previous next

The Federal Government loan.

At a meeting of bank officers, held at the American Exchange Bank, in New York, on Thursday, the 15th instant, at which thirty-nine banks of that city were represented, the following plan for assisting the United States Government was adopted:

  1. section 1. an immediate issue be made by the United States Treasury Department of Treasury notes, dated August 15, 1861, bearing interest from that date 7.30 per cent., to the extent of fifty millions of dollars.
  2. Sec. 2. the banks of New York, Boston and Philadelphia associated to take jointly this fifty millions at par, with the privilege of taking at par an additional fifty millions October 15, by giving their decision to the Department October 1; and also at par fifty millions December 15, by giving their decision December 1, unless said amount shall have been previously subscribed as a national loan. It being understood and agreed that no other Government stocks, bonds or Treasury notes (except Treasury notes payable on demand and the Oregon war loan) shall be negotiated or paid out by the Government until February 1, 1862, should the associates avail of both privileges, or until December 15, 1861, should they avail of the first only, or until October 15, 1861, if they take but the present fifty millions, except that the Government may negotiate in Europe, or through subscriptions to the national loan.
  3. Sec. 3. an appeal to the people for subscriptions to the national loan, to be made by the Government, and as the subscription for the notes progresses and the moneys are paid in, the same shall be paid over to the Government, or deposited with banks selected by the Secretary of the Treasury, with the concurrence of a Committee of the associates; and so much of the proceeds of said loan as shall be required for the purpose shall be applied in reimbursement of the associates for subscription by them paid in and not otherwise reimbursed. The Treasury notes issued to the associates, so far as the New York banks are concerned, shall be received by the loan Committee of New York banks at 90 per cent., as a basis for issuing clearing-house certificates to any bank desiring, under the existing arrangement, (which must necessarily be continued,) and the subscription of the banks shall be in the proportion of capital — except that the interest and proportion of no one institution shall exceed one-tenth of the whole fifty millions.
  4. Sec. 4. on the 1st of October, should the associates for any cause decide not to avail of the privilege of taking the second fifty millions, then the balance of notes remaining of the fifty millions already taken by them shall be apportioned and divided among them, (Prorate,) and they shall make payment for their respective proportions.
  5. Sec. 5. of the sums subscribed by the associates, ten per cent. Shall be paid forthwith to the assistant Treasurer at New York, Boston of Philadelphia, and the residue shall be placed to the credit of the United States on the books of the banks of subscribing. Certificates shall be issued to each subscriber, stating the amount so paid in and deposited; and as the deposits shall be withdrawn or paid into the Treasury, (which shall be, as nearly as may be, in proportion of the several subscriptions,) Treasury notes bearing 7.30 interest shall be issued in equal amounts to the subscribers respectively. And when the deposits shall be entirely paid to the United States, Treasury notes for the ten per. Cent. Originally paid shall also be issued, and all notes issued to such subscribers shall bear even date with the certificates, and carry interest from such date.
  6. Sec. 6. in part payment of deposits for the first fifty millions of dollars, the Treasury Department will receive from the associates any past due Treasury notes or 60 days Treasury notes. Should the second amount of fifty millions of dollars be taken by the associates, the Department will receive on account of deposits any Treasury notes outstanding except 7.30 per cent. Notes.
  7. Sec. 7. the transactions on the part of the associates may be conducted by a Committee in New York, in which the banks of Boston and Philadelphia should be represented, which Committee should meet daily for the direction of details, and at least weekly for deliberation and consideration of important business.
  8. Sec. 8. in addition to the banks of New York, Boston and Philadelphia, it would be desirable that other parties should become associates, say trust companies, savings banks, insurance companies and private bankers, who, in lieu of pro rata of capital, should designate when joining the association what amount of interest they decide to take.
  9. Sec. 9. the capital of the banks of New York, Boston and Philadelphia, and the respective proportions under a pro rata division would be as follows:

Bank CapitalPro rata proportion of fifty millions.
New York$70,000,000$29,500,000

It is proposed that the division should be say to New York $30,000,000, Boston $15,000,000, and Philadelphia $5,000,000.

Upon the subject of the loan the New York Daily News remarks:

‘ "The bank committee remained in session from 11 o'clock until late in the day, having a very stormy discussion; but it was understood that the loan would be arranged, since there is no help for it. The following prices to-day may help to illustrate the task undertaken by the banks:

Treasury notes, 12 per ct. interest.. 101½

Treasury notes, 10 per ct. interest.. 100

Treasury notes, new, 7.30 per ct. int.. 100 asked.

"The banks have, however, put their shoulders to the work, and may now be said to have the war upon their backs. They have put their hand to the plow, and there is no looking back. They have, in effect, become sponsors for the $50,000,000 of demand notes the Secretary is authorized to issue, and their resources to meet them is the money which belongs to their depositors, or the notes they have taken of the Secretary. In other words, the (in round numbers) $50,000,000 of specie held by the banks has become a bone of contention between the holders of Government notes and the depositors; or to state the matter in figures, the loans of the banks in the three cities are $194,326,834, mostly extended paper, in which there is no gold. The specie is $61,934,670, and their cash liabilities $142,682,172. Now, in addition to this, they have undertaken to pay the Government circulation of $50,000,000. The account stands thus:

Bank liabilities$142,682,172

‘"Now the question is who will draw the gold first--the Bank creditors or the Government creditors !"’

’ The New York Herald makes the loan an occasion for a castigation of Lincoln's Cabinet thus:

Now that our moneyed men have decided to furnish the sinews of war, it is their duty on behalf of themselves, the people and humanity the world over, to insist that the funds furnished by them shall not be wastefully spent on favorites and corrupt contractors around the War Department, or frittered away by sleepy, sluggish and imbecile officials in the Navy Bureau; but spent, as it is designed, in a vigorous prosecution of the war by land, and making the blockade so effectual that no vessel of the enemy can obtain ingress or egress from any harbor, bay, creek or inlet from the Chesapeake to the Rio Grande. They should demand of the President, as they have not only the right but the duty to do, that more honesty and energy should be infused in the War and Navy Departments, and men of talents and statesmanship placed at their head. The country has already lost enough through the imbecility of one Welles, at the head of the Navy Department.

We have been long enough disgraced in the eyes of the world, having twenty-two millions sustaining the Government, contending with less than eight millions, and at the same time sending out armies one-third of the numbers against us. The Secretary of War, in his message to Congress, stated that he had accepted three hundred and ten thousand troops and rejected as many more. Where are those troops ? They certainly were not at Big Bethel, nor has there been a large enough force at Fortress Monroe at any time to carry on the war in that section with vigor. General McDowell, when he was compelled to march on Manassas with his thirty-five thousand men, and there battle with three times his number, certainly did not have any such force as the Secretary of War would have us infer was at the command of the Government. The small numbers in the two positions referred to would lead us to look for them at the West; but if they are there, why was the gallant Lyon compelled to sacrifice his life at the head of a handful of men, fighting a force four times as great as his ?

The public insist that this game has been played long enough, and now call upon the President and his advisers to work for the country, and not the sacrifice of our commanders and brave soldiers fighting against three and four times their numbers. We have lone enough listened to the complaints of the treatment of the soldiers who have left home and offered themselves on the altars of their country, and now ask that men may be placed in the War Department who will no longer fawn upon favorites, while the gallant soldiers are kept without their pay, and treated more like brutes than men. We trust that our financiers will see that this change at least is made, upon which depends the success of our cause and the cause of freedom for all time to come.

The Herald's attempt to gloss over Federal defeats by attributing them to disparity of numbers is sheer nonsense. But a few weeks ago, the same mendacious sheet paraded the vastness of the ‘"grand army"’ in flaming capitals, and whenever a defeat took place it was attributed to nothing but ‘"masked batteries."’ Any intelligent reader can see through the cobweb texture of the Herald's assumptions at a glance. Those who know the facts, know that in every engagement in Virginia the Federalists have greatly outnumbered the Confederates.

The New York World (Abolition) says:

‘ The negotiation of the Government loans for $150,000,000, and the fact that Government finances and credits are now virtually under the control of the New York bank managers, have imparted more confidence to our capitalists and bankers than any event that has taken place since the commencement of our present political troubles. The evils of a shiftless or unsettled financial policy and the dread of depreciation in our currency from injudicious paper issues as money, are rendered improbable by the arrangement entered into by the Government and banks. The banks have done their part well since December to the present time, and will easily carry through their portion of the agreement, providing Government is equally thorough, consistent and prompt in the discharge of its duty.

’ The Baltimore Exchange remarks:

It is proclaimed to the world that the Government has obtained a loan of $50,000,000, with a conditional promise of $100,000,000 more. It is, however, carefully concealed from the public that the Government, in reality, receives but ten per cent. of this loan at the commencement, and the a large proportion of the balance will be absorbed in the payment of accommodation loans, which the credit of the Government absolutely requires should be promptly met. If there be any balance left, it will, in all probability, be deposited with a few banks, for the purpose of redeeming the small treasury notes payable on demand which it is agreed upon the Secretary shall be allowed to issue. Thus, Government will, in fact, get the pitiful sum of $5,000,000, while the banks and the capitalists, who have made loans to the Government, which were in very great danger of not being met, receive the whole of their money, which they are at once to reinvest in treasury notes — or, in a word, in the 73-10 Treasury notes for their present loan.

The Nashville (Tenn.) Union thus alludes to these Treasury notes:

‘ If the Government fails to redeem them, the banks can then refuse to receive them, and the suspense or loss will fall upon the holders. It would seem, therefore, that this proposition of the banks, when thoroughly examined, manifests anything else but confidence in the old Government. It is only an artful plan to shift the loan upon the shoulders of the masses, while the banks get the credit of assisting the Government.

After all, we are inclined to believe that the Lincoln Government, through its financier, Mr. Chase, has accomplished but little.--Nevertheless, it furnishes the Northern journals with a pretext to sound the war whoop more lustily, and for the present we may look for renewed activity among the leading bloodhounds at Washington.

Creative Commons License
This work is licensed under a Creative Commons Attribution-ShareAlike 3.0 United States License.

An XML version of this text is available for download, with the additional restriction that you offer Perseus any modifications you make. Perseus provides credit for all accepted changes, storing new additions in a versioning system.

hide Places (automatically extracted)

View a map of the most frequently mentioned places in this document.

Sort places alphabetically, as they appear on the page, by frequency
Click on a place to search for it in this document.
United States (United States) (1)
Fortress Monroe (Virginia, United States) (1)
Edgefield (Tennessee, United States) (1)
hide People (automatically extracted)
Sort people alphabetically, as they appear on the page, by frequency
Click on a person to search for him/her in this document.
Welles (1)
McDowell (1)
Abe Lincoln (1)
Chase (1)
hide Dates (automatically extracted)
hide Display Preferences
Greek Display:
Arabic Display:
View by Default:
Browse Bar: