Statement showing the amount of Notes and Fractional Silver Coin outstanding at the close of each fiscal year from 1860 to 1880 inclusive. Prepared at the Treasury Department, July 1, 1880. PART I. * restore the public credit, and maintain the national honor."— of public lands and duties on the large importations of foreign goods, which had helped A History of Democratic Admin- to swell the balance in the Treasury to over - of istration — Mismanagement Finances from 1836 to 1848A Constant Succession of Deficiencies and Issues of Treasury Notes and Bonds to Meet them -Growth of the Public Debt, etc. In contrast with the wise, honest, and brilliant financial history of the Republican party, it is only necessary to glance back at the blunders, if not crimes, of past Democratic administration from the days of Jackson down, to be convinced that the business man cannot trust the Democratic party. The following authentic review (comprising Parts I. and II.) was prepared at the U. S. Treasury: "Flush times" of 1836-The debt extinguished-Surplus in the Treasury. In the year 1836 the United States was, for the first time in the history of the country, practically out of debt. The Secretary of the Treasury, in his report to Congress, dated December 8, 1835, estimated the amount of the public debt still outstanding at $328 582.10, and this remained unpaid solely because its payment had not been demanded, ample funds to meet it having been deposited with the Bank of the United States as commissioner of loans during the preceding year. At the same time the estimates of the receipts and expenditures presented showed the probability of a surplus in the Treasury, at the close of the year 1836, of at least $14,000,000, and this estimate was really, as events showed, far below the truth. In this favorable state of the public finances Congress resolved to deposit all the surplus revenue over $5,000,000 with the several States, and provided the method by which it should be deposited in four instalments under the act approved June 23, 1836. Panic of 1837-Specie payments suspended -The wheels of Government almost blocked. In 1837, however, the condition of the country had changed. The "flush" times of 1835 and 1836 had been succeeded by unprecedented depression and panic. By the month of May most of the banks had suspended specie payments. The receipts from the sales $42,000,000, had fallen, off enormously. Even on the goods that were already imported it was exceedingly difficult to collect the duties at all, as the law required them to be paid in specie, and specie was hard to obtain; and it fourth instalment of the surplus at the end of had not only become impossible to pay the 1836 to the several States, but even to meet the current expenses of the Government from its ordinary revenues. A deficit of $2,000,000–Issue of $10,000,000 six-per-cent. Treasury notes-Greater economy proposed. Secretary Woodbury therefore suggested that contingent authority be given the President to issue Treasury notes bearing interest at six per cent. A bill for this purpose was introduced in the House of Representatives September 13, which, after a lengthened debate, passed that body, and, passing the Senate, became a law. The bill was supported on several grounds. One was that the issue of Treasury notes was absolutely necessary, there being already a deficit of $2,000,000, which promised to largely increase should the then condition of the country continue; and another was that so large an increase of the circulating medium would tend to alleviate the prevailing distress. The principle of the bill was opposed, however, by those who thought that greater economy in expenditures would tend to relieve the Treasury, while others denounced it as an attempt "to start a Treasury bank." The bill passed the House by a small majority, but in the Senate there were only six votes against it; and it was approved October 12, 1837. The President was authorized to cause the issue of Treasury notes in such sums as the exigencies of the Government might demand (not to exceed in the aggregate $10,000,000), of various denominations, not less than $50, redeemable one year after date, bearing interest from their respective dates for the term of one year at rates to be fixed by the Secretary of the Treasury, but not to exceed 6 per cent. They were to be issued in payment of debts due by the United States to such public creditors or other persons as chose to receive them in payment at their par value; were to be transferable by delivery and assignment indorsed on them, and were to be received in payment of all duties and taxes laid by the United States, for all public lands sold by the said authority, and of all debts by the United States; credit to be given for the interest due on the notes at the time of payment. The Secretary of the Treasury was authorized to borrow, on the credit on the notes, at not below par, such sums as the President might deem expedient. 1838——Unavailable balances-Conflicting statements—“ Government must stop in a few days" if not relieved. that, although the means of the Treasury for the whole year would probably be equal to the expenditures, yet the Department might, notwithstanding, be unable to meet the claims upon it when they fell due, because the largest proportion of the charges upon the Treasury, including the payment of pensions and the redemption of Treasury notes, became due in the early part of the year, while the resources on which it might otherwise rely would mostly be unavailable until the last due from banks, might not be punctually half of the year, and a portion, being debts paid. The state of the country and of the public finances was no more favorable at its close of the year 1837 than it had been at its beginThe act of March 31, 1840, was passed to ning. There was in the Treasury January 1, remedy this inconvenience, although stren1838, an apparent balance of over $34,000,000, uously opposed as unconstitutional and unbut of this amount the largest portion was unavailable. It consisted of the amount de-in session at one time for twenty-five hours necessary, the House of Representatives being posited with the several States, $28,101,644.97; on the bill. It renewed the provisions of the of money belonging to the Government de- act of October 12, 1837, except as to the posited with suspended or insolvent banks; amount of notes and the time in which they of amounts due from merchants or bonds might be issued; and authorized the issue of given for duties on imports, difficult or im- notes in lieu of those which had been or might possible to collect and of various other items be redeemed, but not to exceed, in the amount aggregating, so large an amount that the Sec- of notes outstanding at any one time, the sum retary of the Treasury estimated the available of $5,000,000 to be redeemed sooner than one balance at the close of the year at only year if the means of the Treasury would per$1,118 393. It is probable that even this esti- mit, by giving sixty days notice of those notes. mate was too large, as President Van Buren which the Department was ready to redeem; informed Congress in May, 1838, that the no interest to be allowed thereon after the exavailable means in the Treasury amounted to piration of the sixty days, the act to continue about $216,000, with large demands suspen-in force one year and no longer. ded in the departments awaiting payments from appropriations yet to be made by Congress, and that the Government must stop in a few days if provision was not made to carry it on. The dues to the Government being largely paid in the Treasury notes of 1837, which the Department was forbidden to reissue, the revenue was almost nothing and it became necessary to provide additional means. 1841 -"Embarrassed" again – Big deflciency!-In four years expenditures exceed revenue by over thirty millions-Again "relieved." Secretary Woodbury, in his report on the finances, dated December 7, 1840, estimated that at the close of the year 1841 there would remain in the Treasury an available balance of only $824,273, and that even this small Further relief given-Another issue of balance might entirely disappear and an actual deficit of several millions be found under the which was rapidly reducing the amount of operations of the compromise tariff act of 1833, customs duties levied, aided by fluctuations in the amount of goods imported, which had fallen off during the year 1840 nearly sixty millions of dollars. ficit the act of February 15, 1841, was passed, To ward off the danger of this possible dewith the limitations and provisions of the act of October 21, 1837, as modified by the act of March 31, 1840. President Tyler in his message to Congress, at its extra session in June, 1841, estimated the probable deficit in the Treasury at the close of the year at $11,406,132.98, while Secretary Ewing estimated the deficiency on the 1st of September at $5,251,388.30, and informed Congress that during the previous four years the expenditures had exceeded the revenue by $31,310,014.20. On this point he says: "Thus and to this extent, within the last four years were the expenditures pushed beyond the amount of in the Treasury and the outstanding debts due the the revenues. They were made to absorb the surplus United States, so that the Treasury was, on the 4th of March, 1841, exhausted of its means and subject to by issue and re-issue of treasury notes, etc. -"Loan bill of 1842." The only remedy for these continually recurring deficits was by a loan, redeemable at a time sufficiently distant to allow the public finances, aided by returning prosperity among the people, a chance for recovery. A bill to borrow $12 000,000, redeemable after eight years, was introduced in the House, June 14, 1841, and debated during many successive days. It was opposed by some who declared themselves averse to creating a national debt; by others who professed to see in it a scheme for starting a national bank, and by others who preferred the issue of treasury notes to obtaining a loan. It was advocated by members who said that it was not creating a debt, but funding one which already existed, entailed on the country by the Democratic administration which had just gone out of power, and that it was the more manly course to openly ask a loan, payable at some distant day, rather than to continue the issue of notes which must return to the treasury in a few weeks or months to cause another deficit. law, and an increase of the duties on certain classes of imports. An act authoriz.ng the issue and reissue of treasury notes was арproved January 31, 1842, after meeting with inuch opposition on the old grounds of the unconstitutionality of bills of credit, the inexpediency of adding to the paper money of the country, and the plea that a little economy would enable the Government to meet its expenses without causing a deficit in the treasury. Its supporters denied that the that the best way to provide for the deficiency measure was unconstitutional, and admitted that if a loan bill was passed the money could would be by obtaining a loan, but asserted not be obtained in this country, and that it would be necessary to send the bonds to Europe for sale, which would consume much time, while the needs of the treasury were urgent. The act authorized the notes to be issued under the provisions and limitations contained in the act of October 12, 1837, except that the authority given to issue was to expire at the end of one year from the passage of the act. It was manifest, however, that the power to keep $5,000,000 in treasury notes outstanding could not make up a deficiency of over $14,000,000; and in order to provide for this deficit, a bill had been introduced in the House, December 21, 1841, extending the time limited by the first section of the act of July 21, 1841. In the debates which followed the responsibility for the condition of the finances was charged by each party on the other. This bill became a law April 15, 1842. It The bill finally passed both houses, and provided that so much of the loan obtained was approved July 21, 1841. It authorized after its passage should be reimbursable as the President to borrow, on the credit of the should be agreed upon at the time of issuing United States, at any time within one year, a the stock not to exceed twenty years from the sum not exceeding $12,00,000, at a rate of in- first day of January, 1843. The Secretary of terest not exceeding 6 per cent., payable quar- the Treasury was authorized to dispose of the terly or semi-annually, the loan to be reim-stock below par if its par value could not be bursable either at the will of the Secretary of the treasury after six months' rotice, or at any time after three years, from January 1, 1842. The money borrowed was to be applied to the redemption of outstanding treasury notes, and to defray the public expenses. The Secretary was authorized to purchase at any time before the time named for the redemption of the stock such portions thereof as the funds of the Government might admit of, and any surplus in the Treasury was pledged for the redemption of the stock. This loan does not appear to have met with much favor from those who had money to lend, owing to the unsettled state of the money market, and the short period which was to elapse before it became redeemable. Up to December 20, 1841, the amount received was only $5,532,726.88; while the estimated deficiency on January 1, 1842, was $627,559.90, and the estimated excess of expenditure over the revenue for the year 1842 was $14,218,570.68. In this emergency Secretary Forward recommended an extension of the time within which the residue of the loan not yet taken should be redeemable, the reissue of the treasury notes heretofore authorized by obtained, but not until the loan had been duly advertised and proposals for subscriptions invited. The President was also authorized to borrow an additional sum of $5,000,000 if the exigencies of the Government should require it, under the same provisions and limitations More relief-Another re-issue of treasury notes in 1842. Notwithstanding the favorable terms offered to investors it was still found impossible to obtain par for the stock; and to prevent its sacrifice a bill was introduced in the House to allow the issue of treasury notes when the remainder of the stock could not be sold at par. It was stated in debate by the Chairman of the Committee of Ways and Means, who introduced the bill, that the immediate liabilities of the Government were $4,875,000, and to meet these demands not one dollar was available, and that the stock must be either. "sacrificed to the Shylocks of the country" or some other means must be provided to meet these liabilities. The bill does not appear to have met with much opposition, the necessity for its passage being apparent. It was approved August 31, 1842. It provided that no stock authorized by | On the 15th of June Secretary Walker inthe act of July 21, 1841, and April 15, 1842, should hereafter be sold at less than par, and in case the stock could not be sold at or above par, and the exigencies of the public service should require it, the Secretary of the Treasury was authorized to issue in lieu thereof treasury notes to the amount of not more than $6,000,000 under the provisions and limitations contained in the acts of October, 1837, and March, 1840. The notes when redeemed might be reissued or new notes issued in their stead, but none were to be issued after April 15, 1843, and the amount outstanding at any one time was not to exceed $6,000.000. The treasury notes issued under the act of March 3, 1843, were simply issues of new notes in place of such as had been issued under any previous acts of Congress, and which had been or might be redeemed at the Treasury, or received in payment of dues. The necessity for the issue was in the fact that the estimated revenues for the year were very little in excess of the current expenses. formed Congress that if the war should continue till July 1, 1847, there would be a deficiency in the Treasury of $12,587,000. To prevent this threatened disaster a bill was introduced in the House of Representatives July 6, 1846, and passed both Houses, although opposed on the ground that the only honorable way of providing for the increased expenses necessary while the war lasted was by increased taxation: that the feature of the bill, which allowed the reissue of treasury notes as fast as they were redeemed, was converting the treasury into a national bank, and that the course of legislation showed the inconsistency of the Democratic party, then in power, which had originated the Sub-Treasury bill, requiring payments to or by the Government to be made in gold or silver, and was now asking authority to issue paper money, after having at the outbreak of the war, so reduced the tariff that the revenue was likely to be lowered at least $10,000,000. The bill was approved July 22, 1846. It authorized the issue of treasury notes according to the exigency of the Government, and in place of the notes redeemed others were to be issued; but the amount of this emission outstanding at any one time was not to exceed $10,000,000. The notes were to be issued under the limitations and provisions of the stock to be issued under the limitations and 1843-A growing national debt-A new loan and new issue of treasury notes. The National debt at that date was said to be $27,409,338, of which $11,068,977 fell due during the year, and might be presented for payment. Under these circumstances it became necessary either to obtain a new loan, to increase the taxes-always an unpopular expedient-or to issue new Treasury notes, as had been done at each session for the past six years. The course was adopted of giving authority both to obtain a new loan and to issue treasury notes, though this latter expedient was characterized in debate as a mere makeshift to enable the Government to get along from day to day and to maintain its credit without repudiation. The bill was approved March 3, 1843. It provided that when any outstanding treasury notes, issued under previous acts of Congress, should, after the passage of the act, be redeemed, the Secretary of the Treasury, if the public service required it, might cause other notes to be issued in their stead, under the limitations and provisions of the acts under which the notes were originally issued. It authorized the payment of interest on notes issued under this act after maturity, and also on those issued under the act of August 31, 1842. The third section of the same act authorized the President, if, in his opinion, it should be for the interest of the United States so to do, to redeem such of the notes then outstanding as they became due by the issue of stock of the United States, under the limitations and provisions of the act of April 15, 1842, except that no commissions were to be allowed to agents, and the stock should be redeemable at a period not later than ten years from the issue thereof. Under this act stock to the amount of $7,004,231.25 was issued, most of which was sold at a small premium. 1846-The Mexican war begins-Large to so amend the tariff on foreign goods imthreatening deficiency · More treasury ported as to increase the revenue, especially notes issued. to lay a heavy duty on tea and coffee. War with Mexico was declared May 13, 1846. The estimate of Secretary Walker, before referred to, proved very fallacious. A sum larger than his estimate of the amount needed to prevent a deficit was obtained; yet in his annual report, dated December 9, 1846, the Secretary was obliged to inform Congress that a deficit of $4,779,042.01 was still probable. In January, 1847, he appears to have informed the Chairman of Ways and Means that the treasury was nearly empty, and that there was an immediate necessity for authority to issue more treasury notes or to obtain a new loan. A bill authorizing the issue of new treasury notes or a loan to the amount of $3,000,000 passed both Houses and became a law January 28, 1847; but the origin and conduct of the war with Mexico had been reviewed in debate, and various propositions were made It authorized the President to cause treas |