Martinsburg herald. [volume] (Martinsburg, W. Va.) 1881-1920, 1918-09-07
tBy the Associated Press.)
(WAR TAX ARTICLE NO. 81

(WAR TAX ARTICLE NO. 81
WASHINGTON, Sept. 1.-The Civil
| War cost the federal government 49,.
O27,791,00O, exclusive of pensions and
interest on the public debt beyond the
actual war period. This amount seems
small indeed, when compared with
the $4,000 900 day the United
States now is paying as its share OF
| the present conflict. Conditions fifty
years ago were such that the people
of that day felt the burden they were
forced to carry, to greater degree,
perhaps. than do the people of the
present.
There was demand by the people
during the Civil War period for EN-.
Urgency taxation and, while vast
amount of war revenue was raised
through that means, Secretary Chase,
head of the Treasury Department,
pinned his greatest faith to loans.
The loan system inaugurated by
Chase was elaborate and complicated
Loanfbilowed loan in 11apId success
sion and they were floated at vary
ing rates of interest and over widely
separated periods of time. In discuss
ing this phase OF the nations finan-
cial experience, authoritative writers
have found it convenient to group
these loans under four headings: (a)
Long Term Loans. OBJ Short Term
Loans. Co Noninterest Loans. (d)
Temporary Indebtedness.
1t is impossible in the brief space
at hand to analyze these completely,
but one may gain a general idea of
the system by hurried survey of
those issues which attracted the wild
est attention and made the greatest
appeal to the subscribers.
With the exception OF an issue of
$50,00OJ000 of twenty year bonds bear
ing six per cent interest, the loan OPP
erations of 1861 were of a temporary
nature, but in February, 1862, an is
sue of $500, 100000 was authorized, at
six per cent redeemable after five
years and actually payable in twenty
years. Ut was provided however, that
they were not to be sod below the
market value, which Secretary Chase
interpreted to mean at par, and since
majority of investors were buying
bonds merely for the purpose of sell
ing them again at profit, only $685.,
100000 of the issue was sold.
During 1S62-1S63, after the federal
army had suffered reverses and
money was badly needed, the system
of temporary loans was revived and
certificates of deposit, bearing five
per cent interest, were issued. They
proved popular and within month
the 25,G00,G00 authorized as limit
had been doubled. Six months later
it was increased to 500, 100000 and
by the next year-June, 1S64-a limit
OF $150,000,00O had been authorized
The premium on precious metals caus-
Edcoins to go almost out OF circulac
lion and in their place Congress au-
thoriZed the use of stamps. That me-
dunn, inconvenient at best was placed
March 3, 1868, by small notes called
fractional currency or 'fshin plasters"
and the 5O,00O,OO0 worth of it au-
thorized, proved effective in replen-
ishing the treasury.
When Congress met in December,
1862, it was confronted by deficit of
$276,000. 000 To meet it, a series of
treasury notes totalling S9a0.000,000
was authorized but of the amount only
S75 100000 was sold. In the mean
time, however, the restriction against
selling below par the $500,000,0 900 bond
issue, authorized eleven months before
was repealed, and Jay Cooke, a New
York banker was engaged to dispose
Of the bonds on commission basis.
Cooke established agencies through |
cut the country and $400,000,000 of
he bonds were sol doff within year.
The plan of selling bonds through
brokers and outside the immediate
control of the government, aroused
much antagonism, and it was aIban-
Toned by Chase in negotiating the next
Dan
Temporary loans were resorted to
Turing the fiscal year of 1S6S-64, when
me year notes bearing five per cent
Interest lwere ISSUED, anti sold
through the banks of New York, Phil
sdelphia and Boston. They brought a
-eturn of $44,52O,O0O. An issue of two
rear notes was disposed of at the
ime and through their sale Sl66, 49,
100 was realized. The notes however
rara mt antirplv daGira n1p since their