BIDS FOR TREASURY NOTES UNDER SEC'Y DIX. 77 The whole ten millions were issued, redeemable at the expiration of one year from date, bearing interest as follows: $70,200 at 6 per cent.; $384,500 at rates varying from 6 to 10 per cent.; $1,027,500 at 10 per cent.; $3,688,700 at rates from 10 to 12 per cent.; and $4,840,000 at 12 per cent. Additional offers bearing interest, ranging from 15 to 36 per cent., were declined. The amount of treasury notes outstanding on December 1, 1860, previous to the passage of this act, was $14,599,700, of which $42,600 was payable in 1859, $3,133,400 in 1860, and $11,423,700 in 1861. Of these notes, $8,684,200 bore interest at 6 per cent., and the remainder at lower rates. Secretary Dix, in a letter to the Chairman of the Committee of Ways and Means, dated January 18, 1861, says: "Within the last few days the amount of over-due treasury notes presented for redemption has exceeded the power of the Treasurer to place drafts for payment on the Assistant Treasurer at New York, where the holders desire the remittances to be made; and an accumulation of warrants, to the amount of about $433,000, has accrued on this account in the Treasurer's hands, which he has been unable to pay." He also says: "That notice issued on the 18th ultimo invited proposals for the exchange of five millions of dollars for treasury notes, and offers at 12 per cent. or less were made only to the amount of $1,831,000; offers to exchange $465,000 for notes bearing interest at rates varying from 18 to 36 per cent. were also received. The offers at 12 per cent. and less were accepted; those above that rate were rejected. The remainder of the five millions offered was soon thereafter taken at 12 per cent., and the whole amount * * was pledged to the payment of over-due treasury notes and other pressing demands on the treasury. During the last quarter, about eight millions of treasury notes were redeemed, which, with the two and one-half millions redeemed since the first instant, make ten and a half millions. The amount received from the loan, a small fraction above seven millions, threw upward of three and a half millions of these notes on the other resources of the treasury for redemption. This is one of the principal causes of the delay and difficulty which have recently existed in providing for other demands of public service." So low had the credit of the Government fallen, through the political agitations and troubles just previous to the War of the Rebellion, that he closed his communication by calling attention to the fact, that, "there are deposited with twenty-six of the States, for safe keeping, over twenty-eight millions of dollars belonging to the United States, for the payment of which the promise of these States is pledged by written instruments on file in this Department. The annual statement of receipts and expenditures for the year ending June 30, 1860, represents this amount as part of the balance in the treasury' on that day. I refer to this final resource as an available one, should the public exigencies demand it. It is not doubted that the greater portion of the amount so deposited would be promptly and cheerfully paid should an exigency arise involving the public honor or safety. If, instead of calling for these deposits, it should be deemed advisable to pledge them for the repayment of any money the Government might find it necessary to borrow, loans contracted on such a basis of security, superadding to the plighted * * LOANS AND NOTES OF 1861. 79 faith of the United States that of the individual States, could hardly fail to be acceptable to capitalists." During the following month the act of February 8, 1861, was passed, which authorized a loan not exceeding twenty-five millions of 6 per cent. bonds, the avails to be used in the payment of current expenses, for the redemption of outstanding treasury notes, and to replace in the treasury such amounts as had been paid in treasury notes. Of this loan, bearing 6 per cent. interest, and having twenty years to run, $18,415,000 was issued, at an aggregate discount of $2,019,776, or an average rate of $83.03 for $100. In less than a month after the passage of this act providing for the payment of the treasury notes outstanding, the act of March 2, 1861, was passed, which authorized a loan of ten millions at 6 per cent., redeemable upon three months' notice, after July 1, 1871, payable July 1, 1881, or, instead thereof, the issue of $10,000,000 of new notes in denominations of not less than $50, bearing interest at the rate of 6 per cent. per annum, payable semi-annually, receivable in payment of all debts due the United States, including customs duties, and redeemable at pleasure, within two years from the passage of the act. The same act largely increased the duties on imports, and authorized the substitution of treasury notes for the whole or a part of the loans previously authorized. Under this act, $35,364,450 in all, of treasury notes, were issued, of which $22,468,100 were redeemable in two years, and $12,896,350 redeemable in sixty days after date; and a considerable portion of these notes were paid out to creditors. A new series of plates was prepared for each of the issues of treasury notes under the acts of January 28, 1847, December 23, 1857, and March 2, 1861. The size of the latter note was 7 by 33 inches. CHAPTER IX. TREASURY NOTES OF THE PERIOD OF THE CIVIL WAR. GENERAL DIX was succeeded by Secretary Chase on March 7, 1861. The great increase of import duties, imposed by the act of March 2d, had caused the bonds of the Government to advance in the market, and it seemed to be a favorable time to offer the remainder of the bonds authorized by the act of February 8, 1861. Bids for eight millions of the bonds were opened on April 2d. Offers at from 94 to par were received for $3,099,000, and 93 for the remainder of the loans. All bids below 94 were rejected. In the midst of these negotiations it became known that arrangements were being made to send an additional force for the relief of Fort Sumter. No additional bonds were sold until May 31st, when $7,310,000 were sold at an average rate of $85.34 for $100. In place of bonds, five millions of treasury notes were offered, and the bids opened on April 11th amounted to only one million; but shortly thereafter the whole amount offered was taken. On the following page is the form of a $50 note issued under the act of March 2, 1861. The United States 6 per cent. bonds were selling in the market at 83, and money at call was worth from 4 to 5 per cent.; but the treasury notes bearing 6 per cent. interest could be held and used or sold |