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 at the same date the bills of banking-houses and of private institutions were equivalent to one hundred and forty millions, while those of the Federal treasury only represented thirty millions. But the anticipation of an increase of paper money was sufficient to disturb the market, and to bring about the crisis, which was hastened by the consummation of the agreement entered into between the government and the banks. The latter, in fact, having had to pour into the treasury the equivalent of the one hundred and forty-six millions of bonds and scrip subscribed to by them within the space of three months, found themselves short of coin, and on the 31st of December, 1861, suspended specie payments. In consequence of this, there was such a demand for the redemption of the Federal notes, that in spite of the law, the treasury department was obliged to close its doors against those holding them. The latter then took them to the banks, offering them as collaterals for specie they desired to borrow; but the deposits increased so rapidly, and the banks had already such an excess of government paper on hand, that on the 8th of February they refused to continue this kind of loan. This was another blow struck at the government notes. In order to counteract the effect of this blow and to facilitate the circulation of its own paper, the government became itself a lender, receiving its own notes as collaterals, and exchanging them for certificates of deposit, payable ten days after date, with four per cent. interest if the depositor was a private individual, and five per cent. if a banking-house. So that the creditors, being paid in treasury notes, took them to the banks, which exchanged them for certificates, returning the same notes to the treasury, where they underwent again the same process. These measures, however, were mere palliatives. The chambers of commerce strenuously demanded the full value of the greenbacks; Congress had just empowered the government to issue ten millions more of these treasury notes, to provide for its most immediate wants, which increased the amount in circulation to sixty millions. It was under these circumstances that Congress examined the financial projects prepared by Mr. Chase. The discussion in both houses was long and stormy; at last the act of
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