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scheme for establishing a system of National bank paper.
One of these was to drive home, by a tax, the State bank paper circulation, and the other was the funding of Government notes.
The
Secretary proposed a moderate tax on the State bank circulation; that no issue of Government notes beyond the limits authorized should be made, unless a clear public exigency should demand it; the organization of banking associations for the improvement of the public credit, and to supply the public with a safe and uniform currency; and the repeal of restrictions concerning the conversion of certain Government bonds.
To these propositions Congress responded, first by authorizing
an additional issue of $100,000,000 of Government notes; then by an act, approved on the 25th of February, to provide a National currency through a National banking system; then by another, approved on the last day of the session,
authorizing the
Secretary to issue $300,000,000 for the current fiscal year, and $600,000,000 for the next fiscal year, ending June 30, 1864.
These amounts were to be issued in “10-40” bonds, at six per cent. interest, both principal and interest to be paid in coin.
The
Secretary was authorized to exchange the same for certificates of indebtedness or deposit, any Treasury notes or lawful money of the
United States.
He was also authorized to issue $400,000,000 of six per cent. Treasury notes, payable within three years, to be a legal tender for their face value, excluding interest, and exchangeable for and redeemable by Government notes, for which purpose alone $150,000,000 of the latter was authorized.
He was given authority, also, to issue $150,000,000 Government notes, including the $100,000,000 authorized in January; also to issue $50,000,000 of fractional notes, in lieu of the postage and revenue stamps, for fractional currency.
He was also authorized to receive deposits of
gold coin and bullion, and to issue certificates therefor; and to issue certificates representing coin in the Treasury, in payment of interest, which, with the certificates of deposits issued, should not exceed twenty per cent. beyond the amount of coin and bullion in the Treasury.
A tax of one per cent. half-yearly was imposed on the circulation of the
State banks.
Such was one of the provisions of Congress, made early in 1864, for carrying on the war vigorously.
These acts concerning the finances were followed by an immediate revival of the public credit,
1 and within two months after the adjournment of Congress,
the whole mass of suspended requisitions had been satisfied, all current demands promptly met, and full provision made for the pay of the army and navy.
The Confederates, at the beginning of 1864, were sadly straitened, financially.
The fiscal agent of the Conspirators (
Memminger) reported their public debt, in round numbers, at $1,000,000,000, of which $800,000,000 were treasury notes, with a prospective increase, at the end of 1864, to about $2,510,000,000. The currency in circulation amounted to $600,000,000, and was so depreciated that the Conspirators could see nothing ahead but ruin,
