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tion.

limited to fifty millions of dollars, and was extended to seventy-five millions of dollars by the act of July 25, 1868. The whole amount actually issued has been about eightyfour millions of dollars, but not over seventy-five millions at any one time. They are all, or nearly all, held by the banks, and the interest has been paid upon them semiannually.

From the commencement of issuing these certificates in Gradual rodemp payment of compound-interest notes they have been canceled as fast as redeemed by the Treasury Department, and never reissued. The amount outstanding was gradually reduced, by being presented for payment from time to time, whenever legal-tender notes were needed by the holders, until it was less than forty-six millions of dollars on the 12th of July, 1870. At that date Congress passed an act authorizing the increase of national bank circulation to the extent of fifty-four millions of dollars, and requiring the redemption of these certificates monthly to the amount of the issue of new bank circulation during the preceding months, as reported to the Secretary by the Comptroller of the Currency. Under the operation of this requirement the three per cent. certificates are being called in for payment, and will soon disappear from the reports of the outstanding debt, except such as may remain unclaimed after interest thereon has ceased to run.

5.

NAVY PENSION FUND.

This fund arises from the money accruing to the United Origin and object States from the capture of prizes authorized by law, and is of the fund. set apart for the payment of pensions to the officers, seamen, and marines who may be entitled to receive the same, and if the fund is insufficient for that purpose, the public faith is pledged to make up the deficiency.

It is established and managed under the following laws: Act of April 23, 1800, chapter 33, sections 9 and 10, (a substitute for act of March 2, 1799, chapter 24;) act of March 26, 1804, chapter 48; act of April 16, 1816, chapter 56;

resolution of July 1, 1864, chapter 62; act of July 23, 1868, chapter 229, section 2; and act of July 20, 1868; and there are many acts authorizing payment therefrom.

The fund amounts to fourteen millions of dollars, for which no bonds have been issued, and of which no evidence of indebtedness exists, except what appears in the laws of Congress and the books of the Treasury Department.

It would hardly be called a debt, were it not included in the monthly debt statement of the Department; and since the passage of the act of July 23, 1868, providing that the interest on the fund shall be at the rate of three per cent. per annum, in lawful money, and applicable exclusively to the payment of navy pensions, it amounts simply to a permanent appropriation of four hundred and twenty thousand dollars a year to the payment of navy pensions.

6.

CERTIFICATES OF INDEBTEDNESS OF 1870.

Law authorizing issue.

The act of July 8, 1870, chapter 229, authorized the issue of certificates of indebtedness of the denomination of $1,000 each, to the amount of $678,362 41, payable in lawful money of the United States in five years, with interest semi-annually at the rate of four per cent. per annum, two-thirds to the State of Massachusetts, and one-third to the State of Maine, for the use of the European and North American Railway Company of Maine, to aid said company in constructing its line of railway; each of said States having assigned its interest therein to said railway company. These bonds were, by the act, to be in “full adjustment and payment for and on account of any matters arising from any money expended by said State of Massachusetts on account of the war with Great Britain in 1812 to 1815, or any interest thereon, or on account of any matters arising out of or accruing from the treaty with Great Britain, known as the treaty of Washington, or for or on account of any other matters which have been assigned by said States of Massachusetts and Maine to said railway company."

There were issued 678 certificates of $1,000 each, pays

Amount issued.

able to the Treasurer of the State of Maine or bearer, in five years from September 1, 1870, with semi-annual interest coupons of twenty dollars each attached, both payable in lawful money. The coupons are payable March 1 -when payable, and September 1. These certificates are all outstanding, and will become payable September 1, 1875. For the balance, $362 11, one other certificate was issued, and has since been paid and canceled.

7.

CURRENCY SIXES;

or

, &

PACIFIC RAILWAY BONDS.

Title, denomina These bonds are commonly known as “CURRENCY SIXES," tions, designabecause they bear six per cent. interest, and are the only bonds of the United States payable, principal and interest, in lawful money. On the public debt statement and the books of the Treasury Department they are called “PACIFIC RAILWAY Bonds,” on account of their having been issued to certain Pacific railroads in the nature of a loan, under acts of Congress to aid in the construction of their roads.

They are all registered, in denominations of $1,000,$5,000, and $10,000; are payable in lawful money on a day therein named, which is at the expiration of thirty years from the date of original issue, with interest at six per cent. per annum, payable semi-annually, on the 1st days of January and July in each year, in lawful money; and are designated with the words " [NAME OF COMPANY] RAILROAD COMPANY,”' PAYABLE THIRTY YEARS FROM DATE,'' and “Act of July 1st, 1862, Act of July 2d, 1864.”

The name of a railroad company is thus printed on the bonds merely to indicate to which company they were issued. United States

They are the bonds of the United States, containing the alone responsible absolute unconditional promise of the national Government, and the Government alone is responsible for the payment of both principal and interest. The railroad companies

to holder.

are under no obligations to the holders of the bonds, but only to repay the United States, in the manner set forth in the acts of Congress.

Bonds Issued.

THE FOLLOWING TABLE EXHIBITS THE NAMES OF TIE COMPANIES TO WHICI

THE BONDS WERE ISSUED, TIE AMOUNT, DATE OF ISSUE, AND TIMES OF
BECOMING PAYABLE.

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Central Branch Union Pacific,

late Atchison and Pike's
Peak.......

Kansas, late Union Pacific,

Eastern Division....

640,000 Jan'y 1, 1866. Jan'y 1, 1896. 640,000 Jan'y 1, 1867. Jany 1, 1897. 320,000 Jan'y 1, 1868. Jan'y 1, 1898.

640,000 Nov'r 1, 1865. Nov'r 1, 1895. 1,440,000 Jan'y 1, 1866. Jan'y 1, 1896. 2,800,000 Jan'y 1, 1867. Jan'y 1, 1897. 1,423,000 Jan'y 1, 1868. Jan'y 1, 1898.

320,000 Jan'y 1, 1867. Jan'y 1, 1897. 1,650,560 Jan'y 1, 1869 Jan'y 1, 1899, 1,628,320 Jan'y 1, 1868. Jan'y 1, 1898.

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Interest payable January 1 and July 1.

Grants by United
States.

These bonds were issued under the act of July 1, 1862, chapter 120, and the act of July 2, 1864, chapter 216, as amended by some subsequent provisions.

A right of way and certain public lands were thereby granted to the railroad companies, and provisions made requiring the Secretary of the Treasury to issue the bonds above mentioned to said companies, upon completing sections of their road, at the rate of sixteen thousand dollars per mile, except for certain parts more difficult of construction, for which they were to be issued at the rate respectively of thirty-two thousand and forty-eight thousand dollars per mile. The security of the United States rests upon the following provisions of law:

Security for repayment of Loudy.

* *

to redeem bonds

ACT OF JULY 2, 1862, CHAPTER 120. SEC. 5.

and to secure the repayment to the United States, as hereinafter provided, of the amount of said bonds so issued and delivered to said company, together with all interest thereon which shall have been paid by the United States, the issue of said bonds and delivery to the company shall ipso facto constitute a first mortgage on the Mortgage. whole line of the railroad and telegraph, together with the rolling stock, fixtures, and property of every kind and description, and in consideration of which said bonds

may

be issued;

And on the refusal or failure of the said company to re- Road, &c., to be deem said bonds, or any part of them, when required so to forfeited on faildo by the Secretary of the Treasury, in accordance with the use of company provisions of this act, the said road, with all the rights, functions, immunities, and appurtenances thereunto belonging, and also all lands granted to the said company by the United States, which, at the time of said default, shall remain in the ownership of said company, may be taken possession of by the Secretary of the Treasury, for the use and benefit of the United States: Provided, This section shall not apply to that part of any road now constructed.

SEC. 6. And be it further enacted, That the grants afore- Grants on condisaid are made upon condition, that said company shall pay said bonds at maturity, and shall keep said railroad and telegraph line in repair and use, and shall at all times rity. transmit dispatches over said telegraph line, and transport mails, troops, and munitions of war, supplies, and public stores upon said railroad for the Government, whenever required to do so by any department thereof, and that the Government shall at all times have the preference in the use of the same for all the purposes aforesaid, (at fair and reasonable rates of compensation, not to exceed the amounts paid by private parties for the same kind of service;)

And all compensation for services rendered for the Gov- Compensation for ernment shall be applied to the payment of said bonds services to U. s. and interest until the whole amount is fully paid. Said to be retained, company may also pay the United States, wholly or in pay in treasury part, in the same or other bonds, treasury notes, or other notes, bonds, &c. evidences of debt against the United States, to be allowed

And after said road is completed, until said bonds and after compleinterest are paid, at least five per centum of the net earn- tion of roads 5 per ings of said road shall also be annually applied to the pay-ings to be applied ment thereof.

to payment of

bonds. The lien of the United States is made subordinate to a Government lien

tion that companies shall pay bonds at matu

at par;

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