thereby facilitate the loan of that year, and prevent the necessity of applying in that and subsequent years the large sums which must otherwise be expended in the reimbursement and purchase of the public debt. An act for the purpose of effecting a conversion of the old six per cent. and deferred stocks, as recommended by the Secretary, was approved July 6, 1812. It provided that a subscription to the full amount of the old six per cent. and deferred stocks should be proposed to the proprietors thereof, for which purpose books were to be opened at the Treasury and the offices of the Commissioners of Loans on the 1st day of October next ensuing, to continue open until March 17, 1813, the fourteen last days of each quarter excepted. For such part of the amount of the old six per cent. and deferred stocks subscribed and surrendered as should remain unredeemed on the day of subscription the subscribers were to receive certificates of United States stocks, bearing interest of 6 per cent. per annum, payable quarterly, from the first day of the quarter in which the subscription was made. The certificates were to be reimbursable at the pleasure of the United States at any time after December 31, 1824; but no reimbursement was to be made except for the whole amount of stock standing at the time to the credit of any one proprietor, nor until after at least six months' public notice of the intended reimbursement. Nothing in the act was to be construed to alter, abridge, or impair the rights of those creditors of the United States who did not subscribe for the exchanged stock. Under this act $2,984,746.72 were subscribed in old six per cent. and deferred stocks, and exchanged for certificates of the new stock. The next effort in refunding was an abortive attempt in 1822 to exchange a stock bearing an interest of 5 per cent. for a part of the six and seven per cents due in the years 1825 and 1826. The stocks due and redeemable in those years amounted altogether to the sum of $39,819,700, a suin far beyond the capacity of the surplus revenues to meet; and the Secretary of the Treasury, W. H. Crawford, therefore proposed, in his report of December 21, 1821, to offer in exchange for $24,000,000 in these stocks a stock bearing a lower rate of interest and having a longer time to run. He said: "As the current value of the five per cent. stock created during the last and present years exceeds that of the seven per cent. stock, and of the six per cent. stocks of 1812 and 1813, it is presumed that the holders of these stocks will be disposed to exchange them for an equal amount of five per cent. stock, redeemable at such periods as to give full operation to the sinking fund as at present constituted. According to this view of the subject, twenty-four millions of the stocks which will be redeemable in the years 1825 and 1826 may be exchanged for five per cent. stock, redeemable, one third on the 1st of January, 1831, and one third on the same days of 1832 and 1833. This ex change of six per cent. stock, if effected on the 1st of January, 1823, will produce an annual reduction of the interest of the public debt, from that time to the first-mentioned period, of $240,000, and an aggregate saving through the whole period of $2,160,000. If the whole of the seven per cent. stock should be exchanged, the saving will be considerably increased." An act to authorize the issue of a five per cent. stock to be exchanged for those bearing an interest of 6 and 7 per cent. was approved April 20, 1822. It authorized the opening of a subscription to the amount of twelve millions of dollars of the seven per cent. stock and of the six per cent. stock of 1812, and for fourteen millions of six per cent. stocks of the years 1813, 1814, and 1815. For the six per cent. stocks of the years 1812, 1813, 1814, and 1815, subscribed and transferred to the United States, the subscribers were to receive certificates of United States stock bearing an interest of 5 per cent. payable quarterly, reimbursable one third at any time after December 31, 1830, one third at any time after December 31, 1831, and the remainder at any time after December 31, 1832. For the sums subscribed in the seven per cent. stock, certificates were to be issued bearing an interest of 5 per cent. payable quarterly, redeemable at the pleasure of the United States at any time after December 31, 1833. The funds pledged by law for the payment of the interest and principal of the stocks which might be subscribed or exchanged were to remain pledged to pay the interest and redeem the principal of the stock to be created under this act. The Commissioners of the Sinking Fund were to pay out of the said fund the interest which might become due on the stock, and to purchase the certificates from time to time as they purchased other evidences of the public debt; and so much of the fund as might be necessary was appropriated for the redemption, and was to continue appropriated until the whole of the stock created was reimbursed. Nothing in the act was to be construed to alter, abridge, or impair the rights of such public creditors as did not subscribe. This attempt to effect an exchange of stocks almost entirely failed, as only a very small sum was subscribed and exchanged for the five per cent. stock. The Secretary, in his report on the state of the finances for 1823, said that the entire amount exchanged under the act had been $56,704.77, as follows: Six per cent. stock of 1813 (first loan)..... $23.317 $2 In all..... 23,886 95 8,000 00 7.000 00 $56,704 77 The next refunding transactions occurred in 1824. The Secretary of the Treasury, W. H. Crawford, in his report to the Senate December 31, 1823, gave a very favorable view of the public finances, estimating the revenue of 1824. at $18,550,000, and the balance which would be in the Treasury January 1, 1825, at $9,792,716.41. He said: "Under existing laws there is no probability that any portion of the balance remaining in the Treasury on the 1st of January, 1824, or of the surplus which may accrue during that year, can be applied to the discharge of the public debt until the 1st of January, 1825; yet it is not deemed conducive to the general prosperity of the nation that so large an amount should be drawn from the hands of individuals and suffered to lie inactive in the vaults of the banks. On the other hand, the high rate of interest of the great amount of debt which becomes redeemable on the 1st of January, 1825, renders it inexpedient for the Government to apply to other objects any portions of the means which it may possess of making so advantageous a reimbursement. It is believed, however, that every inconvenience may be obviated if authority be given for the purchase of the seven per cent. stock, amounting to $8,610,000, during the year 1824, at such rates as may be consistent with the public intèrest. As it is now certain that the Government will possess ample means to redeem that stock on the 1st of January, 1825, it is presumed that the holders will be willing to dispose of it during the interval at a fair price; and as a gradual conversion of it into money, at such times and in such portions as would be most favorable to its reinvestment, would be most advantageous to the moneyed transactions of the community, it is presumed that it would be most acceptable to the holders." He therefore recommended that the Commissioners of the Sinking Fund should be authorized to purchase the seven per cent. stock during the ensuing year at the following rates above the principal of the sum purchased: 1. For all stock purchased before the 1st of April following, at a rate not exceeding $1.25 on every $100, in addition to the interest due on such stock on that day. 2. For all stock purchased between the first of April and the last of July, at a rate not exceeding 75 cents on every $100, in addition to the interest due on the last-mentioned day. He stated that of the $10,331,000 of six per cent. stock redeemable in 1825, about $5,000,000 would probably be redeemed in that year, and there would remain unredeemed, after the application of all the means at the disposal of the Commissioners of the Sinking Fund, about $5,331,000. This sum he thought might be readily exchanged for five per cent. stock redeemable in 1833, and he recommended that provision should be made by law for such an exchange of so much of the six per cent. stock as should not be redeemed during the year 1825. An act to authorize the exchange of certain stocks was approved May 26, 1824. It authorized the President to borrow on the credit of the United States, on or before April 1, 1825, a sum not exceeding five millions of dollars at a rate of interest not exceeding 43 per cent., and reimbursable at the pleasure of the Government at any time after December 81, 1831; the money borrowed to be applied, together with the money in the Treasury, to pay off and discharge such part of the six per cent. stock of the year 1812 as was redeemable after January 1, 1825. The Bank of the United States was to be allowed to lend the money or any part thereof, and the Secretary of the Treasury was authorized to raise the money by selling certificates of stock, not under par. Section 3 proposed a subscription to the amount of fifteen millions of dollars in the six per cent. stock of the year 1813, for which purpose books were to be opened at the Treasury and the several loan offices respectively, the subscription to be effected by a transfer to the United States of the credits standing to the subscribers on the books, and by a surrender of the certificates of stock subscribed. For the whole or any part of the sum so subscribed and transferred, certificates of stock were to be issued bearing an interest of 41 per cent., and reimbursable at the pleasure of the United States, one half at any time after December 31, 1832, and the remainder at any time after December 31, 1833. The same funds already pledged by law for the payment of the interest and the reimbursement of the principal of the six per cent. stocks of 1812 and 1813 was to remain pledged for the payment of the principal and interest of the stocks to be created under this act; and it was made the duty of the Commissioners of the Sinking Fund to cause to be applied annually such sums as might be necessary to discharge the interest. Nothing contained in the act was to be construed to impair the rights of such creditors of the United States as did not choose to subscribe to the loans. Under this act $5,000,000 were borrowed at par, and under section 3 of the act the sum of $4,454,727.94 was subscribed in six per cent. stock, and exchanged for stock bearing an interest of 4 per cent. Another attempt at refunding was made in 1825. Upon the convening of Congress in December, 1825, the amount of the public debt was stated to be $88,545,003.38, redeemable as follows: In 1825, of six per cents.. In 1826, of six per cents of 1813... In 1832, of four and a half per cents.. In 1834, of four and a half per cents. $7,654,570 98 19,002,856 62 18.001,487 68 9,490,099 10 18,901 59 5,000,000 00 1,018,000 72 6,654,153 72 18,901 59 1,654,158 73 4,785,296 80 7,000,000 00 18,296,281 45 By this statement it appears that, in the years 1829 and 1830, no part of the public debt was reimbursable excepting $7,000,000 five per cents and the three per cents; but, as these bore a less interest than that portion of the six per cents of 1813 which was redeemable on the 1st of January, 1826, and which, for the want of means, it was thought could not be reimbursed before the years 1829 and 1830, the Committee of Ways and Means believed it advisable to provide for that portion by a new stock, at a reduced rate of interest and payable at those periods. The committee therefore recommended a new loan, or an exchange to the amount of $12,000,000, at a rate of interest not exceeding 4 per cent., reimbursable in equal portions in the years 1829 and 1830. An act for this purpose was approved March 3, 1825. The first section authorized the President to borrow on the credit of the United States a sum not exceeding $12,000,000, at not exceeding 4 per cent. interest, $6,000,000 of the principal to be reimbursable at the pleasure of the Government at any time after December 31, 1828, and $6,000,000 at any time after December 31, 1829, the money borrowed to be applied to redeeming such part of the six per cent. stock as was reimbursable after January 1, 1826. The Bank of the United States was to be permitted to lend the sum or any part thereof, and the Secretary of the Treasury was authorized to raise the money by selling certificates of stock, not under par. Section 3 proposed a subscription to the amount of $12,000,000 of the six per cent. stock of the year 1813, all subscriptions in this stock to be counted as a part of the $12,000,000 authorized by the act to be borrowed. For the whole or any part of the sum subscribed in money or six per cents, certificates of stock were to be issued at not exceeding 4 per cent. interest, payable quarterly, and reimbursable as provided for in the first section. The same funds already pledged by law for the payment of the interest and the reimbursement of the principal of the stock which might be redeemed or exchanged, were to remain pledged for payment of the interest and the reimbursement of the principal of the stock created under this act. The low rate of interest offered made this loan a failure, as far as borrowing money was concerned, and the amount of stock exchanged under the act was comparatively small. The Secretary of the Treasury, in his report of December 22, 1825, says: "The proper measures were taken to execute this act, but have prevailed only to a limited extent. The operation of exchange, which was first resorted to, took effect to the amount of $1,585,138.88, and this sum, divided into equal parts, forms the two sums that now stand in the general table of the debt as redeemable in the years 1829 and 1830, while they have also served to diminish by so much the six per cent. stock of 1813. Proposals for the residue of the sum wanted were next issued, but no offers were received. The causes of the failure, it may be presumed, were the low rate of interest and short periods of redemption held out by the act, in conjunction with an activity in the commercial and manufacturing operations of the country affording higher inducements to the investment of capital." Under this act stock was issued in the amount of only $1,539,336.16. With these transactions the refunding operations of the Government closed, not to be renewed again for many years. The outstanding debt continued to be reduced by redemptions from the surplus revenues, until in 1836 it was practically extinguished. Subsequently, however, owing to insufficient revenues and the extraordinary expenses caused by the Mexican war, a new debt was incurred, amounting on June 30, 1861, to $90,580,873.72. The unprecedented expenses incurred in the war of secession, during the four years from 1861 to 1865, were partly met by the imposition of heavy taxes, but largely by the issue of loans bearing various rates of interest and having different periods to run. Some of the earlier loans were redeemed from the proceeds of loans subsequently issued. On August 31, 1865, when the debt reached its highest point, the interest-bearing debt was made up of loans bearing interest as follows: Total interest-bearing debt.... $2,381,580,294 98 Some of these bonds were paid off, and others were converted into the five-twenty consols of 1865, 1867, and 1868, bearing 6 per cent. interest. On March 18, 1869, Congress passed an act to strengthen the public credit, in which it is declared that "the faith of the United States is solemnly pledged to payment in coin or its equivalent of all its interest-bearing obligations, except in cases where the law authorizing their issue has expressly provided that the same may be paid in lawful money or other currency than gold and silver; but none of such interest-bearing obligations not already due should be redeemed or paid before maturity, unless at such, time United States notes should be convertible into coin at the option of the holder, or unless at such time bonds of the United States bearing a lower rate of interest than the bonds to be redeemed could be sold at par in coin." This act had the effect of improving the credit of the country, and, as it was believed that the outstanding debt might be refunded into bonds bearing a lower rate of interest, the matter was thoroughly discussed in the succeeding Congress, and an act for the purpose was approved July 14, 1870, entitled "An act to authorize the refunding of the national debt," of which the following is a copy: Be it enacted by the Senate and House of Represen tatives of the United States of America in Congress assembled, That the Secretary of the Treasury is hereby authorized to issue, in a sum or sums not exceed ing in the aggregate two hundred million dollars, coupon or registered bonds of the United States, in such form as he may prescribe, and of denominations of fifty dollars, or some multiple of that sum, redeem able in coin of the present standard value, at the pleasure of the United States, after ten years from the date of their issue, and bearing interest, payable semiannually in such coin at the rate of five per cent. per annum; also a sum or sums not exceeding in the aggregate three hundred million dollars of like bonds, the same in all respects, but payable at the pleasure of the United States after fifteen years from the date of their issue, and bearing interest at the rate of four and a half per cent. per annum; also a sum or sums not exceeding in the aggregate one thousand million dollars of like bonds, the same in all respects, but payable at the pleasure of the United States after thirty years from the date of their issue, and bearing interest at the rate of four per cent. per annum; all of which said several classes of bonds and the interest thereon shall be exempt from the payment of all taxes or duties of the United States, as well as from taxation in any form by or under State, municipal, or local authority; and the said bonds shall have set forth and expressed upon their face the above specified conditions, and shall, with their coupons, be made payable at the Treasury of the United States. But nothing in this act, or in any other law now in force, shall be construed to authorize any increase whatever of the bond ed debt of the United States. SECTION 2. And be it further enacted, That the Secretary of the Treasury is hereby authorized to sell and dispose of any of the bonds issued under this act, at not less than their par value for coin, and to apply the proceeds thereof to the redemption of any of the bonds of the United States outstanding, and known as fivetwenty bonds, at their par value, or he may exchange the same for such five-twenty bonds, par for par; but the bonds hereby authorized shall be used for no other purpose whatsoever. And a sum not exceeding one half of one per cent. of the bonds herein authorized is hereby appropriated to pay the expense of preparing, issuing, advertising, and disposing of the same. the particular bonds so selected at any time to be paid shall cease at the expiration of three months from the date of such notice. SEC. 4. And be it further enacted, That the Secretary of the Treasury is hereby authorized, with any coin of the Treasury of the United States which he may lawfully apply to such purpose, or which may be derived from the sale of any of the bonds, the issue of which is provided for in this act, to pay at par and cancel any six per cent. bonds of the United States of the kind known as five-twenty bonds, which have become or shall hereafter become redeemable by the terms of their issue. But the particular bonds so to be paid and canceled shall in all cases be indicated and specified by class, date, and number, in the order of their numbers and issue, beginning with the first numbered and issued, in public notice to be given by the Secretary of the Treasury; and in three months after the date of such public notice the interest on the bonds so selected and advertised to be paid shall cease. On January 20, 1871, an act was approved amending the above, as follows: tatives of the United States of America in Congress Be it enacted by the Senate and House of Represenassembled, That the amount of bonds authorized by the act approved July fourteen, eighteen hundred and seventy, entitled "An act to authorize the refunding of the national debt," to be issued bearing five per centum interest per annum, be, and the same is, increased to five hundred millions of dollars, and the interest of any portion of the bonds issued under said act, or this act, may, at the discretion of the Secretary Provided, however, That this act shall not be conof the Treasury, be made payable quarter-yearly: strued to authorize any increase of the total amount of bonds provided for by the act to which this act is an amendment. At that time there was considerable doubt of the bonds on the terms fixed by the law, as to the ability of the Government to sell any as the six per cent. bonds which bore interest in coin were still selling in the market at considerably below par. SEC. 3. And be it further enacted, That the payment of any of the bonds hereby authorized after the expiration of the said several terms of ten, fifteen, and thirty years, shall be made in amounts to be determined from time to time by the Secretary of the Treasury, at his discretion, the bonds so to be paid to be distinguished and described by the dates and numbers, beginning for each successive payment with the bonds of each class last dated and numbered; of the time of which intended payment or redemption the Secretary of the Treasury shall give public notice, and the interest on Statement showing the condition of the interest-bearing debt of the United States, as shown by the books of the Treasury Department, on the close of business, February 28, 1871. On February 28, 1871, the interest-bearing debt of the Government consisted of the following: |