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[694] financial point of view, and provide for the support of those volunteers by an additional issue of treasury notes, the negotiation of a new loan, and by taking the real sources of wealth in the country in order to secure the means for guaranteeing the interest on this loan, so as to be able to dispose of the shares. Such was the triple object of the law proposed to Congress in the course of July, and promulgated on the 19th of August, 1861.

This law authorized the issue of one hundred millions in treasury notes bearing no interest, and redeemable only after the conclusion of peace; they did not vary from those already in circulation, except upon one point, they were redeemable at six months after the close of the war, and not at two years—an advantage which must have looked like cruel irony to those who after the war found themselves in possession of this worthless paper. The smallest denomination was of five dollars. The notes issued in virtue of the law of April 16th were accounted part of these one hundred millions. The paper thus created was receivable in payment of all taxes, with the exception of the duties on the exportation of cotton.

The new loan, like its predecessors, was issued in the form of government bonds bearing eight per cent. interest, redeemable at the end of twenty years at the latest, the government being privileged to dispose of it as it thought proper. The law of August 19th fixed the total amount of bonds to be issued at a par value of one hundred millions; and as thirty millions had previously been voted, this loan added seventy millions to the public debt. But the clause accounting the previous issues part of the one hundred million loan authorized by this law was soon repealed, so as to enable the government to place new bonds in the market to an amount covering this entire sum. In order to facilitate the disposal of these bonds, it was stipulated, on one hand, that they should be convertible at par into new treasury notes, and, on the other hand, that they should be received in payment of debts contracted by the government. The effect of the first of these two clauses, called the funding clause, was to withdraw from circulation a certain number of notes; it will be seen presently that the most arbitrary measures were resorted to in order to facilitate the operation. The second was a disguised expedient

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