﻿14

WAR BORROWING

per cent, bonds. In 1846-8 there were issued, under
the provisions of the act of July 22, 1846, $7,687,-
800, and under the provisions of the act of January
28,	1847, including reissues, $26,122,100 — all

bearing interest at the rate of five and two-fifths or
six per cent, with the exception of $1,766,450 of the
earlier issue which bore a nominal rate of one mill
per cent, per annum.

(D)	The crisis of 1857 and the suspension of
specie payments swiftly changed a comfortable
treasury balance into the prospect of a disturbing
deficit.13 The established revenues would under
normal conditions have been sufficient to meet ex-
penditures ; but the suspension of the banks had been
followed by sharp contraction of business. Much
dutiable merchandise had been placed in bond and
the flow of current income rapidly dwindled. To
tide over the interval, Congress on December 23,
1857, at the request of the Secretary of the Treas-
ury, authorized the issue of one-year treasury
notes “ for such sum as the exigencies of the public
service might require ” not to exceed at any time
the amount of $2o,ooo,ooo.14 The notes were to
be issued at par in denominations of not less than
$100, with interest at not more than six per cent.
They were to be receivable for all public dues and
when redeemed might be reissued within the period
of final maturity. The issue was to be emitted in
two installments — the first, to the amount of $6,-
000,000 forthwith; the remainder, by public tender
“ at their par value, for specie to the bidders offer-
13 Knox, pp. 70-1.	14 Bayley, p. 368.