The New York Herald Newspaper, May 22, 1865, Page 2

* a) STATES. FINANCES. 1813 To 1825. THE MONETARY STRESS OF THE COUNTRY ‘Tho Financial System Inaugurated by Albert ; Gallatii, Secrotary of the Treasury in 1812. Struggle to Establish a New “National Bank. THE DEBT WHICH THE WAR ENTA'LED WANT OF A NATIONAL CURRENCY ‘War Between the Banks and ‘ the People. GREAT SUFFERING AMONG MERCHANTS tee Qur Monetary Matters Finally ") Straightened. WEN COUNTRY PROSPEROUS, Lo CONDITION OF THE COUNTRY IW 1812. Ab dhe commencement of the year 1812, just pre- views to the breaking out of the second war with Great Britain, the finances and comm: stand- be justly tion was in course of gradual liquidation, with the pros pect of soon becoming. extinguished; the civil expenses of the government were comparatively light; the burden of tazation wes no longer felt; trado flourished, com- meres progressed and expanded, and a bright future pre- neuted tteelf, But the approaching diMoulties with the mother country soon began to atiract the attention of ‘the peoplo, and in a short time the overbearing spirit which manifested itself on the other side of tho water gave unmistakable evidence that war was inevitable, and hostilities were finally announced as existing by a procia- mation from Président Madison, issued on the 19th of Jane, 1812. THE'WAR AND THE FIRST LOAN IN ANZICIPATION . oF IT. * y he war had been anticipated by Congress, and conse- quently, on tle'14th of March preceding, # loan of eleven millions of dollars was authorized. It bore six per cent Anterest, payableevery three months,and the prinotpal to be redecmed atthe convenience of the government, after 1824. The books for receiving subscriptions to the loan wore duly opéned on the first and second days of May, 1812,,at Portsmduth, N. H. ; Boston, Mass. ; Providence, R. Lj Hartford, Conn. ; city of Now York; Phitadelphia, Pa; Baltimore, Md,;. Washington, D. ©, ; Richmond, Va, apd Charleston, 3. C. The subscribers, according to theterms made known by Albert Gallatin, who was then of the Treasury, were to pay the amount of their subsoriptions in eight instalments, twelve and a half dol- tars on each one hundred dollars t6 be paid at the time of wubsoribing, and a similar amount on the 15th day of each of the months of June, July, August, September, October, November and December succeeding, the sub- sotibers to receive, on making the last payment, certti- cates; of funded capital stock of the denominations of $190;°$400, $1,000, $4,000 and $10,000, The spirit and patriotiam of at least the moneyed portion of the people had net become fairly aroused, and .when tho books closed it'was found that but little over half of tho Joan been taken. war was rapidly approaching, and as eight mil- lions of the loan was appropriated by the law authorizing tt to the payment of the interest and redemption of the prinoipal of the then existing debt, and with only three and a balf millions in the treasury, the financia! prospect was for a short time clouded. About six millions had been subscribed, less than ono-third of which amount was takon by the people. HB FIRST 1S8UE OF TREASURY NOTES. In view of this fact the Secretary of the Treasury recommended the passage of an act authorizing the Issue of one year troasury notes, and Congress accordingly, on the BOtH of Junc, 1812, granted the necessary power for that purpose. The notes bore intorest at the rate of five and two-Ofths per cent, which was one and one-half cent per day on each hundred dollars. They were not legal ten- dors, but wi receivable for all dues to the United States, @uties, taxes and for the purchase of public lands): » were many who distrusted this findzital stoke of Mr. Gallatin, and who contended that the, aotes would ulgimately become az worthiess ag the old continental money; but such predictions were soon } faldified, as ‘they were frecly token at par, with the in. terest added as it. accumulated, until they found their way into the and were by those institution: retained ta the extent of their ability to do so. ANOTHER LOAN—BETTRR SUCCESS. Hoatiliti¢s tikd now commenced, and the Mabilities of »thegovernment began toaccumuiate. In January, 1813, poem retary the Secretary to borrow an addi- ‘oe ‘millions of dollars on six per cent bas swae the largest loan ever yet asked by the’ Uiited States ‘at one time, and although it wad lopked upon as being enormous, the people had become fully aroused to the necessity of supporting the government. The proposals issued from the Treasury Department stipulated that tho subscribers were privileged to tako the loan or any portion of it at a nominal discount of twelve per cent, or, in other words, to pay eighty-cight dollars ip coin for each one hundred dollars of stock, or to take the stock nt par at six per cent interest, with an annuity of one anda half per cent added for, thirteen years, after which the stock to beer only the original six per cont intercst. Tho books were opened on the 12th of March, 1813, and by the 20th of April, she time including only thirty-three business days, the loan was absorbed. Joh Jacob ‘Astor, of this city, took two millions, and Stephen Girard and Mr, Parish, of Philadelphia—the former a Frenchman by birth, and tho latter an English- man—took two millions for themselves and five millions for thoir friends. THE THIRD LOAN AND A DIRECT TAX UPON THB STATES. Thooxpenses of the war continued to increase to such an extent that another loan was rendered necessary, and Congress, om the 2d of August following, pamed a law authorizing the Secretary to issue proposals for seven ‘end a half millions on the same terms upon which the Preceding loan was negotiated, and a direct tax was about the sane time levied upon the States, then eighteen in number, for three millions more. Proposals for the last mentioned loan of seven and a half millions were advertised for until the 28d of September, 1813, upon the following torma :— ‘Tho stock to be issued for the money (specie) loaned to (bear am interest of six percent per annum, paya- ble quarter yearly, and the proposals to distinctly state theamount of money offered to be loaned, and the rate at whith the aforesaid stock would be rcceived for the same: The amount loaned to be paid into a bank or banks athorized by the Treasury, in instalments, in the eighih part, or tweive dollars and fifty cents ogeech hundred dollars, on the 16th day part on the 16th day of November; or -five dollars, on each one hun: jred dollars on the day of cach of the ensuing months of December, January and February. The funded stock to be issued to be irredeomable till the slet of December, 1825, to pe transferable in the same man- ner as the other fu stock of the United States, and to be charged for the regular and quarterly payment of ita prin upon the annual fund of eight millions * dot! le psy uy for the payment of the principal an interest of the debt of the United States. At the time specified the bids we ned, and it was found that over twelve and a half millions of dollars had boen offered, Tho best terms wore accepted, which wore oighty-cight dollars and twenty-five conts in coin for each one hundred dollars of tock MR, GALLATIN'S FINANCIAL PLAN. Tt may be here montioned that the Anancial plan of Mr. ‘expenses of the peace establishment, in which was in- cluded amaanaal payment of the interest and prin of the old debt, and to defray the extraordimary expenses of the ‘| war out of the proceeds of loans to be obtained for that purpose. AMOUNT BORROWED DURING THE FIRST YEAR OF THe WAR. The monoys received from loans the fiscal year ending September 30, 1813, were as follows: Eleven millions loan of March 4, 1812. Sixtoon millions loan of February 8, 18 TreASULY BOOB. o.oscereenees> TORR vsosecanenasmsasens ++ + $23,976,912 MANIA FOR BANKING CAPITAL. In 1813 tho banking capltal of the country amounted ‘to about $75,000,000, and that of tho State of New York to $20,850,000, ef which $14,850,000 was m the city of New York. Tho circulation, including the Treasury notes, was estimated at between seventy-five and one hundred millions, During tho lattor part of the year 1813 mania sprang up for increased banking capital, and notices were published of intended applications to the Logislature of the State of New York at its seasida which was to commenco on the Ist of Janu- ary, 1814, for eighteen or twenty new moneyed institu tious, with an aggregate capital of nearly sixteen mil- lions of dollars, over half of which was forthe city of New York. Among the new banks which at that timo sought the sanction of the Legislature to commence ope- rations were the Grocers’ Bank and the North River Bank of this city. THE .FOURTH LOAN. On the 10th of March, 1813, Congress passed another loan bill’ for $25,000,000, which was divided into parcels. The Qrst call under it was for ten millions, upon the same terms asthe previous loans. Fourteen millions were subscribed; but the prescribed amount only was taken, five millions of which was allowed to Jacob Barker, of this city, he having proposed to take | thatamount. In July of the same year the Secretary of the Treasury gave notice that six millions more of the twenty-five millions loan were wanting, which was.to be paid by the takers in four instalments on the tenth day of each of the last four months of the year. CONFIDENOS BEGINS TO WBAKEN—SUSPENGION OF SPECIE PAYMENTS. The financial machinery of the government, owing to the rapidity, with which the various loans were placed “upon the market, was now. fast becoming complicated, and the monetary affairs of the country generally throatened to collapse, The banks had suspended specie payments; gold was selling for the best of English bills at cight per cont premium, and Trea- sury notes would no longer pass current. CHANGES IN THE TREASURY DEPARTMENT. Albert Gallatin, who had held the office of Seoretary of the Treasury for nearly twelve years, Kad been commissioned by President Madi- son, much against the wishes of Congress, one of the Special Envoys to Gottenberg to megotiate a peace under the mediation of Alexander of Russia, and the department was left in charge of Mr. William Jones, as Acting Secretary. On tho Oth of February, 1814, the sppointment of Secretary was conferred upon George W. Campbell, of Tennessee, who, aftor eight months of service, gave way to Alexanacr James Dallas, of Ponn- sylvania, who continued in the office until near the close of President Madison’s term. These frequent changes in tho Treasury Department had «iso a depressing effect, and, to make matters worse, the anti-war party became loud in their denunciations of the administration, and the oppo- sition members of Congress attacked in every conceiv- able form the financial policy of the government, Specu- Intors in cotton and tobacco, tea and coffee, and bread- ‘stuffs and provisions, were as grasping then as they are known to be now, and the cntire tride of the country: was fast running into disarrangement. DIFFICULTY IN NEGOTIATING THE LAST LOAN. ‘The last offer of aix millions of government stock.could not be negotiated, and European capitalists were appealed. to to extricate the Treasury from its embarragsment, But, as roatters were rapidly drifting from bad to worse, the President found it necossary to call a meeting of Congress, on tie 19th of October, 1814—neurly two months before the constitutional time for the commencement of the reg- ular session, The state of the Treasury immediately commanded the attention of both houses, On the 2d of December Mr, Dallas, the Secretary of the Treasury, in a letter to Congress, said;— I have never been disposed to disguise the em- barrassments of the Treasury. A frank and full develop- ment of existing evils will always, Lhope, bo best cal- culated to secure the attention and exertion of the public authorities; and, with legislative aid, I am still conti. deut that all the difficulties of a deficient revenue, a suspendod cireulating mediim @ depressed credit may be spoodily and completely overcome. My only apprehension arises from @ lapse of tm», aaa remedy which woald be effectual to-day will perhaps only serve ty increase the disorder to-morrow. TREASURY! NOTES AGAIN RESORTED TO—TAX BILL PASSED, Congress at its previous session had passed anotber—the fifth—Joan biil for three millions, and this It was proposed, with seven anda half millions that remained unnogo- tiated of tha twenty-five millions loan, to trans er from stock ‘nto Treasury notes to mart the pressing demands upon the Treasury and thereby afford temporary relief. Hon. John W. Eppes, of Virginia, who was chairman of the Committee of Way? and Means ip the House of Rep rosentatives, was unremitting in his exertions to sustain the government credit, and the principa! meusures that wore adopted during the oarly part of the cession were the resdlis of his labor. An enlarged tax bill wae introduced, which embraced all th principal articl’s of consumption, and @ proposition was made on the: 30th of September, 1914, to altor the const’ tution so that Congress stiould have power to establish apother navonai bank. As State bank notes could not be made available by the Treasury, those of one Stato not passing current in another, the polley “of issuing Treasury notes was found to b> the Only mode left to the government upon which to transact its business. The public debt, which at the beginning of the year 1813 was about fifty-four mil- lions, had now reached the proportions of one hundred millions, which enormous smount, as it then appeared, having essentially weakened the confidence of the peo- ple, all ideas of further loans during the war were for the time abandoned, RESTORATION OF PEACE—PANIU AMONG MERCHANTS. The treaty of peace, which had been signed at Ghent, on the 24th of December, 1814, reached this country on the 11th of February, 1816, This had the effect of partial- ly restoring confidence in the government credit, but the accumulated expenses entailed by the war had still to be provided for, and its ability to meet its obMyntions re- moained somewhat in distrust On the aanouncement of peace the reaction in prices caused the greatest alarm, and its effect was severely felt throughout all the ramifi cations of trade, Sugar, which had beon selling at twen. ty-six cents per pound follto twelve and # half; tea, which sold at two dollars and fifty cents on the day pre. vious to the arrival of the news, was purchased for one dollar; and @ corresponding reduction took place in almost every oth@r commodity. Specie, which had risen to twenty-two percent premium, in the panto which ensued fell to two per cont, Government stocks rose from seventy-six to elghty-eight, and treasury notes from ninoty-two to ninety-eight. All this change took place between Saturday, February 11, 1815, and the succeeding Monday. As 4 natural consequence a wide-spread devasta- tion among merchants followed such a sudden collapse in prices, and thousands of the trades people were forced into bankruptey. MOR TREASURY NOTES. On the 224 of February, 1815, another Treasury note Dill was passed, for twenty-five millions. The notes of a Jose denomination than one hundred dollars, under the provisions of this bill, were to be fundable at seven per cent, and those of denominations over one hundred dol- lars to bear an interest of five and two-fifths per cent, and to be fundable at six per cent. A NEW NATIONAL BANE. ‘The proposed establishment of a new national bank now commenced to attract attention in financial and commercial circles, Tt was first brought into the House of Reprosentatives by Hon. John @. Jackson, of Vir- ginia, on the 90th of September, 1814, at the suggestion of Alexander J. Dallas, who had jast been appointed Seoretary of the Treasury. ‘The cetablishment of such an inatitution was part of the financial policy of the new Secretary, and in a letter to Congress, dated October 14, 1914, he recommended that it be incorporated for a term of twenty years, to be Jocated In Philadelphia, with power to erect offices of dis- count and deposit elsewhere, upon the fuowias Wales clplos:— That the capital of the bank shall be fifty mijlions of dollara, to. be divided into one hundred thousand shares, of five handred dollars éach, Threo-ffths of the capital, boing #ixty thousand shares, amounting to thirty mil- lions of dollars, to be subseribed by corporations, oom- panies or individuals; and two-Aftis of the capital, be- ing forty thourand shares, amounting to twonty millions Gallatin, Adopted at tho commencement of the war, was © wake (ue revenue Of the Koverument oqual to the of dollars, to be subsoribed by the United States, ‘That the aubscriptions of corporations, companieg and, smilliens for the | Silver. milli e interost of six ions at an aud in euch gums as should be found’ mutually conve- nient. That no part of the public stock constituting a portion of the capital should be sold for leas than par without the consent of Consress. That the capital of the bank, its notes, deposits, divi- donds or profits should not bo subject’ to taxation by the United States or by any individual State. ‘That no other bank should be established by Congres during tho term for wh ch the national bank*was to be incorporated, 4 ‘Phat tho bank should be ager! by fifteen directors being resident citizens of the United” States and stock holders. ‘The Prosident of the United ®tates to annually name five directors, and desigrat> ono of* the five to b» tho President of the bank. The other directors to b> annually chosen by the qualifled stockholders in person or by proxy, if resident within the United States, voting upon a seale graduated according to the number of shares respectively held. Tho necessity of such an institution at the timo, hav- ing in view solely the relief of the government finances and the establishment of a uniform currency, could hardly be questioned. As will be seen according to tho plan, here proposed, twenty-four millions of government liabilities were to be swept from the market, which it would be natural to suppose would have a tendetity to raise the government credit, and thirty millions were from tim? to time to be loaned to meet the pressing ne- cessities of the Treasury. The following resolution wag introduced in the House on the 28th of October, 1814:— Resolved, That it is expedient to establish a national bank with branches in the several States. | Which was passed by a vote of ninety-throe tp fifty- four. Among those voting in the affirmative wore Daniel ‘Webster, who was then a representative from New Hamp- . shire, and John C; Calhoun, of South Carolina. “ome of the members voting in tho negative wore induced to. do 80 by doubts of the constitutionality of the measure. On the 7th, of November, 1814, a bill for the ostablish- ment of a national bank was formally introduced by the Hon. Jonathan Fisk, of New York. The provisions of the act did not vary materially from the plan recom- mended by the Secretary of the Treasury, except that it “prohibited the bank from engaging in mercantile speca- lations, and from loaning the government, ‘at any time, more than three hundred thousand dollars, and from foaning any particular State more than fifty thousand dollars, or granting money for the use of any foreign power, without the express authority of law. The notes were made receivable in all payments to the United States, and power was gives to the President to order tho suspension of coin payments if at any time an undue pressare for specie was made upon the bank either for exportation or with &@ Binister design to injure the institution. When the Dill came before the House on the Lith of No- vember, Mr. Calhoun proposed to change many of its features, He contended that one-tenth of the capital stock should be paid in specie, that the shares should be one hundred dollars each instead of five hundred, that the United States government should hold no stock nor’ any Agency in its disposal, nor control over its opera- tions, nor right to order the suspension of specie pay- ments, and the bank not to be compelled to make any loans to the government. There were numerous conilict- ing opinions upon the various provisions of the bill, to get rid of which the House decided to refer it, with all tho proposed amendments, to a select committee; but the committee were no more capable of settling the dif- ferences than the House, and they therefdve returned the bill in the sane shapethat they received it. There was no way left then for the House to untangle the snarl into which the:bill had’babome twistedbut ‘to reject it; and apcordingly on the 28th of November, 1814, a third reading was refused by a yote of 107 to 45. The’ Sonate’ subse- quently took jt up and passed it, and sent it to the House for concurrence on the 10th of December. On the 20th’ of that month the bill came up for a third Teading, and that day's sossion was represented as being the most boisterous of any that had oceuredsfor | many years. The bill was attacked with the most deter: | mined zeal by those who were opposed to its passage, ‘and beset with.every obstacle that could be thrown in its way, On the second of January, 1816, 9 vote was taken on {ti final passage, which resulted eighty-one ia favor of and oighty against... Hon. Langdon Cheves, of South Carolina, Speaker pro tem. in the absonce of Henry Clay, who had been sent to Europe ag one of the peace com- missionors, announced that, ag under the rules of the House he was entitled to vote, he should record his vote in the negative. This madé@ a tie, and the bill was ac- cordingly, under parliamentary rule, declared rejected. On the following dav—January 34—tho vote was recon siderod, and tho bill was again given to a solect commit- tee, which reported It buck to the House on the 6th with @ number of amendments, which were adopted, the most material of which were, reducing the capital stock from fifty to thirty millions, such capital to be composed of five millions of spect», fifteen millions in Treasuty notes and .en millions in the war stock of the United States, and th» share? to be one hundrt dollars each instead of five aundred. Tho noxt day the bill passed by 4 vote o 220 0 98, The Howse having <ricken out the provision granting power to the Pre-ident of the Un tad’Sto'ss to order a suepans.on of specie payments in certain cases, the Sonate omle-wored to have it rem.) st aud to add five millions to the cap.tal st0tk, but the House refused to sanction those amend- ments, and the Senate finally, on the 20th of January. 1815, passed the bill as it came from the House the last time, On the 30th, Prosident Madison returned the bill, unsigned, with various objections. On the 6th ‘off February, tho original bill, as recommended by tho Secretary of the Treasuary, was again introduced in the Senate by Mr. Barbour, of Virgina, aud on the 1th passed by a vote of eighteen to tifiven, It was sent to the House, andon the 17th of February it was indefi- nately postponed by @ vote of soventy-four to seventy- three, Another pill to establish a national bank, with a capital of thirty-five millions, was brought before the succeeding Congress and finally passed on the 6th of April, 1816, CONDITION OF THE COUNTRY IN 1815. Having given a succint history of tho struggle to establigh a national bank, which bas led us beyond the chronological order of tho financial events of the country, we will rotarn to the examination of the condition of affairs in the early part of tho yoar 1815, aftor the resto- ratiomof peace. THE WAR DEBT AND THE POPULATION, The debt created durng the war, as far as known at the time peace was restored, amounted to about sixty- nino, millions of dollars, which, added to tho, liabilities at the commencement of the troubles with Bngland, made the, whoie ascertained indebiedness of the country on the first of January, 1815, amount to one hundred and nine millions, and it was thought that at loast twenty millions more, over and above the surplus revenue, would be reguired to moet outstanding obligations, The population of the country in 1815 was about nine mil- lions, ineluding one million three hundred thousand slaves and two, hundred thousand free colored. LOANS AGAIN RESORTED TO. The return of peace having partially, as we before stated, restored the public credit, Congress was again indneed to resort to loans to relieve the treasury, and an act was accordingly passed authorizing the Secretary to borrow eighteen and a half millions on six per cent stook, ‘and on the 10th of March, 1815, proposals wore solicited for twelve millions of the amount, nine and a quarter millions of which was taken at rates varying from ninety- five to par, although the frst offers that were made and rejected by the Secretary ranged only between seventy- five and eighty-nine dollars in money for one hundred in stock. In rejecting these proposals Secretary Dalles stated that an honorable regard for the public credit would not permit him to allow the loan to assume the shape aod character of 4 scramble, subservient to the speowations which create whet is callod a market price, and shifting in every town and village according to the arbitrary variations of what was termod the difference of omvhange. TREASURY NOTES AND THEIR REDEMPTION, The Treasury notes, which in 1814 had become depreciated, also took @ gidden rise, and ocom- manded o premium equal to the amount of in- terest that had accrued upon them. They were used to pay the duties om the largely increased importations which at this time were pressing into the principal sea- porta of the country from all parts of the world, Onthe 16th of June, 1815, the dopartmont gave notice that the Treasury notes which had become due would be re- deemed, much to the displeasure of those wlio desired to fund them, and the interest to conse upon all which should be due and remain outstanding WAR BETWEEN THE TREASURY DEPARTMENT AND THE BANKS. justly refuse their bills, Butagthe Treasury rapidly apprsciating in valuo, it wes not long the ordor lost its obnox!ous feature, and most of ke became rather eager that otherwise to avail themselves of the privilege of dealing in thom. The S:cretary ad- dressed a circular to all the banks asking them whether thoy were willing, a3 before stated, to receive, reissue and circulate ir aad notes, or such of them as had not become due, informing them if a negative an- wor or no answer at all was returned tho receiving of their notes in all payments to tho United States would bo prohibited. Tho Bank of New York, the New York Manufacturing Company, the Bank of Au- gusta, Ga, and the-Bliddletown Bank of Connecticut pe- remptorily declined the proposition, and tho Bank of Amorica, the Union Bank aud the Merchants’ Bank of this city and eleven others neglected to roply, and their notes were accorfingly rejected. The Secretary was prompted in this movemont solely by @ desire to relieve tho country from the embarrassment produced by the want of a national circulating medium, and to. secure the co-ope- ration of the banks with the Treasury. Seven of the banks above referred to as discarding the terms of the Secretary found, after mature reflection, that a war upon the Treasury Department would not be likely to prove profitable in the end, and they accordingly came in and surrendered, They were the Bank. of Hudson, the Bank of Utica, and the Orange county Bank, of this State; the State Bank of Morristown, N. J.; the Bank of Northern Liberties, Philadelphia, and the Farmers’ and Mechanics’ Bank of Cincinnati, MORE TREASURY NOTES WANTED 45.4 CIRCULATING MEDIUM, bd It was tho opinion of many private bankers and finan- ciors at this time that ft would bas proper policy for the government to issue a large amount of Treasury notes of smaller denominations, without interest, like the presont greenback currency, and with them buy up the govern- ment stocks and thus savo the interest. It was thought that thirty millions could thus advantageously be put afioat and Kept in circulition, making an annual saving to the government of two millions, which would ottier- wise have to be paid in interest. The fact that the Trea- sury notes were current in Canada at par for coin con- tributed to make this idea popular. There were others, however, who strongly opposed ® paper ourrency, and who-contended that it was always a favorite measure with desperate advonturers and Meojvent merchants, DISCOUNT ON GOVERNMENT NOTES. Bach city appeared to have established its own prices foe government stocks and Treasury motes, which was owing mainly to the banks in Boston nominally paying specie for thoir bills, and partly to the want of a uniform and acceptable currency. In Boston, where the govern- ment credit had been continually cried down from the commencement of thé war, government stocks, in Au- gust, 1815, ranged between eighty-two and eighty-eight, while in New York ninety-three and ninety-four were frooly offered, and in Philadelphia they were but two per cent below par. We give tho following table of prices in different cities on the 12th of August, 1815:— Boston... York. Phila, Balt, Old government 6 per cents. 88 om 98 New loans.... 82 98 98 58. 61 Pr a fis 116 DIFFERENCE IN RATE) OF EXCHANGE EMBARRASBING 3 TO THE TREASURY. ‘The “differences th'tho rate of ‘exchange botwoon the banks in different Jocalities was the cause of much<m- barragsment to the Treasury, for, howcver ad¢equate it “Might, baye been.ta meet the public engagements, the possession of funds in one part of the Jnion afforded no evidence of ‘its capacity to discharge a debt in another part. ‘The public stock, created in consideration of a loan, as was shown by the Secretary, also partook of the inequalities of the exchange, although to the govern. moht the value of the stock created and the obligation of the. debt to be discharged were the same wherever the subscription to the loan might be made, THE TREASURY PLETHORIC. At the close of the year 1815 the national Treasury might be termed plethoric, which was owing to the large receipts from.customs, which, estimated at the com- mencement of tho year at four millions, amounted to the sum of twenty-five millions. Tho receipts and oxpon- ditdres during the year wero as follows:— none Receipts... . Expenditures... 1 88,686,323 Included in the exp »nditures was over nine millions of dollars paid for int>rest and principal on the public debt, which amounted to $127,334,033. A UNIFORM CURRENCY AND A NATIONAL BANK. The attention of all classes was now turned towards the adoption of somo measures calculated to establish @ uniform currency. The Secretary of the Treasury, in his annual report, dated Decomb>r 6, 1815, brought the mat- ter to the attontivn ~* Congress, and submitted the fol- » lowing questions: -- Fira—Whether ‘t won!’ bo practicable to renew the circulation of gold and ailver coins. Se-ond—Whether the State banks could be success- Tully employed to furnish a uniform currency. Third—Whetber a national bank could be employed }imore advantageously for the same purpose. Feurth—Whether the goverument would itself supply and maintain a paper medium of exchange of perma- nent and uniform value throughout the United States. The Scoretary favored the third proposition, and con- tended that the establishment of a national bank was the best and only adequate resource to relieve the country from its embarrassment; and his views, on the ground of its being a measure of necessity, wore coincided in by President Madison. Hon. John C. Calhoun, a3 chairman of the committee on national currency in the House of Representatives, had introduced, as previously stated, another vill for the establishment of a United Sigtes Bank, and on the 6th of April, 1816, he brought in a bill for tho more effectual collection of the revenue in lawful money. The act provided that after the ond of the year 1816 the notes of the State banks which did not pay specie should not be received in payment of debts dao the United States, and it also imposed the following stamp duties upon all bills which wore not redeemable in coin:— Dew minatin. fh ‘This tax measure was found to be so unpopular that Mr. Calhoun waa induced to ask that the bill be recom- mitted to the committee, which was dong, and on tho following day (April 7) he reported it with the ton per cont tax on bank notes stricken out, Mr. Calhoun subsoqvently proposed an amendment by inserting a section authorizing the issue of fifteen millions of non- interest bearing Treasary notes, which ho afterwards withdrew, and the whole bill was finally rejected by 4 vote of fifty-nine to sixty. On the 26th of April, 1816, a joint resolution was introduced in both houses, aud passed, requesting the Secrotary of the Treasury, after the 20th of February, 1817, to cause all duties, taxes and debts due to tho United States to be paid in Jegal currency—gold and silvor—or in Treasury notes, or bills of the National Bank. The passage of the bill for the establishment of a bank of the United Statea, coupled with the above resolution, settled for a short time the exciting question in relation to a uniform currency. THE STATR BANKS DISSATISFIRD. ‘The State banks, or at least a portion of them, were not pleased with the course adopted by the government, ‘and they were not disposed to accede fully with the re. quirements of the acts of Congress. Thoy ere willing to receive and circulate the Treasury notes; but they did not seem disposed to resume specie payments, a suspen. sion of which they had found profitable for over two years, The iseue of their notes to an unlimited extent ‘was to them a vory pleasant operation, but to be forced to redeom them was an exaction they dosired to be left out of the bargain. Whom it was found, how- over, that the Congressional énactments were imperative, the banks of New York, Baltimore and Philadelphia sent Tepresentatives tp the latter oityin August, 1816, to adopt a compromige, which resulted, so far aa the banks were con fn an agreement to resume specie pay- ments on the first Monday in Jyy, 1817, Just three years aftor the suspension, But the Secretary of the Treasury would not be put off, and he was determined to carry out the law, and throw out the bills of all those banks that did not redeem on the 20th of Fobruary, the time stipulated by the act requirihg duties and dues to the government to be paid in coin, Treasury notes, or bills of specie paying banks, The New Bngland banks, having Akow to mame time We qellectgrs qf dutieg | but 9 very Gul) olroviatiam, were momigetiy Raying * : epecte, and the banks of Virginia, after a severe contest, had been forced by law to redeem their notes before the close of the year. SUBSCRIPTIONS TO THE STOOK OF THE UNITED STATES BANK. During ali this time the national'bank was rapidly pro- gressing towards its final organization. The books of sub- soription were opened on the 1st of July, 1616, and be- for the Ist of Auguat the whole capital of thirty-five millions was subscribed, including seven millions re- gerved for the government. The stock taken wes thus divided :-— Philadelphts, Portsmouth, Nashville, Burlingion, Vi Governnien' Total. . 4 DESIRE FOR MORE BANKING OAPITAL. The mania for ‘banking capital, which was before referred to, was increasing, and from twenty to thirty applications were at all times before the New York Logislature for bank charters, As an evidence of tho wild spirit which’ was then provalent to secure stock in moneyed institutions we will cite the case of tho opening of the books for subscriptions to the stock: of the Niagara Bank of Buffalo,'which had Just been chartered, with » capital of four hundred thousand dollars. The books were opened on the ‘Ist of Jaly, end, when they closed at night, {twas found that over @ million of dol- lars had been subscribed. " “BnINPLASTERS.”” It may be proper to mention as a part of this history that immodiately after the suspension of specie pay- ments by the banks in 1814, that ‘‘shinplasters’” wore introduced to fill up the vacuum made by the withdrawal of silver from circulation, and they continued to be used until the 26th of September, 1816, when the banks and Droker® commenced to pay out ooin’for all sums under one dollar. CONTINUATION OF THE WAR BETWEEN THE TREASU- RY DEPARTMENT AND THE STATE BANKS—TOR BANKS FLANKED. ‘ Tho war between the Treasury Department end tho banks was still going on with little prospect of an adjust- ment of the difficulties; and in the meantime the m'r- chants and manufactuters, and in fact all branches of business were deprossed. owing to the contraction on the part of tho banks of their discounts and a sudden re- duction of their circulation, as well as a want of a proper medium of exchange; and each succoed- ing day found matters in ® moro deplorable condition. The Legislature of Virginia, as before noticed, had passed a law making it incumbent upon the banks of that State to resume specie payments on the 16th of November, 1816; but as the moneyed in- stitutions of the Atlantic citics, which seomed to possess the ruling power, bad decided not to resume until July of ‘the following year, the Governor was compelled to call an extra session to have the time for the resumption. of ‘the Virginia banks extonded. But the new weapon which had been placed in the hands of tho Secretary of. the Treasury, in. .the shape of the United. States Bank, was now about ready to be wielded, Thedirectors of the national bank informed the Secretary that.the institution “ would be ready fo,commence business on the 1st of Janu- ‘ary, 1817; and. Mfr, William H. Crawford, who had suc- cveded .Hon. Alexander J, Dallas, as the head of the Treasury Depariment, feoling disposcytu carry ot. thé views of his predecessor, immed ately tlformed the Siate. banks—or such of them as held govornment funds—that uniess they resumed specie paymonts before the 20th of February tho public deposits would. be summarily with- drawn from them and placed in tho national bank. This was a movement that the banks had not anticipated, and were unprepared to combat; and thoy accordingly held another mecting in Philadelphia, at which thoy agreed to surrender and open their vaults to thelr billholders on } tho day stipslated, February 20, 1817. TROUBLE IN FINANCIAL CIRCLES—BANKS SHAVE EACH OTHER'S NOTES—MONIKD INSTITUTIONS DE- NOUNORD. We have now passed the most trying times that the government experienced in its monetary affairs, and brought our record down to the your 1817, at which timo the nation’s exchequer may be said to be in a sound and healthy condition. But outside diMcultios began to ariso, and'thero were signs in tho horizon of finance of an ap- proaching storm. Although the balance of trade since the close of the war bad beon greatly against us, particu- larly ‘with Great Britain, amounting already to over « hundred millions of dollars, specie flowed in from France and the West Indies, and even from England—that from the latter country having been sent by adventurous capl- talista to be employed by the United States Bank. The State banks, however, kept specie scarce, and speculated ‘on the difference of exchange, greatly tothe annoyance of the commercial community. The country was again flooded with their paper, which was depreciated, and in many cages irredeemable, and the condition which the circulation had assumed, with the exception of that por- tion of it formed by the nationat bank notes, may be justly termed the inauguration of the “wild cat’ or “red dog’* system of a later day. In October, 1817, the New York Prices Ourrent gave the folowing figures, showing the outside rates of discount of the bilis of the banks in the different States in this city:— i Sates. New Hanrpshire. banks which nominally redeemed in specie. As the rates were nearly the same in all the cities except upon the bills of thoir own banks, the trading community were subject to a steady shave om the paper forming the circulating medium, the profits from which, of course, tended to enrich the banks, This caused a feoling to arise againat ‘thom, and, as the mother bank participated in it ina measure and encouraged its branches in the performance of the same operation, a regular war finally broke out in 1818 against all moneyed institutions and paper circula- tion. The National Bank, or “mammoth” and “mon- opoly,"’ ae it was ‘termed, was accused of treachery to the people and speculating on their necessities, and the Stato institutions were charged with swindling, The war finally found its way into the political organizations, andthe ise at the elections was mainly banka or no banks, the affirmative party being fostered by what the opponents termed the “moneyed aristocracy.” ‘The evil which it was contended the barks were producing was even carried before grand juries, and by many of those bodies their course was severely reprimanded. UNITED STATES BANK SHAVES 178 OWN NOTES. The sound “national currency’? which the peo- ple had anticipated would foilow the establishment of the United States Bank disappointed this expec- tation, except so far as it related to government transactions; and, as if to dispel any lingering idea of hope for the future, the mother bank on the 18th of Au- gust, 1818, gave notice that it would no longer receive at par the notes made payable at ite branches, of which there were cightoon, except for debts due to the United States. It was contended that this act was a clear viola- tion of Hs charter, and the feeling that had been inaugu- rated against its management became, in consequence, more intenso, and caused Henry Clay, who had been chosen one of its directors, to decline the position. In 1817 the stock of the mother bank was worth 170, but owing to the war which was waged against it and the lonaes it eustained, ite shares in 1920 were sold as low as 97, but aa tho troubled waters began to settle in the sub- Bequent years, it rocovered a portion of the confidence Ht had lost, and by 1826 ite stock was up to 117. REDUCEION OF THE PUBLIC DEBT. Rafore the clove of the yeer 1628 the public @obt had boon reduced to seventy-three millions, or to nearly onehelf the amount with which the country was bar. demoed at the clpge of tho war. This amount, however, did not the subscription of seven millions to te stock of the United States Bank, which wise Which It paid an interest of five Joy om MODS axpouiie fgg nerenner ON GOVRRNMENT On the 64 of March, 189, Cohgrove passed a law, the effect of Which was to feduce theinterest on twelve mil- lions of the six por cent stock to four and « half per cent. ‘Tho main prqvigions af US iH apy cgatalaed a the Col: BN. U wd... towing cirowi. issued from the Treasury Department om the 14th day the same month:— 1of 2 law fourth ‘sections fe ayy wns dnd bet Sorte” Stone of daar, artaeihe pe coms stook, of the yar eigin, 998, andre’ aot asec, gad the he 5 "Treasury of the United 8, aD Mund several loan obs “8; o7 the Ait of April ext, Lo continue open until the wl -~ oF on rd , for such parts of the a ove mention by: stock as shall, on the day abe. Fusion, bend , Treas: the mana caine beaks of the Rretivaly; whl ® subscription hall be offected by a tra tho Unied States, in the manner. provided by ia ror such tranx"er of the or credits standing on the sa'd books, am | by @ sur- Fender of-the cert fleates of the stock #0 subst vided that all subsor:ption, by such transfor @f stoc! ball be considered as a part of the rald twelve nullions, bs Appts sa tharinnd: to be bortowed by the first’ geotion of this ac Suc. 4. And be it further enacted, That, for the whole any part of any stim which shall Lo'thos phneite 8 Gred.ts shall be ont-red to the respective subscribers, who shall be entitled to a cortificate or certilcutes, pure Porting that the United states owe to the holder or Lold- ers thereof, his, her, or their assigns, a sum to be ex- pres-ed therein, equal to the amount of tho principal stock thus subscribed, bearing an interest not excecd.ng four and one-hal? per centum per annum, payable quar- terly, from the thirty-first day of December, on » thousand eight hundred and twenty-tive; transferrable in tho same manner as is prov ded by law for the transfer of the stock subscribod, ond subjectto redemption at the pl acure of the United States, as follows :—One half at any time after the thirty-first day of December, Lue thousund eight hun- dred and twenty-cizht; andthe r mainder at any tine after the thirly-tirst day of December, one thousand eight hundred and twenty-nine» Proy sded that no rein . ment shall be made, except fr the whole amo. nt of such new certificate; nor until afier at least six months publie notice of such fatend-d relmbrrsement, "Abd it sball be the duty of tho Secretary of (he ‘Treasury to cause to retransferred to the respective. sub: we the several gums by thom subscribed, boyomi tue amount of the cer. tileates, of four aud ‘ono-bal. por,cent stock. iscued to S20. 6. and be it further enac'ed, ‘That the same funds which have hereto.ore ocen, and ‘now. ars, pledged by law for the payment of the interest, and for the redemp- tion and reimbursement of the stock, which ay ge decmed or roliabursed by virtve of the prov’ r act, shall remain pledged in like manner for the payment of the interest accruing on the stock created by reason of guch subscription, and for the redemption or reimburse- ment of the principal of the same, And it shall be the duty of the comm:ssion! ie cane to be applied and pald, out of the ae ‘ad, ‘ang every year, sch sum and sums as may be annually re~ quired to discharge the interest -accraing on tho stock which may bo created by virtue of this act. The sald commissioners are alo Lereby authorized to apply, from time to tim, such sum and sums out of the said fund, as they may think proper, towards redeming, by. pur> chase or by reimb — rani atin eb vistuug of this act, stock; mich part of the agonal sa ten a ice of dalam vested by Iuw tn the said commissioners, as may be no» cosiary and-requ'red for the above perposes, ‘shall be and cont nse appropriated to the payment of interest and re demptioa of the public debt, until the whole of ths stock: which may be created under the provisions of this act ahail have b en redeemed or reimbursed. Now, thorefore, notice is hereby given that books will be opened at the ‘Treasury of the United ‘tates, and. a& the several loan offices, on. the first day of April next, and continue open until the first’ day of October thereafter, for receiving subscriptions in conformity with the pro visions of the said law. ‘The subscriptions may be made by the proprictors of the stock, elther in aggre or by their attorneys duly ate thorized to subscribe and transfer it to the United States: thould subscriptions of said stock be made to an amount excecding twelve millions of dollars, a distr bution of the said sam of twelve millions will be made amon, th? subser.bers, in proportion to the sums sube scribed by them respectively. ‘ SAMURL L. SOUTHARD, «Acting Secretary of the Treasary: THE COUNTRY PROSPEROUS. The credit, finances and prosperity of the country were from that timo onward and upward, ‘and’ the: history. of ‘one yeur's tfovements would be only repeating the eyonts of the pr-ceding twelve months, until, in 1882, there was found in’ the Treasury a ‘strplcs of unappro- priated fonds. amounting to, forty. millions of dollars, which was distributed among the tates. City IntcHtgence. Dzowsinc Casvautixa.—On Friday ‘last “Ann L. Wene kelmann, a child four and a bali years: old, accidentally fell intd the dock foot of (hartes'street, North river, ang drdwned... Search was, mad fop Whe body, and See ternoon Br, Weakermaun, who lives at 31 wa rixteenth slreyt, recovered it. ,Goroner Gamble notitied to hold an.inqu st. lames Coanolly, a lad seven yeara old, whose parents live at 342° Greenwich street, «vas drowned by acol- dentally falliag overboard from piér'No. 4, North'river. ‘The reinains have, not yet been recovered. Tanpiyis Acctpxyt ro 4 Squpier oy THs Eianry-Secomm » Reognuxt Naw Yore Stare Vountuxes.—About twelve o'clock on Saturday night, when the train from Wash+ ington was six miles this side of Wilmington, Delaware, a sadeaccident occurred, to a soldier of Company Q, Eighty second reg went New, York ‘tate, Volunteers, who Was a passenger In the train, It appears that the unfortunate man had his two lege ‘ovt of the window, * when, coming in contact with a bridgo, thoy were bot torn completely from his body.” The poor fellow was loft, ; at Wilmington, still living, but no hopes aro entertained of his recovery. He was a discharged soldier, on the way. to New York, and about twenty-two years of age. His name has not transpired. bo i Tux Fouxgra ov Cartaix Para Hexay,—from the prevalence of a severe storm of rain the funeral services of Capta‘n Peter Henry, of Company E, Tenth regiment, ‘New York :tate Volunteers, which took place at the City Hall yesterday, were not as numerously attended as it weneiroan they-would be. But the fur under the di ‘rection of the proper committee of the City Council, was a very interesting and tmpressive one. The remains, escorted by accompany of the Tenth and Ma- zeppa Engine Company, No. 48, and numerous friends of tho deceased officer, left the Hall at ialf-past one o'clock: tn the afternoon, and were transferred to Trinity Ceme- tery, where thoy were duly placed in the tomb withap- propriate Ceremonics, A New Live or Srazer Raruway.—The facilities enjoyed by our citizens for transportation from one part of the city to another are at present Considerable and far better than they once were; but there seems to be room left for. improvement. A new line of railway is now in course of construction, leading from Wall street through Hanover square and Peari street, and intended to connect. with some of the lines already in operation, The work has just commenced, and is being pushed forward to com- pletion with cunsidermble despatch. opera Lapy's BOOK FOR 3 #,'' a line ray) Goters ‘celcbraved Colored Pixhiovs, novel and elegant, the celeb biishtnent of » fashions agaiw freee “iebrated esta! Messrs, A. T. Stowatt & Co,, of New York—Robe Impera- trice, with Zonave Jacket, and Organdie Robe. From Mr, Brodie we have the Rio Varde, = beautifak ent. kn entirely new style of drées is One of our illustrations. These fashions are only attainable in See kady'e, Ream and they bring down the modes to the Tatest arriv; fore they” are invaluable, thoee publ {nthe number, to Indies who are preparing for the watering places and other fashionable resorts. wituars : broidery Pattoru ee imming to Flanders ntleman’s Brace in Embroidery, Chemise Yoke Pattern, Inival Letters for Pillow Cases, Butterfly Ornaments, now so popular; a large assortment of Fashions, Capen Caps; Boy's Dress, Scent Sacheb and Crochet Tidy, a about fifty other patterns. For sale by all the . “oF EADS OF THE PEOPLE.”—COBDEN, THE ORA- nd Reformer; Mra, cruler, Kiamese x Witch, Doctor, Assassin of the President, with, + How wo'test os Con ad bein wil nology mined, uty on a Horse, Dangerous “Signs of Character,” Soul Life and Tite Court as i should vey in the PinakNobOd Hex, JOURNAL for uno. Ni . 0 L rat ‘semen iaveit, FOWLER & WHS a Brondwage SX. "All si flustrated numbers, from Janiry to June, sent for $1. 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