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Six per cent stock of 1813, 26,607,959 38 eleven millions. Through the reduction in this part Do. of 1814,

15,954,619 85 of the public expenditures, and through the operaSix per cent treasury note stock, 60,834 02 tion of the other causes we have alluded to, it beSix per cent stock of 1815, 12,288, 149 64 came practicable to redeem twenty millions of the Seven per cent stock,

8,856,960 00 public debt, and the total amount was thus, at the Five per cent stock, subscription to

end of the year, reduced to 103 millions. the United States bank,

7,000,000 00 The last of the internal duties which had been Old unfunded debt,

31,191 13 imposed for war purposes, ceased with the termiTemporary loans,

550,000 00 nation of this year. The act imposing duties on American claim assumed by Louisi.

sundry American manufactures, had been repealed ana convention,

41,624 63 on the 26th of February 1816. The act laying a Treasury notes,

3,450,000 00 duty on household furniture, and gold and silver Mississippi stock,

4,16 ,343 12 watches had been repealed on the 9th of April 1816.

The taxes on stills, domestic spirits, carriages, Total,

$123,491,965. 16 refined sugar, sales by auction, and the stamp Against this was the balance of twenty-two mil- duties were continued to the end of 1817. The lions in the treasury, consisting principally in the duty on retailers, which had been increased fifty notes of non-specie paying banks, which notes the per cent by an act of December 23d, 18!4, was by officers of finance were to use their best skill to an act of December 31st, 1816, reduced to its old have exchanged for certain portions of the public amount. It ceased altogether, with the remaining stocks.

war taxes, on the 31st of December 1817. The withdrawal of a portion of the bank paper The direct tax imposed for 1814, was three from circulation, in the latter part of 1816 and the millions: that for 1815, five millions: for 1816, beginning of 1817, as a means preparatory to the three millions. resumption of specie payments, had a tendency to The sums received on account of the internal lower prices, and thus make the importations less taxes, in the years 1814, 15, 16, and 17, amounted than they were in the previous year. But the to 14,143,852 dollars: on account of the direct withdrawal was not made to any extent except by taxes, in the same years, 10,469,992 dollars. On the banks on the seaboard, and the total reduction account of the internal taxes in the three succeed. in the amount of circulating medium, was not ing years, 1818, 19, and 20, the receipts were sufficient to change either the character or the 1,291,133 dollars: on account of the direct taxes in course of trade, or to convince the majority of men the same years, 397,570 dollars. On account of of the fallacy of the principles on which they esti- the internal taxes, in the nine years from 1820 to mated their riches. The importations, though 1829, both inclusive, 304,702 dollars : on account less extensive than they had been in the previous of the direct taxes, in the same period, 91,996 year, were very great, and the customs yielded dollars : making an aggregate of 15,739,688 dollars,

revenue of twenty-six millions in 1817,--a received on account of the internal taxes; and of greater amount than they have yielded in any year, 10,941,550, received on account of the direct taxes. either before or since, always excepting the ever A small part of the war taxes is yet to be collected. memorable year of 1816. In the same period, the By an act of the 3d of March 1817, so much of internal taxes, produced upwards of $2,600,000, any acts as authorised the issuing or re-issuing of the direct tax upwards of 1,800,000, and the public treasury notes, was repealed : all the treasury notes Jands nearly two millions. The whole revenue ex which had become, or should become, the property ceeded 33 millions, which, added to the balance in of the United States, were directed to be cancelled the treasury on the last day of 1816, placed nearly or destroyed, at such times, and under such regufifty-six millions at the disposal of the officers of lations and securities as the commissioners of the finance, for the service of the year 1817.

sinking fund should establish. At the same time, This amount could be more efficiently applied all such acts as authorised any further loan were than the sums received in 1815 and 1816. By a repealed, and the appropriation in favour of the resolution of congress, it had been provided that sinking fund was increased from $8,000,000 to only specie and the notes of specie paying banks, $10,000,000. To dwell on the modifications which should be received in payment of duties, after the this act made in the sinking fund, is unnecessary. 20th of February 1817. From that day, the serious It has not been by opening a separate account embarrassments of the government were at an end. under the head of " Commissioners of the sinkAll the evils in subsequent years, which were the ing fund” and entering thereunder certain debits necessary, though remote effects, of the attempt and credits, that our national debt has been remade to carry on the war of 1812-14, by means duced to its present small amount. It has been of bank credits, and bank notes, fell either on the by keeping the expenditures for a series of years banks or on the people.

below the receipis, aided in no small degree, at the The expenditures for naval and military purposes, commencement, by that system of measures, which exceeded 23 millions in 1815, and amounted through which the after consequences of the finan10 20 millions in 1816, were, in 1817, reduced to cial policy of 1812—14 were thrown off the govern.

a

ment, and thrown on the incorporated institutions mentioned that the object of private men in acceptand the people. “Strictly speaking,” says Dr. ing charters is their own pecuniary benefit. If no Seybert, "the essential character of a sinking fund, means could have been found of investing what had was not to be found in the operations of that of the been given by the government in exchange for the United States : all its sources might vary and fail: public stocks, the net revenue of the bank would even the application of the fund was varied with have been diminished 780,000 dollars per annum. circumstances. The annual reports of the commiss. It was natural for the directors to try to devise ioners exhibit the sinking fund in the payment of means to prevent the curtailment of profits, and the the interest and charges, and the redemption of easy means of increasing the amount of loans to the principal of the public debt; in the reimburse- individuals as naturally suggested itself. ment of temporary loans, and the absorption of By the 26th of February 1818, the amount of bills treasury notes; in the payment of commissions and discounted by the bank exceeded $42,000,000. In charges to agents in the United States, and in July of the previous year, it appears to have been Europe; in the payment of arrearages due to the less than 4,000,000. So great and so sudden an inarmy, and in discharging the floating debt. Instead crease, was more than the commerce of the country of being uniformly confined on a single line of could bear. In fact, though the business of the looperation, it was active in all situations as tempo- cal banks had been considerably reduced by July rary circumstances indicated.”

1817, there were still so many evidences of debt, of If, since the time of Dr Seybert, what is called every kind, public and private, in circulation, that the Sinking Fund, has been more faithfully applied nothing but a voluntary surrender on the part of to the purposes expressed by law, it has been be- the directors and stockholders of one half or of cause there has been less necessity for diverting it three fourths of their expected profits, could have from its original object.

restored business to the state in which it was before The balance in the treasury at the commencement the war began. It was not to make sacrifices of of the year 1818, was a little less than 15,000,000 their own property in order to relieve the treasury dollars. The receipts from customs during the department that they had subscribed to the bank year were 17,000,000; from the internal and direct established by congress: but to make profit for taxes, being part of the arrears of the same, up themselves; and they acted as is natural for men to wards of 1,200,000; from the public lands, 2,600,000; act who adventure in banking operations. from the Bank of the United States upwards of For some time the policy of increasing the amount 500,000. The whole revenue fell a little short of of loans to individuals, was such as to give every 21,600,000, which, with the balance in the treasury, encouragement to proceed in it. In September made a sum of nearly 36,000,000 for the service of 1817, the shares of the bank were sold at 56 per the year.

cent advance: and the apparent prosperity of the During this year a reaction commenced, the se country was as great, or nearly as great, as in the rious consequences of which were long felt by many remarkable year

1816. In February 1818, bank of the people. We can but briefly describe causes shares were at 46 per cent advance, being 10 per and effects which it would require a volume fully cent lower than in the preceding September, and to unfold.

other indications of a reaction were observable. By The provisions of the charter of the United the 20th of July, the pressure on the bank was such, States Bank were, that its capital should be that the directors found it necessary to order a re835,000,000, of which 7,000,000 should be suh. duction of discounts to the amount of 5,000,000. scribed by the government and paid in five per In October, an additional reduction of 2,000,000 cent stock. Of the remaining 28,000,000, which was ordered to be made. But these measures had were to be subscribed by individuals, three-fourths not the effect anticipated. On the 1st of February were made payable in government securities. 1819, serious apprehensions were entertained that

The act was passed in April 1916, when the go- the bank would be obliged to suspend specie payvernment securities were at a discount in the mar- ments, and these apprehensions were not entirely ket. By creating a new use for these evidences of the removed before the 7th of May. The bank was public debt, it gave them a new value, and about then considered out of danger: but, through the the time the bank of the United States went into course which business took, the amount loaned on operation, the public stocks rose to par.

private security was further reduced. From Feb. The next grand operation of the treasury depart uary 21st 1818 10 December 31st 1819, the reducment, was to exchange part of the balance of tion of the amount of loans on private security, ex22,000,000 of the "unconvertible" notes of the ceeded 12,000,000 dollars: or, was nearly equal to state banks, for evidences of the public debt. In the amount of the public debt, forming part of the six months after the bank opened its doors, says capital of the bank, which the secretary of the a writer whom we have already quoted, “the secre treasury redeemed in six months after the bank tary of the treasury, by the magic of the fabled commenced operations. finger of Midas, transformed the paper deposits of Mr. Crawford, writing in 1819, said, “ few inthe treasury into gold and silver, and redeemed stances are on record of sufferings so deep and exfrom the bank 13,000,000 dollars of the funded tensive as those which have overspread the United debt, part of its capital.”

States.” The particulars of the sufferings he alThe object of government in instituting the bank, ludes to, would belong to a history of banking rawas to relieve the treasury: but it hardly needs be ther than to a history of finances. We can creat of

them here, so far only as they were connected with tent: and it ought to excite no surprise, that, when the immediate operations of government. Suffice the practical sanction of the supreme authority was it to state, that it was not till 1820-21, that business given to the use of “inconvertible”, paper, the was brought in the middle states into the condition banks should greatly increase their issues. Nor in which it was before the war; and that the confu- did they alone profit by the “plentifulness of sion in the western, and in some parts of the south- money.' To tbis cause we must attribute the net ern states, was not over till 1825, or 1826.

revenue of eighty millions for the years 1816 and It is not unusual to ascribe these sufferings to 1817. The “ inconvertibility” of the immense baerrors in the early administration of the Bank of lances in the treasury at the end of the years 1815, the United States, in connexion with the operations 16, and 17, did, indeed, render it difficult to satisfy of the local banks in the same period, and in pre- the public creditors in those parts of the country vious years. But this is giving only the instru- where specie only would be received, but, without mental cause. The efficient cause is to be found in 6 inconvertible " paper, it would not have been the financial policy of 1812-14—that policy which easy to satisfy the public creditors in any part of led us to attempt to carry on a war with the most the country. It was through the depreciation of powerful nation on the globe, on a revenue of the currency in the years subsequent to the war, iwelve million dollars. Our expenditures in time that the government was so soon able to discharge of peace were eight millions, including the interest between twenty and thirty millions of debt. on the national debt, and with the remaining four Those peculiarities in the constitution of the millions we sought to defray the expense of fleets United States Bank, which rendered its operations and armies. The only way in which so incon- less beneficial than were expected, are also to be siderable a disposable revenue could be made to ascribed to the embarrassments of government. It serve the purposes intended, was by borrowing was that a large amount of government stock bank-notes and bank credit, by creating a double might be absorbed, that an institution was esiabdebi; a debt, in the first place, from the govern- lished with so large a capital as thirty-five millions, ment to the banks, or the borrowers from the when there was hardly room for a bank with a banks; and, in the second place, a debt from the capital of five millions. The charter was, as has banks to the people to whom government trans. already been observed, granted in April 1816, when ferred the bank notes and bank credits. To sup- government securities were below par. By conply the exigences of the government, and to in- verting a large portion of them into bank stock, the crease their own profits, the banks issued more outstanding debt was funded on more favourable notes than they could redeem; and that the system terms than would otherwise have been practicable: should continue, it was necessary that the banks but by creating a bank with so large a capital, a neshould not press the government for payment, nor cessity was imposed of doing a very great business, the people press the banks.

or else of making dividends much below the usual The accounts which have been published of the rate. exports of specie in the year after the war, show Much has been said of the manner in which the that the banks in the principal sea-ports had the payment of the second and third instalments of the power to resume their regular course of business subscription was effected; but if the members of on the return of peace. Bank paper being in no Congress did not know that the usual way of pay• small degree indebted for its circulaiing quality to ing all instalments after the first, is by discounting the fact of its being receivable in payment of dues the stock notes of the subscribers, ihey had noi to government, an order to the collectors of public much acquaintance with either the theory or the moneys not to receive any notes except such as history of banking. It was not, surely, to be excould on demand be exchanged for specie, would, pected, that men who associated with the proin one month, have overcome the reluctance of the fessed design of making profit for themselves, and principal institutions to resume specie payments, who paid a heavy bonus for their privileges, should and the others would gradually have imitated their depart from established usage, and trammel themexample. As government had, previous to the selves with restrictions which the legislature had, close of the war felt the inconvenier.ce of a di- either through policy or oversight, failed to imversified currency, its neglect to apply so simple pose. and so obvious a remedy, can be ascribed only to Banks being the creatures of government, if there its fiscal embarrassments. Institutions which are are any faults in their constitution, the blame must founded for private profit, must always be expected be laid on the supreme authority. to take advantage of so many opportunities for ac A bank with a capital of about two millions in quiring gain, as the policy of government will specie, twenty-one millions in evidences of public allow, or its necessities compel it to afford. They debt, and twelve millions in evidences of private pay for their privileges, and ihe courts of law have, debi, or stock-notes of the subscribers, was exwe believe, decided that charters are always to be pected to perform what could have been effected construed in the manner most favourable to the only by a bank having a capital of thirty-five milgrantees. The government's receiving " incon- lions in specie, all paid in on the day on which it vertible” paper, in payment of duties, was quite as commenced operations. So unreasonable an exefficient a sanction of the continued suspension pectation must necessarily have been disappointed: of specie payments, as could have been afforded by but, notwithstanding the manner in which the bank an act of Congress passed expressly with that in- was constituted, the reaction which began in 1818

would not have occurred, if so large a portion of ceipt of duties which had accrued during the prethe public stocks which constituted part of the ori ceding year. The revenue in 1819 was further inginal capital of the bank, had not been exchanged creased by speculations in the public lands, which for the depreciated paper in the United States the previous abundance of money had in part occatreasury. We have seen that, when the reduction sioned. In 1819 the receipts at the treasury on of private loans on private security was greatest, it account of the public lands amounted to 3,270,000 did not equal the amount of public stock, which dollars, a greater sum than has been received in any the bank was obliged to transfer to the govern one year, either before or since. In 1820 the effect ment in -six months after it began business.

of the commercial reaction, which began in 1818, There is no intention here of casting a personal was felt in a very sensible degree by government in censure on the men with whom the financial policy the reduction of the revenue both from customs and of 1812–14 originated. But in the reprobation of from the public lands. In the first quarter of 1821 the principles of that policy, all must unite, when the customs reached their lowest point of depressthey sce it was that which led to the suspension of ion: and the utter inability of many of the purspecie payments, to the inordinate multiplication of chasers of public lands to comply with their enbank-paper, to the reaction of 1818, and the com gagements, induced Congress to pass a law to remercial difficulties of subsequent years.

lieve them from a part of their obligations. At the close of the year 1818, the balance in the In the second quarter of 1821 the import trade treasury was reduced io $1,478,526, a great part of began to revive. The violent effects of the reaction which was in paper, which no fiscal ingenuity couid were over in those parts of the union where the transmute into gold and silver. Appearances were greatest portion of the public revenue is collected. at times very discouraging, but the receipts of the In 1822, owing to the revival of the import trade, treasury in the whole of 1819 were sufficient to de the revenue from the customs was increased to fray the current expenses of the year, and discharge 17,000,000, and the balance in the treasury at the upwards of $4,000,000 of the public debt.

end of the year was upwards of 4,000,000. The In 1820 the revenue from the cu ms was re greater part of this balance consisted of money of a duced to $15,000,000, and the public lands yielded kind which could be applied to any purposes the but half as much as they had yielded in 1819. The public service might require; and from this time bank of the United States paid 1,000,000, being the we may date the regular and rapid reduction of the second and third instalments of its bonus; and a national debt. small amount was received for arrears of internal In 1823 the revenue from the customs increased and direct taxes.

The clear revenue of the year, to 19,000,000, and the published accounts showed a independent of loans, was 17,800,000, which was reduction in the public debt of between two and sufficient, after paying current expenses, to reduce three millions, and a balance in the treasury at the the national debt in the extent of 1,000,000. The end of the year of nearly 9,500,000. payment of the last instalment of the Louisiana An unsuccessful attempt was made under auloan, and the reimbursement of a portion of the old thority of an act passed in April 1822, to exchange six per cent and deferred stocks, rendered it neces twenty-six millions of the six and seven per cents, sary to borrow 3,000,000 dollars: but this was which were reimbursable in 1825, 26, 27 and 28, merely changing the form of debt, not increasing it. for a five per cent stock, reimbursable at a later The total of the debt was actually reduced, as has period. The holders of stock to the amount of already been stated, by the revenue exceeding the only 56,704 dollars, accepted the terms offered by current expenses, in the amount of 1,000,000. Congress.

In 1821 the customs yielded 13,000,000, being one Efforts of this kind were repeated in 1824. and half as much as they had yielded in 1817. The 1825, and were then more successful, though not to whole revenue of the government, from all sources the extent anticipated. In 1824 nearly four millions except loans, was 14,500,000 equal to one-fourth and a half, and in 1825 upwards of one million and of the net revenue of 1816. It became necessary to a half of the six per cent war-stocks were exchanged negotiate a loan of 5,000,000, which, owing to the for stocks bearing an interest of four and a half want of profitable employment for capital in business, was obtained on very favourable terms. The In 1824 a loan of five millions at four and a half money was borrowed at five per cent, and the per cent was negotiated with the United States lenders gave a premium on the average of nearly five bank, to satisfy the claimants under the Florida dollars fifty-nine one-hundredths per cent. This ren treaty. The surplus of moneys in the treasury was dered it necessary to issue new stock to the amount applied to the reimbursement of the seven per cent of only 4,735,296 dollars 20 cents. A portion of the stock, to the reimbursement of the last remains of old six per cent and deferred stock having been re the old six per cent and deferred stocks, and of all imbursed during the year, the net increase of debt but a very small part of the six per cent exchanged was less than 4,000,000.

stock of 1812. The published accounts showed a Through the system of granting a credit on duties, reduction in the total amount of public debt, in the events which diminish or increase the import trade, course of the year, of between six and seven milhave not their complete effect on the revenue from lions. the customs till some time after they have begun to In 1825 the sum of five million dollars was boroperate on commerce. The demands on the trea rowed from the United States bank at four and sury in 1819 were met, to a great extent, by the re a half per cent, to facilitate the payment of the six

per cent.

per cent stock of 1812: and upwards of a million tary of the treasury may make in his report at the and a half of six per cent stocks of other years commencement of the session of congress of 1832–33. were, as mentioned above, exchanged for stock bear. The total receipts of the year 1832 the secretary ing an interest of four and a half per cent. Since of the treasury estimates at 30,100,000 dollars, viz. that time the operations of the treasury department have been conducted without incurring any new, or From the customs,

26,500,000 00 changing the form of any old debts; and, owing to Public lands,

3,000,000 00 the prosperous state of the revenue, the public debt Bank dividends,

490,000 00 has been reduced with a rapidity which the expe

Incidental receipts,

110,000 00 rience of other years gave the people no reason to The expenditures he estimates at 13, 365,202 dolexpect.

lars 26 cents, viz. From the 1st of January 1824 to the 1st of On account of the civil list, foreign January 1828, the principal of the debt was reduced intercourse, and miscellanies, 2,809,484 26 nearly twenty-three millions of dollars. From the Military service,

6,648,099 19 first of January 1828 to the first of January 1832, the Naval service,

3,907,618 71 reduction was upwards of forty-three millions. In the tables annexed to this article, the reader

The surplus of revenue, with the balance in the will find a view of the receipts and expenditures of treasury at the beginning of the year, will be suffigovernment from the 4th of March 1789 to the zist cient to redeem all the three per cent and such other of December 1791, and from the 1st of January to

stocks as are by the terms of contract' reimbursable the 31st of December, for each year, from 1792 in this period. If the money should be applied in to 1829, both inclusive.

this way, the national debt at the end of the year. We give these tables in the form in which they will be about ten millions of dollars. were presented to the chairman of the committee

The public debt on the 2d of January 1832 was on retrenchment in April 1830: and add a state as follows: ment of the receipts and expenditures in 1830 and 1831, with an estimate for 1832, taken from subse.

1. Funded Debt. quent reports of the treasury department.

Three per cent stock created by act In 1830 the receipts were:

of August 1790, redeemable at the From the Customs,

$21,922,391 39
pleasure of government,

13,296,626 21 Public lands,

2,329,256 14

Five per cents of March 1821, reDividends on bank stock, .

490,000 00

deemable after first of January Incidental receipts

102,368 98
1835,

4,725,296 30
Five per cents (exchanged) of April
Total
$24,844,116 51

20, 1822, one-third redeemable anThe expenditures in the same year were,

nually after the 31st of December On account of civil list, foreign

1830, 31, and 32,

56,704 77 intercourse, and miscellanies, 3,237,416 04

Four and a half per cents of May 24th, Military service,

6,752,688 66 1824, redeemable after the first of Naval service,

3,239,428 63
January 1832,

1,739,524 01 Public debt,

11,355,748 22

Four and a half per cents (exchanged)

of May 26th, 1824, one half re-
Total
$24,585,281 55

deemable after the 31st of Decem

ber 1832, the residue after the 31st The balance in the treasury on

of December 1833,

4,454,727 95 the 1st of January 1831 was, $6,014,539 75 The secretary of the treasury in his report at

Total of fuoded debt,

$24,282,879 24 the commencement of the session of Congress of 1831-2, from the returns of three-quarters, and a

2. Unfunded Debt. calculation of the probable returns of the fourth quarter, estimated the total revenue of the year 1831 Registered debt, being claims reat 28,000,412 dollars 87 cents: the expenditures at gistered prior to the year 1798, 30,967,201 dollars 25 cents, (of which 16, 189,289 for services and supplies during dollars 67 cents were in payment of principal and in the revolutionary war,

27,919 85 terest of the public debt,) and the balance in the Treasury Notes,

7,116 00 treasury on the 1st of January 1832 at 3,047,751 Mississippi stock,

4,320 09 dollars 37 cents. Of this last amount 1,400,000 consist of funds which are not effective, being Total of unfunded debt,

$39,355 94 bank-notes received during the suspension of spe- Making the whole amount of the cie payments, and debts due from broken banks in public debt of the United States, $24,322,235 48 which the public money was deposited.

This statement of the receipts and expenditures By the 2d of January 1835, the whole debt may of 1831, is liable to the corrections which the secre be discharged, VOL. XVIII.-Part II.

3 S*

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