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CHAPTER II.

DEBT WHICH HAS CEASED TO BEAR INTEREST, COIN CERTIFI-
CATES, CERTIFICATES OF DEPOSIT, AND DEBT BEARING INTER-
EST IN CURRENCY.

1. Debt which has ceased to bear interest.
2. Coin certificates, or gold certificates.
3. Certificates of deposit.
4. Three per cent. certificates.

5. Navy pension fund.
6. Certificates of indebtedness of 1870.
7. Currency sixes, or Pacific Railway

bonds.

1.

DEBT WHICH HAS CEASED TO BEAR INTEREST.

Holders of Government securities are slow to send them Balances of old in for redemption at maturity, even after interest has ceased loans. to run upon them, and balances of loans remain many years uncalled for.

Of the numerous debts matured prior to the year 1837 there are still outstanding and unclaimed of the principal $57,665; and of all loans heretofore matured the amount which had not been presented for payment September 1, 1872, was $6,170,675 26.

It is probable that some part of the bonds and other evidences of these outstanding balances have been destroyed by fire, shipwreck, and otherwise; and by reason of the death of the owners, or other causes, all knowledge of the existence of the indebtedness has passed away from those who might be entitled to avail themselves of the claims.

The Government sets up no statute of limitations against No statute of lim. matured bonds, and pays those which have been destroyed, itation. upon proof of destruction and ownership, at any period of time.

Of all the bonds matured and all issues of notes and cur- No over-issues. rency called in for redemption, I am assured by those who have carefully examined the books of the Treasury Depart

ment from its foundation, that in no case has there been redeemed or presented for payment any more than the books of the Government show to have been properly issued; and it is to the credit of the Treasury Department, and exhibits in a most striking manner the perfection of its organization as well as the honesty, integrity, and accuracy of its officers and employés, under all administrations for a period of over seventy-five years, that, in issuing more than seven billions of dollars in securities of all kinds, including bonds, certificates, and notes, there has never been a dollar of fraudulent over-issue.

2.

COIN CERTIFICATES, OR GOLD CERTIFICATES

Are authorized by the following section of the act of the 3d of March, 1863, chapter 73:

Sec. 5. And be it further enacted, That the Secretary of the Treasury is hereby authorized to receive deposits of gold coin and bullion with the Treasurer or any Assistant Treasurer of the United States, in sums not less than twenty dollars, and to issue certificates therefor, in denominations of not less than twenty dollars each, corresponding with the denominations of the United States notes. The coin and bullion deposited for or representing the certificates of deposit shall be retained in the Treasury for the payment of the same on demand.

And certificates representing coin in the Treasury may be issued in payment of interest on the public debt, which certificates, together with those issued for coin and bullion deposited, shall not at any time exceed twenty per centum beyond the amount of coin and bullion in the Treasury; and the certificates for coin or bullion in the Treasury shall be received at par in payment for duties on imports.

Designations, de These certificates are now designated on the face thereof numinations, &c. by the words “SERIES OF 1871,” “ACT OF MARCH 3, 1863,”

and “GOLD CERTIFICATES;' are in denominations of $100, $500, $1,000, $5,000, and $10,000, payable at the office of the Assistant Treasurer at New York, where they are dated

and countersigned by him, and are made payable to the Where issued, &c. order of a payee therein named. They are all issued from the Treasury at Washington through the Assistant Treasurer at New York, who, upon requisition, supplies them to other Assistant Treasurers and to Designated Depositaries, to be paid out to parties desiring them in settlement of interest on the public debt. By the present rules of the Department they are exchangeable for coin, and redeemed in coin only by the Assistant Treasurers at New York and Boston. They are receivable for duties everywhere.

Other series have been issued; some of those of 1870 were 011 series. designated “GOLD NOTES," and an earlier series still had the denomination of $20; but as these certificates are never reissued when once redeemed by the Treasurer at Washington, all except those of the series of 1871 will soon disappear from circulation.

When indorsed in blank these certificates pass by delivery, and to some extent form a circulating medium of gold notes, especially in New York city, where the large gold transactions in the payment of duties and other business render them of great convenience.

The amount that may be issued is limited only by the Limit of issues. wants and ability of the business community and the requirement of law that they shall not at any time exceed twenty per cent. beyond the amount of coin and bullion in the Treasury.

3.

CERTIFICATES OF DEPOSIT

Are issued according to the provisions of the following act of Congress, of June 8, 1872, chapter 346:

AN ACT FOR THE BETTER SECURITY OF BANK RESERVES, AND TO FACILITATE

BANK CLEARING-HOUSE EXCHANGES.

Be it enacted by the Senate and House of Representatives Law of authoriza of the United States of America in Congress assembled, That tion. the Secretary of the Treasury is hereby authorized to receive United States notes on deposit, without interest, from national banking associations, in sums not less than ten thousand dollars, and to issue certificates therefor in such form as the Secretary may prescribe, in denominations of not less than five thousand dollars; which certificate shall be pay

able on demand in United States notes at the place where the deposits were made.

SEC. 2. That the United States notes so deposited in the Treasury of the United States shall not be counted as part of the legal reserve; but the certificates issued therefor may be held and counted by national banks as part of their legal reserve, and may be accepted in the settlement of clearinghouse balances at the places where the deposits therefor were made.

Sec. 3. That nothing contained in this act shall be construed to authorize any expansion or contraction of the currency; and the United States notes for which such certificates are issued, or other United States notes of like amount, shall be held as special deposits in the Treasury, and used only for the redemption of such certificates.

Approved June 8, 1872.

Designation, &c.

The certificates are designated on the face thereof with the words “CERTIFICATE OF DEPOSIT," "UNITED STATES NOTES, and “ACT OF JUNE 8, 1872, chapter 346,” are in denominations of $5,000 and $10,000, are signed by the Treasurer and Register of the Treasury and countersigned by the Assistant Treasurer by whom they are issued, and are made payable to the order of a payee therein named, in United States notes, on demand, at the office of the Assistant Treasurer where they are countersigned and dated.

4.

THREE PER CENT. CERTIFICATES;

or

TEMPORARY LOAN CERTIFICATES.

Law of authoriza

tion.

The act of March 2, 1867, (chapter 194,) for the purpose of redeeming and retiring any compound-interest notes outstanding, directed the Secretary of the Treasury to issue temporary loan certificates, bearing interest at a rate not exceeding three per cent. per annum; the principal and interest payable in lawful money on demand, and provided that they might be held by any national bank as a part of its reserve required by law, to the extent of three-fifths of such reserve. The amount to be issued was by that act

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 redemp 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.

Origin and object

This fund arises from the money accruing to the United 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;

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