hundred and sixty, may be applied in detecting and bringing to trial and punishment, persons engaged in counterfeiting Treasury notes, bonds, or other securites of the United States, as well as the coin of the United States. And to carry into effect the preceding sections of this act the sum of three hundred thousand dollars is hereby appropriated, out of any money in the Treasury not otherwise appropriated. § 6. And be it further enacted, That all the provisions of the act entitled 'An Act to authorize the issue of United States notes, and for the redemption or funding thereof, and for funding the floating debt of the United States,' approved February twenty-five, eighteen hundred and sixty-two, so far as the same can or may be applied to the provisions of this act, and not inconsistent therewith, shall apply to the notes hereby authorized to be issued. Approved, July 11, 1862. A. LINCOLN." POSTAGE STAMPS AND FRACTIONAL CURRENCY. Another expedient resorted to for providing means to carry on the war, was the issue of postage stamps and fractional currency. After the suspension of specie payments by the banks and the passage of the first legal tender act, gold and silver were in a great measure banished from circulation. There was a great scarcity of small change in ordinary business transactions. Corporations, individuals and firms commenced issuing shinplasters to supply the deficiency. It soon became apparent that unless some action was taken to prevent it, the country would be flooded with a heterogeneous fractional currency of very little value, and very vexatious in business transactions. To remedy these evils, and in order that the Government might avail itself of the advantages of this circulation, Congress, at the request of Secretary Chase, passed the following bill: CHAPTER CXCVI. "An Act to authorize payment in Stamps, and to prohibit circulation of notes of less denomination than one dollar. SECTION 1. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the Secretary of the Treasury be, and he is hereby directed to furnish to the Assistant Treasurers, and such designated depositaries of the United States as may be by him selected, in such sums as he may deem expedient, the postage and other stamps of the United States, to be exchanged by them, on application for United States notes: and from and after the first day of August next such stamps shall be receivable in payment of all dues to the United States less than five dollars, and shall be received in exchange for Uuited States notes when presented to any Assistant Treasurer or any designated depositary, selected as aforesaid, in sums not less than five dollars. § 2. And be it further enacted, That from and after the first day of August, eighteen hundred and sixty-two, no private corporation, banking association, firm or individual, shall make, issue, circulate, or pay any note, check, memorandum, token, or other obligation for any less sum than one dollar, intended to circulate as money or to be received or used in lieu of lawful money of the United States; and every person so offending shall, on conviction thereof in any district or circuit court of the United States, be punished by fine not exceeding five hundred dollars, or by imprisonment not exceeding six months, or by both, at the option of the Court. Approved July 17, 1862." The use of stamps for small change did not work well in practice, and Secretary Chase recommended that fractional currency should be authorized in the place of postage and revenue stamps. This recommendation was carried into effect by the 4th section of the act of March 3d, 1863, by which the Secretary was authorized to issue fractional currency to any amount not exceeding $50,000,000, redeemable in United States notes in sums not less than three dollars, and receivable for postage and revenue stamps, and also in payment of any dues to the United States less than five dollars, except duties on imports. This fractional currency was not made a legal tender for private debts, but upon the whole it has served a useful purpose; and the second section of the act of July 17, 1862, prohibiting all other shinplasters, has kept the country free from a flood of small "paper trash," which at one time was very annoying to the business community. The Government has had the benefit of an average circulation of this form of credit to the amount of about $30,000,000, which is still outstanding, and which should at an early day be replaced by the silver coins which were in common use before the war. Would it not be well to destroy this currency as fast as it becomes mutilated and is returned to the Treasury Department? If no more should be printed or issued it would not be long before the present issue would wear out and be replaced by small coins. SECOND ANNUAL REPORT OF SECRETARY CHASE, DEC. 4, 1862. Secretary Chase again earnestly recommended the National Currency Bank Bill, and urged its passage by additional arguments, which he presented more in detail than in his first report. "He still adhered to the opinion expressed in his last report that a circulation furnished by the Government, but issned by banking associations organized under a general act of Congress, is to be preferred to either United States legal tender notes or notes of State Banking Corporations. Such a circulation, uniform in general characteristics, and amply secured as to prompt convertibility by national bonds deposited in the Treasury by the associations receiving it, would unite, in his judgment, more elements of soundness and utility than can be combined in any other. Little direct aid is, however, to be expected from this plan during the present, nor very much, perhaps, during the next year. He briefly argued the constitutionality of this plan as an auxiliary to the power to borrow money; as an agency of the power to collect and disburse taxes; and as an exercise of the power to regulate commerce, and of the power to regulate the value of coin." He recommended a further limited issue of legal tender notes as a wise expedient for the present time, and as an occasional expedient in future times, and the immediate passage of the bank bill for raising the additional means to carry on the war. $900,000,000 LOAN ACT. We now come to the consideration of the $900,000,000 Loan Act, which, in connection with loan acts already passed, conferred more discretionary power on the Secretary of the Treasury than was ever granted by law to any other Finance Minister in the world; and which ultimately led to a dangerous expansion of credit circulation in various forms, and in connection with the bank bill, which passed about the same time, to an enormous inflation of prices, caused by the over-issuing of paper money which came very near proving fatal to the finances of the Government and the legitimate business of the country. The bill having been carefully considered in the Committee of Ways and Means, was, on the 8th of January, 1863, reported from the Committee to the House by Mr. Stevens. It was entitled, "A bill to provide Ways and Means for the support of the Government;" which was read twice, ordered to be printed, referred to the Committee of the Whole, and made the special order for Monday, the 12th inst. (House bill No. 659.) The bill as reported did not contain some provisions which Secretary Chase was very anxious to have passed-one was to repeal the provision restricting him in the sale of bonds to the 'market value'— another was to abrogate that most equitable and just provision contained in the original legal tender act, allowing the holders of legal tender notes to convert them at any time into 5-20 six per cent. bonds, interest payable semi-annually in coin. The Committee did not deem it just to abrogate this provision, while Secretary Chase believed its repeal would enable him to make better terms in selling bonds. MR. SPAULDING'S OPENING SPEECH ON THE BILL. On the 12th, the bill being the special order, was taken up in Committee of the Whole, and, an amendment having been offered by Mr. Stevens, Mr. Spaulding opened the debate upon it in the following speech: "Mr. CHAIRMAN-This subject is a very dry one, but it is intensely interesting at the present time. I propose to discuss the bill reported by the Committee of Ways and Means, with the amendment of the gentleman from Pennsylvania, so far as I shall be able during the hour allotted to me under the rules of the House. The immediate requirements of the Treasury are not less than $100,000,000. Before you can pass this bill through both Houses, have it approved by the President, and get bonds and notes engraved, printed and issued, at least $50,000,000 more will be required. The pressing demands upon the Treasury between this and the first of next month, for the pay of soldiers and other creditors, may be put down at $150,000,000. The gold and silver in the banks in New York, Boston and Philadelphia, on the first of this month, probably did not exceed $49,000,000; to which you may add the gold and silver in all other banks in all the loyal States, as will appear in official reports to the first of January, 1863, and the whole sum will not exceed $87,000,000. All this coin is necessary for the banks to take care of their own liabilities; but even if the Secretary could, on the credit of the Government, by a sale of bonds at any sacrifice, or by the aid of the military power, visit every bank in the country, and by force compel all this coin to be paid into the Treasury, it would not pay fifty cents on the dollar on the demands due from the Government, and which ought to be paid in the next twenty days. It is therefore perfectly plain that even the small sum of $150,000,000, now due, cannot be paid in gold. It would be a gratification to me, and, I doubt not, to every other loyal citizen, if it were otherwise. It is no fault of the Secretary or of Congress that gold cannot now be paid to the soldiers and other creditors. It is simply an impossibility, by any plan, to get enough for that purpose. There was never a more pertinent application of the old maxim than when applied to our present condition, when we cannot do as we would, we must do as we can.' 6 I have had a strong desire to provide money upon a specie basis, for the support of the army and navy, during the pending struggle to preserve the Constitution and the National Union. I would much prefer to pay gold and silver to all the creditors of the Government. During the first six months of the war, I was in hopes that our expenditures might be kept within limits that would admit of such a financial policy. I believe that this was the earnest wish of the Secretary of the Treasury, and of every member of the Committee of Ways and Means. But with an army in the field of from seven hundred thousand to one million of men, to be fed, clothed and paid, and all the material of war provided to make them efficient for active duty, it was very soon ascertained that the coin in the country, amounting only to about $250,000,000, if every dollar held by the banks and the people could have been availed of, was far too small to meet these large expenditures. We could not shut our eyes to the vastness of the volume of debt that was open before us. It was very soon made apparent that our national debt would, at an early day, reach $2,000,000,000, equal to half the debt of Great Britain; and that it would be utterly impossible to make loans on a specie basis fast enough to meet such enormous expenditures. At the last session, and after there had been a general suspension of specie payments by the banks and the Government, Congress authorized 287 the issue of $150,000,000 of legal tender notes; and by another law, passed a few months later in the session, an additional issue of $150,000,000 was also anthorized, but the Secretary was required to hold in reserve $50,000,000 to meet any calls that might be made for temporary deposits in the sub-Treasury. We all hoped that this would be all the legal tender notes that would be necessary. Congress also authorized the Secretary to borrow $500,000,000, payable in twenty years, and redeemable at the pleasure of the Government after five years, bearing interest at the rate of six per centum per annum, payable half-yearly in coin, and gave him authority to sell them at any time at the market price,' to raise money to carry on the war; and further authorized the holder of any legal tender notes to convert them at any time, at par, into these six per cent. bonds. The Secretary has paid out nearly $250,000,000 legal tender notes, being all that he was authorized to issue; and notwithstanding he has had authority for the last ten months to sell $500,000,000 of five-twenty six per cent. bonds, at the market price, he has only disposed of about $25,000,000, and has still authority to sell $475,000,000 at the market price, and take his pay for them in legal tender notes. One of the reasons why more of these bonds have not been disposed of is, that there has been no redundancy of currency, and it has been difficult for the Secretary to get legal tender notes on a sale of the bonds and seven-three-tenths notes that he has already negotiated. The War and Navy Departments have almost unlimited power to contract debts for the supply of the army and navy. The volume of supplies and supply trains for your army are enormously large; and extending over such a widely extended field of military operations as that in which our several army corps are engaged, no one can fail to see that it is next to impossible to estimate accurately the amount to be appropriated for a year in advance. But it is painfully certain, that with the present army in the field, there is no way of limiting the amount of expenditures when they are actively operating to put down so gigantic and desperate a rebellion. We know that the liquidated and funded debt is already large, and that there is a large accrued indebtedness, which ought to be paid at an early day, but without any adequate means in the Treasury to pay it. There is a large amount due to the soldiers that must be paid at the earliest moment possible. The soldiers now on the field of battle, or encamped in front of the enemy, enduring all the perils and hardships of war, many of whom have not received their pay for months, ought not to be put off any longer. They can hardly be expected to perform their duties with alacrity, unless they are promptly paid, especially when they know, as many of them do, that their families at home are suffering for the want of the means of life. It is an imperative necessity that the means for paying the army and navy should not be delayed any longer. If the Secretary cannot raise the money to pay the creditors of the Government by a loan oǹ five-twenty six per cent. bonds at the market price, other authority must be given him to raise the money, and Congress ought to confer that authority upon him as soon as possible. The time has arrived when our finances must engage the earnest and united attention of all loyal Representatives. We were in great peril last year, but our dangers are now two-fold what they were then. It was very difficult last year to provide the money to meet the large appropriations made for the support of the army and navy. It will be still more |