less than $50
100000 actually loaned, making the inter-
est in gold about o per cent. Upon the
S75, 100000 of less than $50,OOO,OO gold
value borrowed at this time, the Govern
ment paid $76,S2O, ,494.O2 interest," beside
redeeming the bonds mt their gold value,
thereby giving the lucky lenders, in all,
over $102, 100000 in addition to their
principal for their loan of less than $780,
100000.
In addition. Congress in its stress for
money went to the length Of authorizing
an issue of $4OOOOO,000 of compound in.
terest notes which paid $40 per cent. in
greenbacks, the interest to be compound
ed every six months. OF these, $2G6, $685.
440 were issued to run three years, upon
which the immense sum of $34,411 ,822. 81
interest was paid. On the back of each
| nnta ,yac printa1 Iiffta 10 bIa Sn.,r;,,, ki, d,