GOLD AD. GOLD AND a-,;~~~~~~~~~~~~~~~~o AN AMERICAN HAN])-BOOK OF FINANCE, WITH OVER EIGHTY TABLES AND DIAGRAMS ILLUSTRATIVE OF THE FOLLOWING SUBJECTS: THE DOLLAR AND OTHER UNITS; PAPER MONEY IN THE UNITED STATES AND EUROPE; GOLD AND SILVER IN THE UNITED STATES AND EUROPE; SUSPENSIONS OF SPECIE PAY MIENTS; THE ERA OF GOLD; VALUES OF THE 'RECI'OUS METALS; THE ERA OF DEBT; THE RISE A.ND li'ALL OF PRICES; ALSO, A DIGEST OF THE MONETARY LAWS OF THE UNITED STATES. BY WV.~"L. FWCETT. zz CJTICAGO: S. C. GRIGGS AND COMPANY. 1877. -/ 11' I u COPYRIGHT, 1876. BY S. C. GRIGGS AND COMPANY. KNIGHT & LEON-ARD, PRINTERS, CHICAGO. A.ZEESEh CO., ~LECTRXTyPERS, CHI PREFACE. HE author's first object in this book was the compi lation, in a compact form, convenient for reference, of trustworthy statements and figures regarding the gieat factors in the financial problems of the day, and to which reference is continually made in financial discutssions, viz.: the increase and decrease of the volume of paper money at various periods in the United States and in Europe during the last fifty years; the production of gold and silver, and the consumption of these metals in the arts since the beginning of the era of gold in 1849; the additions to the world's stock of gold and silver used as money, and the amounts now in use in all countries; and the increase of debts and traffic in thlis age of steam; also, in the compilation of monetary laws of the United States, to set forth in the language of the laws themselves the nature of the contract between the government as a borrower and the note and bond holders as creditors. Whatever of a theoretic nature there is in the following pages has not been prompted by any preconceived notions, nor written in advocacy of any PREFACE. scheme for ameliorating the finlancial troubles of the times, but has in each case been incidental to the statement of the facts.'If others, upon the basis of the same facts, should arrive at different conclusions, it should not render this compilation of facts any the less valuable as a book of reference, which it was the author's aimn to make. CHICAGO, Dec. 6, 1876. 4 TABLE OF CONTENTS. THE DOLLAR AND OTHER UNITS. Monetary units of all countries (Tables 4, 5 and 6), - In many cases only ideal coins, The pound sterling and the dollar as, -9 The dollar- origin of the dollar symbol, Origin of the name,-... American- of the Confederation, - - - - American -of the United States, - - - Reduction in value of United States dollars in 1837, Abolition of the American silver dollar, - - The London Stock Exchange dollar, - - The "dollar" in Frankfort and Paris, - - - Ideal moneys, -... — - ---- Of international exchange, -.. ---- Of the medieval banks,-... Change from a silver to a gold currency in the United State in 1837,-... Similar changes in France in 1785 and Austria in 1857, PAPER MONEY AND COIN IN THE UNITED STATES. Paper money and coin in the United States, - - Table of the amounts of each in use each year from 1854 to 1876,- 3 Period of greatest contraction, -. ---- Amount of coin in the United States, 1854 to 1876, The United States banks, -... Estimated number of each class of banks in the United States in 1875, and the aggregate of their deposits, - 5 - 259-264 15 - 17-19 13 22 19, 170 - 17, 171 ,)1-175 180 25 26 49 19 38 21 21 27 34, 35 32 35 55 36 TABLE OF CONTENTS. PAPER MIONEY IN EUROPE. Paper money in Europe,-... Invention of, -... First used in Sweden, -.. — --- Table of amounts in Great Britain at various periods, France at various periods, - - - Germany at various periods, - - - - Austria, --- Italy,-.... Switzerland, -.... Table of aggregate in Europe, - -- Increase of in Europe, -... Great banks of Europe, -... Banks of Venice, Barcelona, Genoa, Amsterdam. etc., Bank of England, -... Joint-stock banks in Great Britain, Bank of France, -.. — ---- Specie in, -... — ---- Imperial Bank of Germany. -. ---- Bank of the Empire of Russia,. —- --- National Bank of Italy,-... National Bank of Spain,-... Banks in Switzerland, - -~ —-- Bank of Belgium,-... Banks in Sweden,-... SUSPENSIONS OF SPECIE PAY,[EN-TS IN ALL COUNTRIES. Suspensions in the United States,-.. The Bank of the United States, The suspension of 1862, -... Depreciation in value of the currency each year, - In Great Britain, 1791 to 1821, - - - -- Of the Bank of France in 1848 and 1870. - - Remarkably slight depreciation oFt ti(- notes of the Bank of France (see note to page 557), - - - - Austria, -. -.. ------ 59 Italy, - - - - - - - - - 60 Russia, - - - - - - - - - 48, 61 6 38 40 40 43 44 44 46 48 49 Russia, - 51 52 52 49 38 40 40 43-57 7 0, 8 i-, 44 47 49-60 50 5 1 5 1 52 54 55 55 56 57 57 58 59 TABLE OF CONTENTS. Brazil, - 89 — - Various effects of on value of currency, - - Inconvertible paper money - three causes affecting its value, Its increase in value by reason of scarcity of any other medium of exchange, -..- --- Its stimulating effects on industry and trade, - - GOLD AND SILVER COIN IN EUROPE. Estimated stock of gold and silver in Great Britain, France,.... --- - - ---- Germany,-.... The method adopted by the author of this book for approxi mating the amount of gold and silver in each country, Table of approximate amount of coin in each country in Europe,-.... All estimates in regard to Asia entirely conjectural, Lavish use of both gold and silver in Asia for personal ornaments (foot notes), -.. ---- The stock of gold and silver in Asia not a source of supply for Europe or America,- 9 Probable stock of gold and silver coin in the world, - - AVERAGE RATIO OF NATIONAL REVENUE TO VOLUME OF MONEY IN USE IN ALL COUNTRIES. The ratio of national revenue to the total volume of money in all countries, -.. -- ---- Table showing the uniformity in the proportions of money and national revenue per capita of the population in all countries,-...8 The average amount of annual national revenue about 38 to 40 per cent of the total volume of money in use, - Striking illustration of the above rule in the proportions of annual revenue to the volume of money in use in the United States each year from 1866 to 1876 (note to page 243),-.... COIN AND PAPER MONEY IN THE WORLD. Total of paper money and coin in Europe, United S tates, -. ---- 7 61, 89 62 62 63 64 66 67-72 72-75 75-80 82 95 92, 93 92, 93 95 78 78 79 79 83 34, 35 TABLE OF CONTENTS. Canada, 87 Mexico, - -. —---- 88 Brazil, -....88 South America, -. -. - -— 90 Asia, - -.... - ---- 95 The World, -. --- -95 Diagram showing the approximate volume of paper money in the world each year from 1845 to 1875, and the relative decrease in the amount of gold and silver, - 128, 129 THE ERA OF GOLD. The average annual product of gold prior to about 1825 was thirteen millions to fifteen millions dollars,, - - 98 Increased to about forty-three millions dollars per annum between 1825 and 1848, -. - -— 98 The great increase from the placers of California and Aus tralia mark the beginning of the era of gold, - 99 Table of the product in the various quarters of the globe, - 101 Product of gold and silver in the United States, - - 102 Annual consumption of gold in the arts -Table of, - 114 Jacob's estimate in 1830, - -.. --— 108 McCulloch's estimate in 1857, -. - --- 109 Author's estimate of total annual production, consumption and addition to stock in the world from 1840 to 1875, 110 Diagram showing estimated production and consumption of gold and silver, - -...114, 115 Production, consumption and exports of silver for the United States, -. -.. ------ 112 Annual movement of silver to Asia, - - - - 96-111 The end of the golden era about 1862, - - - - 145 VALUES OF THE PRECIOUS METALS. The values of gold and silver largely adventitious, - - Great changes in. - - - - - -- Depreciation in, from 1849 to 1854, - - - Cause of the decline of silver with the decline of gold after 1849, -. - -- --—.. Relative values of gold and silver, in accordance with the experience of two hundred years, - - - - 8 134, 139 142 129 133 139 TABLE OF CONTENTS. Tables of relative values of gold and silver, - - - 141, 142 Diagram showing the course of relative values from 1840 to 1876, - -... ------ 151, 152 Table of the relative legal values of gold and silver in various countries, -. -- --— 144 Relative values of gold and silver in the United States by the law of 1792, ----- -.-. 140, 171 The Latin Monetary Union, -.. — --- 144, 145 Demonetization of silver in Great Britain in 1816, - 145 Effects in 1872-3 of the British law of 1816, - - - 145 The exclusive gold standard of values impossible for all nations, - -... ------ 137 Exclusive standards of either metal in different countries inimical to the comity of nations, - - - - 138 Report of the British Parliamentary Commission of 1876 on the depreciation of silver, - - - - -135 THE ERA OF DEBT. Growth of national debts in the last twenty-five years, - 115 Railroad debts of the United States and of the world, 117 Municipal debts in the United States and Europe, - 118 American State and county debts, - -. -— 121 Aggregate of funded debts in the world, - - - - 122 Impossibility of liquidaLtion, - -.. --— 122 Aggregate annual interest, -. -- ---- 123 Lower rates of interest the necessary consequence of previous high rates, -. --- - ---- 122 Seven thousand millions of war debts created in eleven ._from 1860 to 1871, - -.. ---- 148 The difference between the burden of war debts and the debts of enterprise, -... -- --— 133, 134 Narrow views of financiers and statesmen on the question of great debts, -.. - - --- 148 PRICES OF COMMODITIES IN GOLD. Table of the rise in average prices from 1849 to 1854. The latter compared with 1875, - -. - - - 130. 131 Cause of the great rise of prices from 1862 to 1867, - - 131 Causes of the reaction in 1872-3, - - - - - 134 9 TABLE OF CONTENTS. Diagram showing the course of prices of commodities from 1840 to 1875. - - - - - - - 141, 142 PROGRESS OF THE AGE. Traffic has nearly quadrupled in twenty-five years, - - 124 Increase in the value of railroad tonnage, - - - 126 Table of the railroad mileage of each country in the world, 117 Increase of bank clearings in the United States and England, - - - - - - - - 124. 125 Extent of the economization of currency by the clearing house system, - - - - - - - - 126 Agencies at work toward a new financial era, - - 147 MIONETARY LAWVS OF THE UNITED STATES. Revision of the laws of the United States in 1873, - - 167 Coinage laws-all the clauses of all laws relating to the weight, fineness and legal-tender value of United States and foreign coins, from 1781 to 1876, chrono logically arranged, - -.. - --- 170-182 The silver dollar the unit, - - - - 170, 171, 175, 176 Half dollars, their legal weights and values, - - - 171,175 Reduction in value of half dollars and other fractional coins. Fractional coins no longer legal-tender for more than five dollars, - -... - --— 177 Eagles, -.... — - - --— 171,175 Change in the value of, in 1837, - - - - 171, 1 75 The gold dollar authorized, -. -- ---- 176 Made the unit of values, - -.. --— 180 The trade dollar, -... — - ---- 180, 181 Legal method of computing the value of the pound sterling, 182 Laws authorizing the issue and redemption of United States notes and bonds, chronologically-arranged, from 1860 to 1876, - - -- - 183-202 United States notes made legal-tender for all debts, except duties on imports and interest on the public debt; Acts Feb. 25. 1862; July 11, 1862, and March 3, 1863. - -.. - --- 186. 189, 190. 191 Made receivable the same as coin for all loans nego tiated by the United States; Act Feb. 25, 1862, - 186 10 TABLE OF CONTENTS. Made receivable in payment of all loans made to the United States; Act July 11, 1862, - - - Sinking Fund Act of Feb. 25, 1862, - - - - - Pacific railroad bonds, -...- ---- Amendment to Pacific Railroad Act of July 2, 1864, - - Public Credit Act, -... —---- 1 Funding Act of July 14, 1870, -..- --- Specie Resumption Act of Jan. 14, 1875, - - - Subsidiary Silver Coin Law of July 13, 1876, - - - PUBLIC DEBT AND FOREIGN TRADE. Table of amount of each form of obligation of the United States outstanding, each year since 1860, - 152, 153 Total debt each year since 1791, -. - -— 154 Foreign indebtedness of the United States, - - - 156 Imports and exports of merchandise and specie, each year since 1843, -... — - --— 159, 161 Foreign trade balances for and against the United States, each year since 1843, - -. --— 162 Authority of the Secretary to make interest-bearing treasury notes legal tender; Act March 3, 1863, - - - 190, 191 "Seven-thirty" treasury notes made a legal tender; Act Junle 30, 1864, -. -. - -— 193 Fractional currency, - -... - ---- 192 NATIONAL BANKS AND BANK CURRENCY. Organization and powers of national banks, - 2 Obtaining and issuing circulating notes, -2 Regulation of the banking business, -2 Dissolution and receivership. - - - -- Taxes on circulating notes, - --.4 Stamp tax on checks, - --—.. Crimes and misdemeanors, - --.4 Interest laws of the States, - - - -- [In addition to the above captions there are marginal notes which furnish a complete index to all important clauses under each general head.] 11 188 181, 187 194 197 197 200 201 203 214 202 235 244 246 248 254 TABLE OF CONTENTS. REFERENCE TABLES. Table 1.-National Banks in the United States each year since 1863, -. --- - ---- 256 Tables 2 and 3.-Relative Values of Gold and United States Notes, with gold at any price not exceeding 285, - 257, 258 Tables 4 and 5.-Monetary Units of all Countries, with the declared values of their coins in United States money, January 1, 1874, - -.. ---- 259 Table 6.-Monetary Units of all Countries, and the declared values of their coins, January 1, 1876, - - - 264 Tables 7 and 8.-Prices of Leading Staple Commodities in New York for Fifty Years, -.. ---- 265-267 Table of Population of each Country on the Globe in the period 1874-6, - -—...268-270 12 THE MONEY SYMBOLS. N the cover of this book are grouped, ini one design, the three emblems from which are derived the dollar symbol, $, and the pound-sterling symbol, S. The most prominent and interesting feature of the grouip is the two pillars, which were derived from the pillars of Hercules, one of the oldest symbols known to the human race. Their composition with the money syrnbols is due entirely to the emperor Charles the Fifth of Germany, who being also king of Spain adopted them as supporters on either side of his escutcheon, and also placed them in the device on the Spanish "pillar dollar" of the value of fifty-four pence sterling, which became the unit of Federal money in America, and upon the basis of which the pound sterling was valued at $4.44.44. Charles derived the idea from the poetic conceit which gave the name of "Pillars of Hercules" to the two mountains which stand on either side the Straits of Gibraltar, viz.: Calpe, or the Rock of Gibraltar, on the north, and Mount Abyla, in Africa, on the southl. The scroll, which in the device on the dollar was twined about the pillars, has by long use been gradually modified, in making the symbol with the pen, so as to assume its present form in the dollar-mark. It is also presumed that in the pound-mark the - was substituted for the scroll, thus still retaining the two pillars which 13 THE M-IONEY SYM3BOLS. had become what might be called the generic symbol of money in general, while the scroll and the Z referred to the two monetary units most widely known to the world -the. being from Libra, a balance; or, in this connection, a standard of values. But before Charles adopted the pillars as supporters to his arms, they had been part of the metropolitan emblem of the city of Seville, and the scroll bore the device e_epltS ultra, referring to the ancient belief that westward of that coast of Spain there was nothing but sea and space. Charles elided the particle ne, and left the motto Plus oktra, in which form it appeared in the arms of the Empire and on the pillar dollar. Originally the poundsterling symbol was made with two transverse bars. The custom of making it with only one horizontal bar, and the dollar-mark with only one upright bar, is an innovation of modern type makers. 14 THE DOLLAR AND OTHER UNITS. LL national governments assume the right to estab lish a monetacy utit, viz.: to select a certain coin, either of gold or silver, in which accounts shall be kept within their territory. Also to coin money and retglate the legal tender value of their own coins and also of foreign coins, viz.: to declare at what proportion of the monetary unit the coins shall be received in payment of debts. But the declared or legal tender value of coins does not always agree with the bullion value of the coin selected as the monetary unit. In fact there have been, until within the last half century, very few instances in which the bullion value of the national coins of any country have corresponded to the bullion value of the coin selected as a monetary unit. This discrepancy has arisen from two causes. First, because- for their own purposes - national governments in the exercise of their right to coin money and regulate the value thereof, have frequently changed the bullion value of the coins struck at their national mints, while the monetary unit being in most cases an ideal coin, or at least a coin which had disappeared from circulation in any part of the world, could not be changed except by legislation to change the unit of values; an act which, in justice to all debtors and creditors in the country, would require that there should be a concurrent and corresponding change in the amount of all debts and accounts kept in accord HAXND-BOOK OF FINANCE. ance with the former unit of values. The second cause of the general discrepancy between the bullion value of the monetary unit of any country and the bullion value of the coins minted in the same country is the difference in the relative values of gold and silver. The monetary unit being in all eases only one coin, of o)ze metal, the changes in the relative values of gold and silver would cause continual changes in the values of the coins of the respective metals. There is reason for believing that the phrase "double standard," as popularly used with reference to countries where both gold and silver coins are a legal tender in any amount, is generally misunderstood. The standard in all countries nmust be the monetary unit established by law, and as a unit means one there cannot be "two units." The proper phrase with reference to the monetary systems of such countries would be "double legal tender," or legal option of payment of debts in either gold or silver coins at their declared legal (not bullion) value, proportionately to the established monetary unit. But besides the monetary nilits established by different countries there are other ideal moneys or ideal quantities of pure gold or silver which have been selected, not by law, but by the custom of merchants, for the measurement of the coins of different countries in transactions of international exchange. These have, in most cases, been selected to correspond with the value of certain coins which have had at some time a wide international circulation. These are called "moneys of exchange," and do not necessarily agree with any of the monetary units established by different countries nor with the values of coins struck at the mints of any country. 16 IITHE DI)OLLAR AND OTHERI UNITS. In order to have a perfect idea of the tfunction of moneys of exchlange, or ideal moneys, which are with respect to coins as measures with respect to goods, it must be borne in mind that pure gold or silver is the only universal currency,-not gold nor silver coins, for the nominal values of all these are arbitrarily fixed by legislation, which is necessarily confined within local limits. The oillv true denomination of coins, to make them agree with the universal currency, would be l)y having the ounces, pennyweights and grainls of pure mnietal which they contain stamped on them. If a sovereigln was stamped "113.001 grIailns of pure gold," and a half eagle was stamped " 116.100 grains of pure gold," their relative value would be patent to all people of other nations who understand the Arabic numnierals, even though they might not be conversant with the domestic decimal system of the UTnited States or the English system of sterling money. Indeed, such a nomenclature for coins seems to have been conteinplated in the original divisions of British money into pounds," " ounces" and "pence" or " pennies." Originally the pound sterlitng represented a pound weight of silver, or about three times its present value, but it was being continually changed to suit the purposes of different monarchs, and through these changes in the coins the divisions of money were finally changed fiom pounds, ounces and pennies -or pennyweights - to pounds, shillings and pence. In 1266 an attempt was made to find a natural standard for the divisions of mioney, and it was enacted (3d Edw., 51) that "an English peny called a sterling, round and without clipping, shall weigh thirty-two wheat corns from the midst of the ear, and twenty pence to make an ounce, and 17 J* HAND-BOOK OF FINANCE. twelve ounces one pound, and eight pounlds one galloli of'wine, and eight gallonis ot'f wine one Loid(loni bushel," thl money standards a,d the imelsiires of capacity beilng originally parts of o,e series. Thle original grains of' lwheat were soon aiter the above period represeited by metallic grailns, whichl are supposed to be the origin of our mrodern troy grains, though tlhe troy pound was afterward changed to twenty-four grainls to the ounce, a-,,d the pound itself cut ijuto twenty shlillings for the mioney measure, instead of twelve ounces, the "peinys" or "sterlinigs" becoming pence in nimoney and pennyweit,-Its ill troy weiglit. The origin of the fatrthings of sterling money was in the manner of minting the "peiny," wlicli was stamped with a deeply imipressed cross, so that it could be broken in twain, or into iourths; hence fot'/things, which was afterwa,rd coirupted into farthings. The natural standard of wheat grains- which was found variable and altogether mureliable - having been abandoned, the alterations of the inonev standards continued the sanme as before: Elizabeth ordered the oun(ce cut into sixty pence instead of twenty. Ilenry VIII debased the fineness and altered the weights of tlhe coins so nmuch that at times none but experts kinew their real value. The "nobles" and "rose nobles" and "' angels" and " guineas" and " sovereigns" were only so many names given to disguise the changes in the value of the gold coins that were the nomninal representatives of a pound of silver. A historical table of the coinage of England shows that in the time of Edward III a pound troy weight of standard gold was coined into ~14 Os. lo0d. of sterling money. From that time down the value of the coinage 18 THE DOLLART AND OTHER UNITS. was diminished under almost every monarch, until in 1 717 a pound troy weight of the same standard gold was coined into ~46 14s. 6d. )During these five hlundred years the gold coins were thus debased in the ratio of 3~ to 1, and the silver coins in the ratio of 99 to 32. During the sanie period the silver coins of France and Spain were debased in the ratio of 17 to 1. This trick of royalty, however, became stale in the latter part of the sixteenth centtury; and though it continued to be practiced to some extent its eftects were nullified in a great measure by the clumsiness with which it was done. The people of Europe, too, began to get better acquainted with each other. MAlerchanits of different countries mutually agreed on moneys of exchange as a measure of the value of coins; the ideal standards thus established were practically beyond the reach of legislation by single nations, and the ideal " dollar" or "pound" or "florin" of exchange always demanded and received its fill quantity of pure gold and silver. In 1786 the Congress of the Confederation of Amierican States established the dollar of 4s. 6d. (54 pence sterling) as the money of account for government coincernis and for foreign commerce (see Coinage Laws of the Confederationi); but this dollar was never represented by anv American coin. In 1792 the Congress of the United States established a nati(-)lal mint, and ordered "dollars or units " to be coined, to be each of the value of "a Spanish milled dollar." The coins n)inted under this law contained 3711 grains of pure silver. Thus the monetary unit of the American States was changed from 54 pence sterling to 51} pence sterling. But the ideal dollar of exchange between Great Britain and the United States remained unchanged at 19 -aAXD-BOOi OF FINANCE. 54 pence sterling, and formed the basis for the calculation of sterling exchange in the United States until such calculations were forbidden by the law of Marcl 3, 1873 (see Coinage Laws). There are 240 pence in a pound sterling, and to make it the equivalent of $4.44 4-9 (the old method of estimating, the value of a pound in dollars) the dollar must contain 54 pence. But the Amnerican monetary unit the silver dollar of the value of a " Spanish milled dollar"-was worth onlv 514, pence sterling, and was thus 41 per cent below the standard of the ideal dollar of exchange; hence in all payments it was necessary to add 41 per cent nominal premilum. This continued until lS37, when the bullion value of all American gold coins was reduced. The eagle, which under the law of 1792 was to contain 24721 grains of pure gold, was reduced in value so as to contain only 232.200 grains of pure gold. (See Digest of Coinage Laws.) But, while the monetary unit of the United States continued to be the silver dollar, both gold and silver coins were a legal tender, and the gold dollar being reduced in bullion value below the silver dollar, all debtors exercised their legal option of paying in gold instead of silver dollars. The bullion value of silver coins being greater than their legal tender value, as compared with the gold coins, the former passed out of circulation and were exported, leaving the gold coins as the principal part of the metallic currency in the United States. This was found so great an inconvenience that by the law of February 21, 1853, the silver fractional coins (but not the silver dollar) were reduced in weight, and thouglh they were declared to be legal tender for no more than five dollars, their legal tender value was so 20 THE DOLLAR AND OTHER UNITS. much greater than their bullion value that they remained in the country until the issue of legal tender paper money in 1862. The change from an almost exclusive silver metallic currency to one of gold in 1837 was not, as is frequently supposed, the result of a demonetization of silver, but only of the exercise of the leg,al option of all debtors to pay debts in the cheapest one of two legal tender metals. A similar change (except that it was from gold to silver) took place in France in 1785.-' In 1857-8 a somewhat similar change was made in Austria. By an imperial decree the value of the monetary unit, the silver florin, was reduced from 48~ cents in American silver dollars to 45Ta. Silver was estal)lished as the only legal metallic currency of the enipire, though gold was also to be coined for commercial purposes. But the American gold dollars measured by the silver dollar of exchange (54 pence) were 9i per cent below par. Hence in foreign payments it was customary to add 91 per cent nominal premium to the $4.44 4-9, which was presumed to be the equivalent of a pound sterling. Seeing that none of our own coins nor those of other nations now in circulation agree with this standard of 4s. 6d., the query naturally arises as to how it came to be adopted. A complete answer to this requires a (iance into history. * In France a different valuation of the metals has had a different effect. Previously to the recoinage in 1785 the louis dl'or was rated in the mint proportion at only 24 livres, when it was really worth 25 livres 10 sols. Those, therefore, who should have discharged the obligations they had contracted by payment of gold coin instead of silver, would plainly have lost 1 livre 10 sols on every sum of 24 livres. In consequence, very few such payments were made; gold was almost entirely banished from circulation, and silver became almost the only species of metallic money used in France.- SAY, T7,aite d'Ecoiwnie Politique, tom. i, p. 393. 21 HAND-BOOK OF F1NANCE. In a leiuoe little valley ill Bohemia in 1518, tlhe Count of Schlick began to coin silver pieces of an ounce weight. These were not only of uniform - w'eighlt and fineness, but they soon became very numerous. The traders of the time were in wNant of some international standard, fixed at least by common honesty as a measure of tl-he value of other coins; and these coins soon became in good repute all over Europe under t]e names of Schlickten thalers or Joachiin's thalers -te first from tile iiame of the Count of Scliickl, and tlhe second firoi Joachims-t/al or Joachimn's valley, w]lere they were coined. These names soon became sylnonyms for honest coins of full weight and value, but after a time tlhe name was abbreviated, and the word thaler (literally, in this connection, " qalleyer") was combined with other words to designate the established coins of various natio()ns, which, though not of the same wei(ght and fine~iess as the Schlickteni thalers, were of uniform weiglht ald fineness. Thus originated the German th/cler, the Low German (rahler, the DanIish and Swedish dalers, tlhe Italian tolle,o, and the miore widely known dollar. When the idea of a characteristic name for honest eoins crept over into Britain it foiund,a word there already coined for its adoption, viz.: the word' dollar." fiom the Gaelic dol, a valley, an(d ard, a }ill, signifvinig in a valley shut in bv hills, and there is yet in Scotland, near Clackmanan, a little valley parish and a village called Dollar. Although there were no coins minted in England called dollars, there were many foreign coins of different values, from the various national mints of Europe, circulating there under the common name of dollars,. Shakspeare uses the word twice (once in Measure tfor 22 THE DOLLAR AND OTHER UNITS. Measure and once in NMacbethl), and there is plenty of evidence that the term' dollars," as applied to coins, was in common use there previous to 1600. Some common measure or standard for these dollars was necessary as a matter of convenience, and Spain being then the leading country of Europe, her piasters of eight rieals - called also pieces of eight" -being ill more general use than any other toreign coins, were adopted as thle standard dollar. Buit previous to this, in 1519, vllell Charles V, king of Spain, became also eiiipereor of Gerniany, he had adopted a new coat of imperial artis, in which those of Spain were quartered withl those of the empire, and had stamped this new (levice on the coinage of Sl)iii, the pillars in the device gi\ving rise to the namne of'"pillar dollars"- this parti(ular coin being then known in Spain as colonato. These dollars were from the mint of Seville, and in tile table of "silver coiiis of the world," made iby Sir Isaac Newton -when assayer to the British Knigt, are set down at the exact value of 54 pence. This and the old Fren(1i ec% of albout the same date, are the only coins of that exact value in the whole table. Thus that which was knownr in Englaid as a dollar, and as our dollar of exchange, is the adaptation of an idea of German origin to a Gaelic word and a Spanish coin. The dollar of 54 pence is an instance of that ideal monoey, or money of exchange, which has no existence il fact, but is used in calculating nearly all international exc-anges.* With many nations, as with our own, it dliffers from the money used in domestic accounts, and * Professor Sumner, in his History of American Catrrency (page 103), is mislalken in saying: " It is not known how this ratio ($4.44.44 to the ~1) was determiued." It is very plain that it was determined as I have described above. 23 HAND)-BOOK OF FINANCE. almost universally differs fiom the coins in use. Coins being national, and in a great measure local, are subject to alterations and debasements by governnenits; but moneys of exchange, though rarely established by desi,gn, become widely established by the mutual consent f nations for convenience, and are in a measure beyond the reach of legislation. While we, through Engislis custom, had taken our ideal dollar from the Spaniiish dollar of Charles V, custom has established in Spain itself a different ideal dollar. The "peso duro," or " hard dollar," was once a Spanish coin of eight reals, but was afterward altered to a greater value of ten reals. The first coinage of the "hard dollar," however, had been accepted by other nations as the standard of exchange with Spain, and though the value of the coin was altered so that eight hard dollars were worth teii and five-eighthls dollars of exchange, the ideal dollar remained unchanged. The ideal unit of values in the United States until 1873 was a dollar of 511 pence, and the ideal dollar of exchange adopted in London was 54 pence. Olir coinage never agreed with either of these values. But ill 1816 a new monetary system was adopted in Great 13Biitain, and it was enacted that gol(l co;i.s8 only s/lottl(l be legctl ten,der in all p)ayments, and that silver coins should be legal tender for only 40s.* The original pound of silver which previous to 1816 was coined into 62 shillings was then coined into 66 shillings. and the * From 1664 down to 1717 the relation of gold to silver was not fixed by authority, and silver being then ihe only legal tender, the value of gold coins fluctuated according to the fluctuations in the relative worth of the metals il the market. In 1717the ancient practice was again reverted to, and it was fixed that the guinea should be taken as the equivalent of 21 shillings, and conversely. — lc Culloch's Comrrmercial Dictionary, page 352. 24 THE DOLLAR AND OTHER UNITS. sovereign was declared to be a pound. Thus the monetary unit of Great Britain agrees with its principal coin. By the coinage law of February 12, 1873, the monetary unit of the United States was changed from a silver dollar of 412-2 grains standard (3711 grains pure) silver to a gold dollar of 25 8-10 grains standard gold, and the legal tender function of all silver coins was reduced to five dollars. But as far as the half dollars, quarters and dimes were concerned, this was only a reiteration of the lawof February 21, 1853. By the law of July 13, 1876, the trade dollar was declared not to be a legal tender at all. As shown in the preceding pages, the only "dollar" known in British finance was the dollar of 54 pence. This was distinctly defined by a proclamation of Queen Anne in 1704, to the effect that the Spanish and Mexican "pieces of eight," or dollars, were of the value of 4s. 6d. When, after 18C)0, the bonds of the United States payable in "dollars" were put upon the London market, though issued by a government whose nominal unit of values was a dollar of 514 pence, English brokers and bankers, still adhering to their old established idea of a dollar as the equivalent of 54 pence sterling, quoted the market prices of Unites States bonds in dollars of 54 pence. Thus when the bonds were really at par they were quoted in London at 91.33, this being the equivalent of a dollar of American gold expressed in the old dollar of 54 pence sterling. This custom was maintained in London until December 30, 1873, when a new "dollar" offo?ur 4hillinqs having been adopted by the London Stock Exchange, United States bonds were, and are yet, quoted in that ideal standard. This new dollar is not represented by any coin of any 2 25 HAND-BOOK OF FINANCE. nation, and is the equivalent of 96 cents and 96 hundredths of a cent ill American gold. It will thus be seen that while the old London quotatioIns made United States bonds appear to be nearly 8 per cent lower thani they were in fact, the new Stock Exchange dollar makes them appear to be about 3 per cent higher (ill London) than they are in fact. By this rule of the Lonldon Stock Exchange, and by the United States law in regard to the computations of sterling exchange, the old "dollar" of 54 pence appears to have passed entirely out of use as an ideal standard. This dollar, however, should not be confused with the American silver dollar established as the unit of values by the law of 1792, and which remained as such until abrogated by the law of February 12, 1873. Iil Frankfort the quotations of the market prices of United States bonds are made in still another assumed "dollar," which is the equivalent of 414 marks. The gold mark being equivalent to 23 8-10 cents in Anmerican gold, makes the Frankfort stock exchange dollar, used for quoting United States bonds, equal to $1()03.()5 in American gold. The Frankfort quotationis, therefore, for United States bonds make tlhemt appear to be nearly 3 per cent lower than they would (quoted in American gold dollars. Still another fact complicates the foreign quotations for Ainerican bonds, viz.: In London the bonds are quoted "flat"; that is, including accrued interest to thle date of quotation; while in Frankfort they are quoted exclusive of interest.* * The following practical illustration of the various methods of quoting United States bonds in European markets is furnished by a banker for this publication: "London assumes in the calculation of American bonds the gold dollar at 4 26 PAPER MONEY AND COIN IN THE UNITED STATES. IhERE has been no politico-economical question so 1much discussed in the United States during the last tel years as the amount of the outstanding volume of currency, and none which has been so miuch mnisrepresented. The public mind having been concentrated upon the "currency question," the opposing political parties have continually ascribed all changes and crises in comnniercial and industrial affairs to changes ill the volume of the currency of the United States. They have started out in all cases with the erroneous assliuinption that the foundation of all the prosperity, or the cause of all the depression- as the case niay have been - experienced in the last ten years, was to be found in shillings including coupon. If, therefore, say, on the 28th of August anew 5 per cent bond is quoted in London 107 (while demand sterling in New York is 4.89) a $100 bond will cost: 107x4 shillings ~21 8s. g 489.................................... $104.65 gold. " Frankfort assumes in the calculation of American bonds the gold dollar at 4i marks exclusive of coupon. The above bond quoted in Frankfort Aigust 28 at 103Y4 (while demand exchange on Germany in New York is 95% cents gold per 4 mark) will cost: 103Y X44 mark 438.81 @ 95Y.....................................$104.49 gold. Accrued interest, August 1 to 28..................................... 41 $104.90 -old. "On the same day new fives were quoted in New York 116Y. Gold being then 111, made the bond worth $104.95 gold. This comparison, based on actual market reports, will show the quotations of 103Y in Frankfort, 107 in London, and 1163 in New York to stand very near to each other. It may be added that Paris assumes the gold dollar at 5 francs including coupon, while Amsterdam assumes it at 2Y~ guilders excluding coupon. Berlin and the other German places figure exactly the same as Frankfort." HAND-BOOK OF FINANCE. either the contraction or the inflation of the paper currency of the United States. In accordance with this narrow view of finance the partisans of one party or another have been continually printing in pamphlets and newspapers tables and estimates of the volume of currency in existence at one time as compared with another. The fault with all these estimates and tabulations has been that they have been made to sustain a preconceived theory of the causes of the changes in the financial situation at various times. The facts have in all cases been made secondary to the theories, and consequently only such facts as sustained the theories have been griven, while all others- which in many cases, if fairly stated, would have completely upset the theories -have been omitted. A great majority of the misstatements of the volume of currency in circulation have probably not been intentional; they are due simply to that proneness of all men to rest satisfied when they have found certain facts to sustain their preconceived notions. Indeed, the believers in theories founded upon a few indisputable facts, but ignoring others of equal importance, are always most thoroughly convinced of the truth of their own doctrines. Out of just such half-truths have arisen all the great errors of mankind on any subject. It is an error to presume that the apparent prosperity - the "flush times" experienced in this country from 1867 to 1872- were due entirely, or even very largely, to a greater volume of currency then than now. A broader view of finance would show that the progress of financial affairs in the United States has been in accordance with the general situation throughout the commercial world, and as this little book is intended as a handbook 28 PAPER MONEY AND COIN IN THE U. S. of financial facts rather than of theories, the following table of the various kinds of paper currency in existence in the UJnited States each year since 1853 has been compiled, in order, if possible, to remove the question of the exact amount of currency in circulation each year from the confusion to which it has heretofore been subject. The propriety of including the 7 3-10 per cent notes, the compound interest notes, the 3 per cent certificates, and the various other forms of unfunded debt of the government among the forms of currency, will doubtless be questioned by some; but it is well known that all these did circulate to a large extent as money, though not so rapidly as the non-interest-bearing treasury notes. Reference to the law authorizing the 7 3-10 per cent notes will also show that they were intended to circulate as money; the Secretary was authorized to issue them as legal tender to all creditors for the amount of the principal, together with the interest accrued on any such note at the date of tender.* A large proportion of the $67 2,578,850 of 7.30 notes, and the $159,012,140 of compound interest notes, outstanding on July 1, 1865, were issued under authority of the law of June 30, 1864, which made them a legal tender for the face value of the notes and the accrued interest. The 3 per cent certificates, also authorized by the act of Marcl] 2, 1867, were intended as a substitute for $50,000,000 of United States notes, which were by that means released from the vaults of the national banks, where they had been held according to law as a reserve against circutlation and deposits. These certificates were therefore practically an addition of $50,000,000 to the currency in 1867. * See Digest of Laws, Act of June 30, 1864, and March 3, 1865. 29 HAND-BOOK OF FINANCE. While there may be some reasonable question as to the propriety of regarding the 7.30 notes and the compound interest notes as an addition to the volume of currency to the full amount of their issue, there call be no doubt that a just estimate of the volume of currency in use each year must take them into the account at some ratio of the total amount outstanding, even if it be not miore than two-thirds their face value. As to the 3 per cent certificates, there can be no question that they were an addition to the volume of currency to the full amount of their issue. They were unlike the present non-interest-bearing certificates issued to the banks, because no special reserve of United States notes was held in the treasury for their redemption, whereas the United States notes received for the present certificates are held as a special deposit in the treasury, and are not used for anyv other purpose than the redemption of the certificates.* ENven if the practical effect of the 7.30 and compound interest notes to increase the volume of paper money be estimated at no more than one-half their nominal value, and if thie total volume of bank notes and i unfunded debt circulating as money in 1866 be estimated as equivalent to no nmore than $1,3()00,000,000, thus making a deduction of $500,000,000 for the amount of such notes that would not circulate to any considerable extent as mnoney- even with this deduction, it will be seen that the period of greatest contraction in the paper money circulation of the United States was from 1866 to 1869. Blut there is still another and even mo()re important point to be considered in c'liitct(tio(n with the contrac * See Act June 8, 1872. 30 PAPER MONEY AND COIN IN THE U. S. tionI from 1866 to 1869. The war of the rebellion closed in 1865. Previous to that time there were twelve of the Southern States, viz.: Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, North Carolina, South Carolina, Tennessee, Texas, Virginia and West Virgillia, from which national bank notes and United States notes of any sort were practically excluded. These twelve States had a population in 1870 of 9,999,401. Ini the immediate vicinity of the armies of the United States in the border States, such as Tennessee and Virginia, there would of course be a large circulation of United States notes, but with the great bulk of the nearly 10,000,000 of population in these twelve Southern States United States notes and national bank notes were almost unknown until the close of the war. Until 1866 therefore, the entire amount of paper money included in the table was practically confined in its circulation to the population of the Northern and Atlantic States, a population which, from 1865 to 1866, probably did not exceed 23,000,000 to 24,000,000, and was only 27,000,000 in 1870. It was not until 1867 that the rehabilitation of the South began to draw much capital from the Northern States, and the aimount of currency in the Southern States even in that year could not have been over one third as much per capita as in the Northern States. It is fair to presume, however, that by 1869 or 1870 the greatest effect of thl)e new requirements of the people of the Southern States for currency had been experienced, and that fromn 8,000,000 to 10,000,000 more people were using United States and national bank notes as their only currency than in 1865-6. These facts will show the unrelial)ility of ally of the usual estimates of the amount of currency per capita in 31 HAND-BOOK OF FINANCE. the United States based upon the entire population. There are so many elements to be considered that it is doubtful if ainyv estimate of the amount of currency per capita of the population using it can be made that will not be open to criticism. The table given on another page shows, however, conclusively that the period of greatest contraction of the paper money of the United States per capita of the population using it was firom 1866 to 1869-70. It is therefore to be presumed that if the amount of paper money per capita of the population had been the controlling element in the stimulation or the depression of inidustry, improvements and trade, as is popularly believed, the most positive evidences of such depression fi'oi a scarcity of the currency per capita of the populationi would have been experienced from 1866 to 1870. But it is well known that this was popularly regarded as a period of unexampled prosperity in the United States. The increase of railroad mileage was greater each year during the whole period; beginning with an increase in 1866 of about 3 per cent on the mileage of 1865, the ratio of increase was greater each year afterward until, in 1871, it was over 12 per cent onI the mileage of 1870; prices (in currency) of nearly all commodities advanced largely during tihe first il-lf of the period and were maintained duiring the latter half, notwithstanding a decline in the average annual price of gold from 140 in 1866 to 123 in 1870. Values of real estate also, throughout the colmntry, increased during the whole of the period in question. It is therefore plain that whatever would otherwise have been the effect of the great contraction of the currency from 1866 to 1870, it was neutralized and overcome by some more general and potent cause, 32 PAPER MONEY AND COIN IN THE U. S. which, it seems to the writer, is to be found in the increased production of gold and silver at the beginning of the period in question, and the effects of the three great wars of the preceding six years. Not only does the increased production of the precious metals at that period afford some explanation of the universal stimulus given to trade, enterprise and speculation fron 1867 to 1872, but the decrease in the production of the same metals affords the clue to the causes which resulted in the crisis of 1873. The following table gives the amount of each kind of treasury paper, as well as the amount of bank notes, in circulation each year, and also the aggregate of both each year, fromn 1854 to 1876: NOTES TO TABLE ON FOLLOWING PAGE. * The amounts given for the bank note circulation in the United States about the 1st of January each year for the years 1854-55-56-57-58 are taken from a report of the Secretary of the Treasury, and were published in a tabulated form in Hunt's Comnmercial Magazine for March, 1857. t The circulation of the State banks in 1863 was given in the report of the Comnptroller of the Currency for 1873, and the above amount was obtained for that publication from page 210 of the report of the Secretary of the Treasury on the condition of the banks at the commencement of the year 1863. The returns from Delaware, Maryland. Louisiana, Tennessee and Kentucky were not complete. The aggregate amount of State bank circulation reported at that time was much greater than at any previous period. The $45.449.155 of State bank circulation given for January 1, 1866, is the amount of State bank notes reported by the national banks, which at that time had recently been reorganized as such from State banks. But as there wvere still other State banks in existence, it is probable that the $45,449,155 was considerably below the aggregate of State bank notes in existence at that date. 33 AM()ITNT OF' FACTI KIND OF PAPER CURRENCY IN THE UNITED STATES EACIt YI -,,P I. c. -- ~, cd -,P , ........... ........... ........... ........... ........... ........... 107,'628,096 259,168,327 233,059,191 205,489,061 147,567,196 20,261,070 13,815,029 198.310 186.310 85,370 8.3,500 83,500 83,500 8,060 8,060 <.. 1856. 1854.............. 1858............. 1859............. 1860............. 1861... 20.153,455 1862...' 2,849,112 1863.... 897,912 1864..., 278,512 1865... 118,912 1866... I 117,512 1867... i 110,712 1868...l 110,512 1869...l 108,212 1870... 94,825 1871... 94'850 1872. 94,750 1873. 94,675 1874... 94,575 1875. 94.575 1876... 94,525 o Pz ,:h . ~g0 4', r O . It p, 10 ., 0a z r.,o 4 O 0 P oQ 1....... ........... 1857~~~~~~.............. ............... I............ 1861.......1. ................................ ................................. ........... 122,836,550 ........... 139,970,500 153,471,450 109,356,150 42,338,710 672.578.850 3,454,2001 806,900,750 1,123,9301 488,647,140 555,4921 37,717,650 347,772 1,166,500 2 48,272 641,000 213,348 475,900 206,817 352,150 142,105 293,450 127,565 247,650 113,375 213,900 104,705 199.850 I I I I I P? 4.<.,5, 4 0 .; EZn o z o. ._ .q 11 1.11 ........... ........... ........... ........... ........... ........... ........... ........... ........... 15 000,00( 193,756.08C 159,012,14( 122.394,48( 28,161,81( 2,871,41( 2,152,91c 768,50( 583,52( 479,40( 415,21( 367,39( 328,76( .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... 50,000,000 52,120.000 45 545,000 31.863,000 12,220,000 30,000 5,000 5,000 5.000 20,192,4.' 22,904,8' 24,915,8" 27,070,8' 27.,830,7,' 32,6279.9' 32,114,639,878, 40,582,8' 40,855.844,799,3( 45,.961,2f 42,129,4',~ 34,446,5f ........... ........... ........... ........... ........... ........... ........... 150,5;,0 381,997,589 431,959,670 433,160,569 400,891 367 371.992,029 356,141,723 356,123,739 356,106,250 356,096,506 358,188,206 356,079,967 382,076,732 375.841,687 369,839,201 ....... ........... I PAPER MONEY AND COIN IN TlTHE U.S. COIN IN THE UNITED STATES. f the amount of coin in the country fromt 1854 to 1876: Total in the Coin in Banks. Country. 1854................................. 1855................................. 1856................................. 1857................................. 1858................................ 1859................................. 1860................................. 1861................................. 1862................................. 1863................................. 1864................................. 1865................................. 1866................................. 1869................................ 1870 (October)........................ 1871 (October)........................ 1872 (October)........................ 1873 (October)........................ 1874 October)........................ 1875 (October)........................ 1876 (June)......................... The estimates of the amounts of specie ill circulation in the whole country at any period must of course always be open to criticism, for the reason that no exact statistics are possible. From the period fromi 1854 to 1859 the only trustworthy figures are those given in the annual reports of the Secretary of the Treasury, showing the amount of coin held by the banks on or about the 1st of January each year. These have been used as a basis of approximation to the whole amount in the country for that period. For the period froin 1870 to 1876 the data are more definite. There are only three items worthy of con 35 $59,410,000 55,945,000 59,714,000 59,272,000 60,705,000 .......... .......... .......... .......... .......... .......... .......... 6 00 000 6,000,000 5,000,000 5,000,000 5,500,000 5,000,000 6,000,000 $240,000,000 ........... ........... .......... 275, 000,000 ........... ........... ........... ........... ........... ........... .......... 121, 000,000 116,000,000 102,000,000 109,000,000 110,000.000 100,000,000 102,000,000 41 HAND)-BOOK OF FINANCE. sideration in the estimation of the amount for each year, viz.: the amount in the national treasury, the amounts in the national and commercial banks of the entire country (including all conmmercial banks on the Pacific coast), and the amount in circulation in the Pacific States and Territories.* (The savings banks hold scarcely any coin.) The actual amount of coin in the treasury of the United States each year, on October 1, was as follows, viz.: 1869, $108,800,000; 1870, $96,000,000; 1871, $90,500,000; 1872, $78,000,000; 1873, $80,300,000; 1875, $67,833,316; 1876 (June 3), $73,625,584. According to the report of the Comptroller of the Currency for 1875, the total amount of nominal "coin" held by all the national banks of the United States on October 8, 1870, was $18,460,011. Of this amount $13,135,649 was held by banks in New York city. But of this $13,135,649 only $1,607,742 was actual coin, all the rest being United States coin certificates and checks on other banks payable in coin. Upon this basis the amount of actual coin held by all the sixteen hundred national banks of the United States in October, 1870, could not have exceeded $2,200,000 - this amount ineliding all sorts of coin. Allowing $1,000,000 more * The relative proportions of the banking business in the United States, transacted through the different classes of banking institutions, may be estimated by the following statement of the whole number of banks of each class, and the aggregate of deposits in each in the year 187.-: No. of Aggregate Banks. of Deposits. National Banks......................................... 2,087 $743,088,815 *State Chartered Commercial Banks.................... I *1,000' *200,000,000 *Savings Banks........................................ *800 *1,000,000),0O *Estimated. $ 1,943,088,815 36 Class of Banks. A PAPER MONEY AND COIN IN THE U. S. for the amount held by all other banks, not national (exclusive of the Pacific coast), and we have not to exceed $3,200,000. Estimating still $3,00()()0,0()00 more for actual coin in the banks in California, it would leave a little over $6,000,000 as the aggregate of all coin in all banks in the UInited States and Territories in October, 18i70. The amount of coin in the treasury of the United States October 1, 1870, was $96,000,000o. If we make the very liberal estimate of $20 per capita for the 971,321 of the entire population of California, Nevada, O)regon, Arizona, Colorado, Idaho, Montana, New M,exico, Utah, Washington and Wyoming in 1870, it gives $18,426,420. Add this to the coin ill the treasury and in the banks, and we have an aggregate of $120,826,420, say $121,000,000, as the entire stock of coin in the United States and Territories on October 1, 1870. On October 3, 1872, the amount of actual coin held T)y the national banks of New York city was only $920,767 (see report of comptroller for 1873, page 44), and on thie same basis the total amount held by all the eighteen hundred and fifty nationa.l banks of the UInited States could not have exceeded $1,200,000, which would give a little over 84,000,000 for all banks in the UITnited States and Territories. The "specie," as reported to the comptroller by the national banks of the United States on October 1, 1875, was classified as follows, viz.: actual coin, $3.,364,569; United States coin certificates, $4,485,760; total, $8,050,329. 37 PAPER MONEY. BANK NOTES. ANK notes were not at first, as most people pre sumle, an invention to increase the amount of money ill circulation, but grew out of the necessity for sonme standard by which to regulate the value of coins. During the sixteenth and seventeenth centuries, as explained in the first chapter of this book, the debaseinents of the coins by different monarchs of Europe were so frequent and so great that merchants and traders had 1no safeguards against loss but continual resort to the assayers. These sometimes disagreed, and some authority of wider jurisdiction than the illdividual assayer was required. Banks had already beenii devised * as a means of assisting governments to secure the united co-operation of the people in the fitlances of the states, and in the exercise of this filnction it became necessary that each of the great banks should also fix the values of all home and foreign coins. The universal rule for this valuation was to receive all coins at the value of the pure gold or silver in them as compared with an ideal standard, viz., a specified number of grains of gold or silver, to be called a "ducat," a " florin," a " pound," or a "dollar." In most cases this ideal coin at first * Bank of Venice, founded in 1157; Bank of Barcelona, in 1349; Bank of Genoa, in 1407; Bank of Amsterdam, in 1609; Bank of Hamburg, in 1619; Bank of Sweden, in 1656; Bank of England, in 169.4. PAPER MONEY. corresponded to the principal national coin of the country in which the bank was located. But as the actual coins were debased from time to time, their value fell below that of the ideal coin accepted by the bank as its standard, and, in some cases, particularly that of the Bank of Venice, many of the foreign coins were received at valuations higher than warranted by the value of pure gold or silver in them. But these various coins once deposited with the bank the account was turned into "ducats" and the depositor credited with so many "ducats" of the ideal standard established by the bank. The amount thus credited, or any part of it, was transfeiable on the books of the bank, at the optioili of the depositor, to any other person to whom he might desire to pay money; but the money could not be withdrawn. The depositor thus got the benefit of a premium on nally foreign coins which was not warranted by the value of the pure gold or silver in them. But this last mnentioned inducement to deposit money in bank was peculiar to the Bank of Venice, and was one of the secrets of its popularity and good credit for so many years. The object was to secure the coin for the governinent, and the deposit was practically a subscription to a national loan. In the twelfth and thirteenth ceitturies, when the common rate of interest ranged from 15 to 25 per cent per annum, the loss on these coins, received at an overvaluation by the bank, was considered a small rate to pay for the use of the money for the state. But aside from this there was the consideration to the depositor in other banks as well as that of Venice, that he was at once assured of the value of the coin he received. The credits at the banks, instead of being only on the books and transferable by order, 39 HAND-BOOK OF FINANCE. were soon made in the foirm of certificates of deposit, transferable by indorsement; and this suggested to a Swede named Palmstrucek, who founded the Bank of Sweden, the idea of making the certificates in uniform amounts and the deposit payable to any holder, witlhout indorsement. This conception was elaborated into the present bank note, the first note having been issued bv the Bank of Sweden in 1658. "An enquete made by the French government, in 1729, recognizes the priority of Sweden in this matter, and declares the bank note to be an admirable Swedish invention, designed to facilitate commerce." * BANKS IN GREAT BRITAIN AND IRELAND. The Bank of England, founded in 1694, originated in the necessities of the government, then at war with France. William Paterson, a London merchant, conceived the scheme of organizing a bank to receive deposits and assist the government with money. The capital of ~1,200,000 was raised by popular subscription, and it was provided that the whole of this should be permanently loaned to the government at 8 per cent per annnum. The bank immediately issued notes of the denomination of ~50 and upward. As there was no legal limit to the amount of issue, they soon depreciated, and in 1697 it was found necessary to increase the capital stock by ~1,000,000. This was paid into the bank, and, for a short time, was not loaned to the government, and the effect was to cause the notes and the stock (which latter had fallen to 40 per cent discount) * Palgrayes' Notes on Banking, page 87. 40 PAPER MONEY. to appreciate to par. In 1844, an act was passed dividing the bank into two departments - the issue and the banking - the object of which was to prevent the issue of notes without a sufficient reserve of specie to redeem tien. At the time of the division into the two depart-meits the aggregate of permanent loans made by the bank to the government was ~11,015,000. This debt was now declared to be due from the government to the issue department, which was authorized to issue notes to circulate as money to that amount. But some of the provincial banks had also been authorized to issue notes to a limited extent on the deposit of securities, and it was provided in the act of 1844 that whenever any of these provincial banks diminished their circulation permanently, firoom any cause, their right to issue notes on the deposit of government securities should accrue to the Bank of England, but that the latter bank should only issue two-thirds as much as the amount which the provincial banks should cease to issue. Under this arrangement the amount of "permanent issue" had increased to ~14,475,000 in 1858. For the notes issued under the foregoing provisions no reserve of specie is required, but for every other note more than are issued as above, coin or bullion must be paid into the bank before the issue of the note. There is no distinction in the appearance of the two classes of issue; but when gold is wanted from the bank for any pur pose, the notes are presented at the issue department, and, upon their redemption, are at once destroyed, and for every new deposit of bullion or coin, new notes are issued to the bankin.y department. Besides tht B3ank of England tiere, were in England, in 1872, 116 joint stock banks with 1,007 branches. 2* 41 4HANID-BOOK OF FINANCE. In Scotland In 1825............ there were 34 banks, having 133 branches. In 1850............. " 18 " 382 In 1859............ " 583 " In 1872.............. " 11 "801 " In Ireland, in 1872, there were 9 joint stock banks with 305 branches. The following shows the relative position, in 1874, of the Bank of Enlgland, the Lonldonl joint stock banks and the Scotch joint stock banks:* Capital and Surplus. Bank of England..................... ~18,300,000 London joint stock banks............. 12,500,000 Scotch joint stock banks.............. 14,000,000 Pr ivate Deposits. ~19,630,000 96,900,000 77,500,000 * In an article by Mr. Charles Moran, in the New York Bulletin, in September, 1875, is the following succinct statement of the gradual development of the Bank of England: The capital of the bank was increased - In 1709 and 1710 to....................................................~5,560,000 In 1722 to............................................................. 8,960,000 In 1742 and 1746 to................................................... 10,680,000 In 1782 to................................................. 11,742,400 In 1816 to.............................................................. 14,553,000 All the above accessions of capital were loaned to the government. The following shows the gradual increase of the business of the bank: Deposits. Securities. ~6,443,000 ~14,810,000 8,355,000 22,138,000 13,618,000 40,974.000 12,696,000 44,854,000 6,410,000 25,105,000 6,254,000 22,075,000 19.666,000 1 31.908,000 24,840,000 32,720,000 Circulation. 1793........................ ~10,865,000 1800........................ 15,047,000 1810........................ 24,794,000 1815........................ 27.249,000 1825........................ 19,399,000 1840........................ 17,170,000 1865........................ 22,450,000 1875...................... 27,280.000 The circulation, in 1875, is only equal to what it was in 1815. The deposits are about doubled, while the bullion has increased about seven-fold, and yet the securities held by the bank in 1875 are only ~32,720,000, against ~44,854,000 in 1815. These figures show clearly that the Bank of England has not kept pace in its operations with the vast increase of the production and commerce of Great Britain in the past sixty years. But the Scotch banks are the most successful institutions of the kind that have ever existed. Until 1845 they were almost entirely exempt from legal 42 Bullion. 95,322,000 5,150,000 3,192,000 3,409,000 3,634,000 4,99,000 14,557,000 22,390,000 PAPER MONEY. TABLE OF PAPER MONEY IN GREAT BRITAIN AND IRELAND. Notes of the Bank of Englaniid, the B:iiik of Ireland, and of all joint stock and private banks in circulation at various periods: All other Total in Bank Notes. Circulation. ~17,960,307 ~38,258,307 17,447,513 38,054,513 18,225,892 43,387,872 ................... ......................... ............................... ......................... .................... .................... ...................... ................. I..... ................ Date. 1854 Dec. 23............ 1863 Dec. 13............ 1872 Dec. 28............ 1873 Dec. 23........... 1874 April 1............ 1874 June27............ 1874 Oct. 2............ 1874 Dec. 23........... 1875 April 1............ 1875 June25............ 1875 Oct. 2............ 1875 Dec. 23........... 1876 Mch.29............ 1876 July 5............ FRANCE. The Bank of France was organized under that name in 1803, but had previously existed as the Royal Bank. It is a government institution, the government having the appointment of the governor of the Bank and two of the directors. Its issues are not limited by law. There are, in all, sixty-two branches of the Bank of France in the various cities. Amount of the notes of the Bank of France in circulation at various periods from 1854 to 1876, expressed in their equivalent in American gold dollars: restrictions and governmental control. They were limited neither as to their capital, the number and location of the branches they established, the number of their shareholders, nor the amount of their issues and discounts. From 1800 to 1814, owing to the scarcity of coin, they issued notes as low as three shillings sterling. In 1826, out of a circulation of ~3,309,000, ~2,079,000 were notes under ~5. In 1836, out of a circulation of ~3,800,000. two-thirds were under ~5. 43 B'k of England I Nlotes. 20,298,000 20,607,000 25,162,000 25,787,168 27,014,407 26,250,855 27,666,229 26,122,235 26,929,025 27,377,405 29,421,467 27,427,109 26.821,875 28,408,850 HAND-BOOK OF FINANCE. 1854.............................................. $122,908,040 1863............................................. 157,261,400 1 865.............................................. 168,000,000 1870 (January).................................... 297,000,000 1871 (November).................................. 460,000,000 1812 (January 31)................................ 490,000,000 1872 (NovembFJ 1!................................ 503,982,000 1873 (January 1).................................. 541,890,000 1873 (February 1)................................ 551,124,000 1875 (January 9) 2................................. 528,650,000 1876 (January 28).................................499,600,000 1876 (June 1)..................................... 493,395,000 (,ERMAANY. The monetary sy stem of the German Empire has been completely reorganized in the last few years, the laws previously passed for this purpose having gone into effect January 1, 1S76. The changes made were, first, the adoption of the exclusive gsold standard, with the gold mark of the value of 2,"8) cents (in United States money) as the unit of values. Previous to this the unit was of silver, though both gold and silver were legal tender, thle laws on these points being substantially the same as in the United States priio' to 1873. The main points in til re-orlganiizationI of the banking system of the empire, and the re,gulation of the issues of paper money, the laws for which went into effect JaiuaryI 1, 1876, were as follows: The imperial bank law decreed the formation of the "Entl)ire Bank" at Berlin, withl branches in all othler inmportant places in the empire. Besides all the ordinary business of a great commercial balnk, the Empire Bank exercises, according to the imperial bank law, the function of " regulating the circulation of money inI the whole o)f the German Empire." The Bank of Prussia 44 PAPER MONEY. was absorbed in the Empire Bank, and all the remaining thlirty-two provincial bailks were embraced in the regulations of the imperial bank law. The total of thirtythree banks (including the Empire Bank) are authorized to issue an aggregate of 385,000,000 marks. (equal to 891,630,000) of what is called "uncovered circulation." Of this 385,000,000 marks of circulation, 250,000,000 (equal to $59,500,000) is apportioned to the Empire Balnk, which may issue such portion of them as its business requires. The remaining 135,000,000 marks is apportioned to the thirty-two provincial banks according to their capital and business. The term "uncovered circulation," as currently used with reference to the above aggregate of circulation for the German banks, is liable to be misunderstood. The Empire Bank and the provincial banks are required to hold a reserve of 33* per cent against all the circulation they issue. This 331 per cent must be, according to the text of the imperial bank law, either "in German currency, in legal tender notes of the empire, in gold bars, or foreign coins valued at 1,392 marks for a pound of gold." This "uncovered circulation " is, therefore, unlike the ~14,750,000 of "permanent circulation" which the Bank of England may issue without any legal reserve. But the 385,000,000 marks is not the final limit of the volume of paper money in Germany. It is provided in the imperial bank law that "banks whose note circulation exceeds their 33~3 per cent reserve and the respective aiounts assigned to them (as their portion of the 385,000,000 marks) shall pay yearly to the Exchequer on the excess a tax of 5 per cent, dating from the 1st of January, 1876. It will be seen, therefore, that the provincial banks have the privilege of issuing in excess of 45 HAND-BOOK OF FINANCE. their prescribed amount, and in excess of their reserves, by the payment of 5 per cent tax on the excess. The Empire Bank and its branches, and the provincial banks and their branches, are required to accept at par all German bank notes, but the notes so accepted "can only be used either in presentation for redemption by the bank that issued them, or as paymnents in the town where the bank which has issued them has its seat." In addition to the bank notes, as above authorized, the state issues 120,000,000 marks ($28,500,000) of legal tender notes of the empire. Amount of bank notes and government notes circulating in Germany at various periods from 1850 to 1876 expressed in their equivalents in American gold. Notes of Bank Imperial Bank All other Bank Total Circula. Imperial Bank of Germany. 1..0........ .......... .......... .......... ...,....... 164,295,000 166,575,000 1850......... 1866......... 1870......... 1872......... 1873 (Feb. 1) 1876 (Jan. 1) 1876 (June 3) 1876 (June 3).............166,575,000 AUSTRIA. Amount of government notes and notes of the National Bank of Austria in circulation each year from 1852 to 1875, stated in florins, and their total approximate nominal equivalent in United States coin: 46 otes of Bank of Prussia. $15,120,000 38,400,000 102,398,400 174,414,240 210,000,000 .......... .......... .1ll other Bank and Govt. notes $65,000,000 79,76,182 .......... .... I.... 36, 000,000 .......... Total Circiila tion. $80,120,000 ......... 182,274,582 .......... ......... 200,000,000 .......... PAPER MONEY. Government. Bank Nts Total Equiva Year. 1852.................... 1853.................... 1854.................... 1855.................... 1856.................... 1857.................... 1858................... 1859.................... 1860.................... 1861.................... 1862.................... 1863.................... 1864.................... 1865.................... 1866.................... 1867.................... 1868.................... 1869.................... 1870.................... 1871.................... 1872.................... 1873.................... 1874.................... 1875 (Sept.).............. B ank Note s, FloriDs. 192,600,000 188,300,000 383,500,000 377,900,000 380,200,000 383,500,000 385,000,000 466,000,000 475,200,000 .. -.......o 396,600,000 375,800,000 343,500,000 .......... o......... 300,300,000 318,300,000 352,100,000 293,200,000 302,100,000 302,000,000 RUSSIA. Paper money in Russia is furnished almost exclusively by the government, and consists of treasury notes issued to the Bank of the Empire, for the debt of the government to that institution. The expenditures of the government have constantly exceeded the revenue since 1832. The aggregate debt thus accumulated amounted in 1869 to 1,375,385,000 roubles (a rouble is equal to 73,4 cents in United States money), and in 1873 to 2,277,081,364 roubles. 47 Government. Notes, Florins. 164,900,000 148,300,000 .......... .......... .......... 150,000,000 .......... ............ -. 112,900,000 109,800,000 102,000,000 97,800,000 325,500,000 425,200,000 424,300,000 311,100,000 373,600,000 370,000,000 344,000,000 .......... ......... 340,000,000 Total Equivalent in United States Money. $165,000,000 151,500,000 .......... .......... 241, 000,000 *ooo.......... .........o .......... 228,000,000 215,000,000 198,500,000 .......... .......... 275, 000,000 310, 000 313,000,000 .......... 288,900,000 HIIAND-BOOK OF FINANCE. Specie paymleliLs have been u spelld(led in Russia for nearly seventy years. There is no gold in circulation, and very little silver or other coin. The following figures, compiled from an article in the Bankers' JMagazine, will show the progress of paper money circulation in Russia: RUSSIAN PAPER MONEY AND COIN IN CIRCULATION. Silver and Paper Money CopperCoins (roubles). (roobles, estimated). 1788................................ 100,000,000 100,000,000 1810................................. 577,000,000 100,000,000 1817................................... 836,000,000.......... 1830................................. 639,000,000.......... 1858................................ 755,297,000.......... 1870 (January 1)...................721,788,189.......... 1873 (January 1)...................... 797,313,480.......... 1875................................. 763,869,467.......... ! There is much confusion and error in the statements ill cyclopedias and text-books in regard to the debt of Russia, and the proportion of it used as circulating money. The following will, however, explain some of the discrepancies in the statelnents as published in the various books. The total debt of Russia on January 1, 1871, amounted in United States money to $1,241,750,000. This included about $575,000,000 (750,000,000 roubles) of paper money, or bills of credit issued by the government on the guarantee of all the banks and other credit establishments of the empire. These are called notes of the Bank of Russia, but are issued by the Imperial Treasury. January 1, 1873, the total debt amounted to $1,684,980,000 (2,277,081,564 roubles). In this amount is 48 PAPER MONEY. included $565,275,000 (763,869,467 roubles) of paper money, or bills of credit. On January 1, 1875, the total debt had increased to $2,149,995,000 in United States money. Of this amount $580,000,000 (797,313,480 roubles) was bills of credit, or paper money. About $200,000,000 more of the total was treasury paper, which circulates to a considerable extent as money. The total paper circulation of Russia is therefore about $780,000,000, or over 1,000,000,000 roubles. While this shows an increase of about 250,000,000 roubles since 1858, it does not seem to warrant the assertion of the Statesman's Year-Book (London) for 1876, that "the paper money circulation of Russia has more than doubled in the last ten years." Included in the above total debt there are about $200,000,000 of railway bonds, on which the interest is guaranteed by the government. The Scientiic lReview, of Paris, for September 2, 1876, states the debt of Russia at 1,494,070,791 roubles (81,097,047,960); but I presume this refers to the funded debt of the empire alone, and does not include either the treasury paper circulating as money nor the railway loans on which the interest is guaranteed by the government. ITALY. Paper currency in Italy is furnished mainly by the National Bank of Italy, whose present position and relations to the national government have existed since 1863. Its present powers to issue legal tender notes, etc., were the result of the financial embarrassments of the new kingdom finally established in 1861 as a result 3 49 HAND-BOOK OF FINANCE. of the Italian-French and Austrian war of 1859. The capital of the National Bank of Italy is 100,000,000 lire (a lire is of the same value as a franc, 19T3 cents), and in October, 1868, the outstanding circulation of the bank amounted to 775,879,712 lire, nominally equivalent to $147,417,145 in United States money, or at the rate of about $5-4,%, per capita of the nearly 27,000,000 of population in 1872. This does not comprise the entire paper currency of the country, but it is the greater part. There is but little specie in circulation, and the bulk of specie in the country is held in the National Bank, which, in October, 1868, held a metallic reserve of 178,000,000 lire, or equal to $83,800,000 in United States money. Silver being a legal tender for any amount in Italy, it is presumable that whatever metallic reserve may be in the bank now is mainly of silver, and also that whatever other coin there may be in the kingdom is almost exclusively silver. SPAIN. The National Bank of Spain has a capital of 120,000,000 reals vellon (equivalent to $6,000,000), and issues circulating notes to the amount of 60,000,000 reals vellon, or equivalent to $3,000,000 in United States money. Besides this a portion of the large public debt, which in May, 1872, amounted to $1,511,000,000, has circulated as money. The national government became bankrupt in 1873, the payment of interest on the public debt having ceased in July of that year. 50 PAPER MONEY. SWITZERLAND. In Switzerland there are tweiity-eight banks, nearly all of which issue notes to circulate as money, the legal limit of such notes issued by each bank being double the amount of its capital. The reform in the banking system of Switzerland, adopted in 1875, requires each bank to receive the notes of all other banks at par, and also that each bank shall keep a metallic reserve on hand equal to one third the amount of its notes in circulation. There has been a large increase of paper money in Switzerland in the last few years, and a corresponding decrease of coin, gold having almost disappeared. The aggregate of paper money in circulation at various periods has been as follows, viz.: 1870..........................................18,000,000 francs. 1873..........................................47,000,000 " 1873 (October).................................72,000,000 " The 72,000,000 francs, equal to $13,800,000, gave a paper money circulation of $5.30 per capita of the 2,600,000 of population, and the legal limit to the aggregate circulation is 50 francs per capita, which would give at the utmost $26,000,000 of paper circulation. The coin circulation is mainly of silver. BELGIUM. The Bank of Belgium had a total of circulating notes outstanding June 1, 1872, equal to $44,712,000 in United States money, and against this held a specie reserve equal to $21,384,000. On February 1, 1873, the circulation had increased to $60,264,000 and the specie to $23,328,000. 51 lHAND-BOOK OF FINANCE. SWEDEN. In Sweden there is the National Bank of Sweden, with a circulation in June, 1872, equal to $14,924,870; also twenty-six private banks, with an aggregate circulation at the same date equal to $9,067,600. The notes, both of the national and private banks, are payable in silver. The above aggregate of notes is at the rate of about $5 per capita of the population. The coin circulation is almost entirely of silver. TOTAL OF PAPER MONEY IN EUROPE. We may now proceed to make an approximate estimate of the increase of paper money in Europe ill twenty-two years by giving the amounts in millions of dollars (omitting six ciphers in each amount), giving the amount in each country for the year nearest to 1854 and again for the year Dearest to 1876: Millions of Dollars. 235 493 200 289 300 750 *3 14 60 25 2,369 Millions of Dollars. 191 122 80 151 558 3 44 20 1,169 1,200 Great Britain and Ireland..... France...................... Germany.................... Austria...................... Italy........................ Russia...................... Spain....................... Switzerland.................. Belgium..................... Sweden...................... Increase................. * This is only the notes of the Bank of Spain. I 52 Year. Year. 1854 1854 1850 1853 1854 1858 .... 1870 1872 1865 1876 1876 1876 1876 1876 1875 1873 1873 1872 PAPER MONEY. The average of the above periods is seventeen years, and the average increase of paper money something near $62,000,000 per annum. But a point of much significance is that of the total increase of say $1,200,000,000 of paper money in Europe, over $800,000,000 has been made since 1866, thus showing that the period of greatest contraction in the Uniited States has been the period of greatest expansion in Europe. 53 SUSPENSIONS OF SPECIE PAYMENT IN ALL COUNTRIES. THE UNITED STATES. HERE have been four periods of suspension of specie payments in the United States in the last sixty-two years. Two were caused by the requirements of the government to carry on wars (1814 and 1861), and two (1839 and 1857) by the collapse of speculation induced by over-issues of bank notes under systems of banking not sufficiently guarded by law in regard to the security of an adequate specie reserve. In 1814 the government was at war with Great Britain, and conducting extensive operations along the line between Canada and the United States. From 1812 to 1814 the government borrowed in all $45,000,000. Of the first $10,000,000, borrowed in 1812, $6,000,000 was taken by the banks in the middle States, as also a considerable portion of the other loans. The New England people were opposed to the war, and consequently the New England banks took scarcely any of the government loans.* The result of these loans to the government was that in 1814 all the banks, except those in New England, suspended specie payments. As a means of assisting the financial operations of the government, aInd also to encourage the banks to resume, * Sumner's iF,tory of American Currency, page 65. (LI'~~~,' sUPIO PPCI PAYMENT SUSPENSIONS Ot SPECIE PAYMENT. the Bank of the United States was organized in 1816-17. (This was the second institution under that name, the first one having been organized in 1791 and wound up at the expiration of its charter, March 4, 1811.) This second charter of the United States Bank extended to March 3, 1836, when there was a strong effort to have it renewed, and a bill for that purpose was passed by Congress but vetoed by President Jackson, July 4, 1832. The Bank of the United States, however, continued its business under a charter granted by the legislature of Pennsylvania. From 1834 to 1838 was a speculative era, not only in the United States but elsewhere, and owing to the absence of any legal restrictions on the issue of bank notes, or in regard to reserves, the volume of bank notes increased from $94,000,000 in 1834 to $149,000,000 in 1837. The result was a collapse of bubble speculations and banks. The Bank of the United States suspended October 9, 1839; it resumed again on January 15, 1841, but finally succumbed to the general tendency of affairs on February 4, 1841. The next suspension was in 1857, from the same causes as in 1838-9. None of the three foregoing suspensions were legalized by any act of the national government. Legal tender paper money had been issued by some of the colonial governments prior to the war of Independence, but these were prohibited after 1750, and there was no legal tender paper currency from that time until 1862. The act authorizing the suspension of specie payments and the issue of legal tender paper money will be found in the Digest of Monetary Laws in the act of February 25, 1862, and the amount of currency outstanding each year under this and subsequent laws will be found in 55 Table showing the gold-price in dollars of one hundred dollars in currency in the New York market, by months, quarter-years, half-years, calendar years, and fiscal years, from January 1, 1862, to August 31, 1875, both inclusive. Periods. January.................. February................. March.................... April..................... May...................... June..................... July.................... August................... Septem ber............... October.................. November............... December.............. First quarter-year........ Second quarter-year.....732 Third quarter-year.......3..I I Fourth quarter-year..... First half-year........... Second half-year......... Calendar year............ Fiscal year ended June 30 1862 1863 1869 97.6 6t8.9 64.3 96.6 62.3 63.1 98.2 64.7 61.4 98.5 66 157.9 96.8 67.2 56.7 93.9 69.2 147 5 86.6 7(; 6 638. 7 87.3 79.5 39.4 84.4 74.5 44.9 77.8!67.7 48.3 76.3167.6 42.8 75.6166.2 44 97.51:65.2'9 96.3;67.4 53.6 86.1176.8 40.8 76.6 67.2 44.9 96.9 66.3 57.9 81 71.6 42.8 88.3 68.9 49.2 .... 72.9 64 I I 4 5 7 6 6 I 2 6 6 8 1 7 8 8 9 aI 1866 1867 71.4 74.3 i72.3 72.8 i 76.6 74.1 178. (i 7'3. 7 75.9173 67.2172.7Z 66 171.7 67.2171 68.7 69.7 67.4 69.7 69.5 71.6 73.2 74.2 73.3 73.7 73.6 73.2 67.2 70 8 70 71.8 73.5 73.4 68.6 71.3 71 72.4 71.2 70.9 1871 1872 187 90.3 91.7 88.' 89.7 90.7 87.6 90.1 90.8 86.t .90.4 90 84.9 89.7 88 85 89 87.8 85.8 89 87.5 86.4 89 87.4 86.7 87.3i88.1 88.7 88.3 88.3 91.8 89.9 88.6 92.1 91.5 89.1 90.9 90 91 87.6 89.7 88.6 85.3 88.4 87.6i87.3 90 188.7 91.6 89.8i89.8 86.4 89.2 88.2 89.4 89.5 89 87.9 88.7 89.4 87.3 1865 1868 72.2 1869 73.7 74.4 76.2 75.2 71.8 72.4 73.5 74.5 73.1 76.8 79.2 82.3 74.7 73.2 73.7 79.4 73.9 76.5 75.2 72.7 1870 82.4 t 83.7 , 88.8 '88.4 87.2 88.6 8.5.6 84.8 '87.1 88.7 89.8 90.3 84.9! 88. 85.8~ 89.6! 86.4 t 87.7t 87 81.1 3 1874 789.7 89.1 B 89.2 388.2 89.9 90 91 91.2 f91.2 91 90.2 89.6 89.3 89 91.1 90.2 89.2 90.7 89.9 89.3 L 1875 88.9 87.3 86.6 87.1 86.3 85.4 '87.2 88.1 86.4 .... .... .... 87.6 86.3 87.2 .... 86.9 .... .... 88.8 46.3 I 48.7 l 57.5 ) 67.3 73.7 i71.4 r70.4 L 69.71 69.5 68.7 468 68.4 50.4 70.7 69.8 68.4 58.9 69.1 63.6 49.51 70.7 71.7 72.1 71.6 71.4 70.1 68.7 69.6 72.9 74.4 74 71.5 71.7 69.5 73.7 71.6 71.5 71.6 71.5 SUSPENSIONS OF SPECIE PAYMENT. GREAT BRITAIN. The Bank of England suspended specie payments on February 26, 1797, in consequence of a drain of specie and the increase of public expenditures resulting from the war with the French. Bank of England notes were declared legal tender; but their issues were so much restricted by law that they remained at par until 1800, when the issues were increased, and they fell to a discount of 8 per cent for gold. In 1810 the discount was 131 per cent, and at another period, in 1815, 25 per cent, at about which depreciation they continued until 1816. In 1817 they had risen to 21 per cent, and in 1819 declined to 4i per cent. In May, 1821, the bank resumed specie payments. FRANCE. The Bank of France first suspended specie payments in 1848; the cause being the revolution of that year, which obliged the bank to make large advances to the provisional government and the city of Paris. But in order to prevent too great depreciation of the paper Inoney the issues of the bank were restricted by law to 350,000,000 francs. In 1851 the bank resumed specie payments. In August, 1870, the Bank of France again suspended specie payments in consequence of the war with Germany. The effects of this upon the notes of the Bank of France are thus described by M. Victor Bonnet, in an article in the Revue ])es Deux Mordes: 57 HAND-BOOK OF FINANCE. "The movements of the paper-money circulation inflicted on France by the war are destined to surprise a multitude of people. There is," he says, " in those movements a complete overturning of the economic and financial ideas which the best authorities had endeavored to establish in the previous history of monetary science. These authorities have always raised their warning voice against paper money and legal tender laws. They tell us with one accord that if the quantity of paper money be not strictly limited, and excessive issues prevented, the public confidence will fail, and depreciation will soon follow. In apparent defiance of these sound principles, we find that in the midst of the war troubles of France, paper money to the amount of 1,800,000,000 of francs was issued, and has been kept at par by means of a coin reserve of 600,000,000 francs, or 33 per cent. This paper money never for a single moment lost its value, or fell to a discount until the first payments were made to Prussia. At that crisis the premium on gold rose to 2. per cent, and, strange to say, this premium fell immediately when the law was passed to expand the circulation, and to increase the issues beyond 1,400,000,000 francs, which was the limit at first assigned to the maximum of the note issues. In November, 1871, these issues were 2,300,000,000 francs, and the depreciation was 21 per cent. At the end of January, 1872, the issues were 2,450,000,000 francs, and the depreciation had fallen to 1 per cent. "At length, after the lapse of a certain period, when new issues had been authorized, and the legal limit had been fixed at 3,200,000,000 francs, the premium on gold was merely nominal, and nobody paid any attention to it, except those concerned in the foreign exchanges. 58 SUSPENSIONS OF SPECIE PAYMENT. The singularity of this was the more noteworthy because these large emissions of notes took place amidst grave incertitude. For, in the first place, France was paying her immense indemnity to the Prussians, and was seeking in every possible way to augment her specie resources; and, secondly, she seemed likely, in spite of all she could do, to lose her whole aggregate of coin circulation. Never before had such dangers been surmounted with so much success." AUSTRIA. In March, 1848, in consequence of the revolution in Vienna, there was a run upon the National Bank, which suspended specie payment. In May, 1851, the premium on silver florins over bank notes was 30 per cent. At the beginning of 1854 it had declined to 22 per cent. On November 1, 1858, the National Bank of Austria resumed specie payments. In 1859 the war of Italian liberation, in which Italy and France were combined against Austria, compelled the National Bank of Austria to again suspend specie payment. In June, 1859, the depreciation of the notes of the National Bank was 42 per cent, in September of the same year 16 per cent, and at the end of January, 1860, was 33 per cent. In January, 1861, the depreciation was 32 per cent, and at the beginning of 1862 was about 27 per cent. In December, 1862, an act was passed peremptorily requiring the bank to resume specie payments on January 1, 1867. Under the influence of this the discount on national bank notes for silver decreased to 6 per cent in 1863. But ill 1866 the war with Prussia 59 HAND-BOOK OF FINANCE. obliged an increase of paper money, and the discount on national bank notes and government notes increased to 19 per cent in July, 1866, and 21 per cent in January, 1867, and was reduced again to 15 per cent by the end of that year. During the years 1874 and 1875 the premium on silver over bank or government notes averaged about 5 per cent. ITALY. In Italy there was scarcely any paper money in circulationi previous to 1859, but the war of Italian liberation, which caused the Bank of Austria to suspend in 1859, also obliged great expenditures on the part of the new Italian government, and the National Bank of Italy, which had been founded under a royal decree in 1863, by the consolidation of the National Bank of Turin with that of Tuscany, had already made large advances to the new government. The latter, finding that it could no longer raise money by popular loans (the price of its "rentes" having fallen to 45 per cent), and requiring still further aid from the bank, authorized it, in 1866, to issue inconvertible legal tender paper money. The total of government and bank notes in circulation in April, 1865, had been stated at 247,000,000 francs, or $49,000,000, but the result of the new law was that by 1874 the total paper money amounted to 1,500,000,000 francs, or $300,000,000. In 1866 the depreciation of the paper money was 19 to 20 per cent, but with a largely increased amount in 1874 the depreciation was only 3 per cent, and at the beginning of 1876 about 7 per cent. 60 SUSPENSIONS OF SPECIE PAYMENT. RUSSIA. Specie payments have been suspended in Russia for more than 60 years. During the period from the suspension to 1870 the depreciation of the paper money fluctuated over a range from 17 to 29 per cent. According to the reports of the last few years the range of depreciation has been from 10 to 15 per cent. BRAZIL. Specie payments have been suspended in Brazil for nearly 50 years. During that time there have been various unsuccessful attempts to resume. One plan upon which these attempts were made was to reduce the value of the metallic monetary unit. Thus the millreis, which is the monetary unit, and is now established at the equivalent of 54' cents in United States muoney, was originally established at $136.35. The other method, upon which there have been several attempts to resume - the last one in 1858 - was by contracting the currency. In 1848, incident to the cessation of the slave trade,* there was a large importation of gold bullion. This was coined and put into circulation by the government, and for a time it was claimed specie payments were resumed, but the gold soon went out again in the adjustment of balances created against Brazil in her foreign trade. On this occasion it was thought that the specie once put into circulation at par with paper would maintain the latter at par. But after the specie had * Bankers' Magazine for April, 1875. 61 6HAND-BOOK OF FINANCE. disappeared the theory was that the temporary equality of the two was caused by a depreciation of gold, which was recovered when the metal disappeared. EFFECTS ON THE VALUE OF PAPER MONEY. The foregoing summary of the effects of the suspension of specie payments in various countries to depress the value of the currency affords the following facts: First. That the depreciation by no means corresponds to the volume of the currency. This is illustrated by the experience in France and Italy, where the value of the currency increased concurrent with an increase of its volume. Second. That coin put forcibly into circulation at par with an inconvertible currency, as was the case in Brazil, will immediately flow out of the country. Not being used to redeem the currency, it is only a cominmodity for which there is no use, and like other commodities is temporarily depressed in value to an extent which, though slight, is sufficient to cause its exportation. The causes which operate upon the value of an inconvertible currency, as compared with gold and silver, may be specified as follows, viz.: First. The prospect of redemption. This is, of course, the most potent, producing much the greatest effect and in much shorter periods of time. This prospect may be diminished by the unfavorable aspect of a war, as was frequently the case in the United States, or by a decrease of revenue or a decrease of the stock of coin in the treasury, or by a failure of important crops, which 62 SUSPENSIONS OF SPECIE PAYMENT. would show the probability of a larger export movement of coin. The prospect of redemption would, however, be increased by the opposite of any of the above circumstances. In the case of France, which M. Victor Bonnet considers so remarkable, there was an increase of coin in the Bank of France concurrent with the increase of paper money, and though it was not near so large as the increase of bank notes, it was sufficient to inspire the public with confidence in the ability of the French financiers to borrow the whole amount for the indemnity to Germany, and also to redeem the notes of the bank. In short, this was "confidence "- confidence in the redemption of the paper money in coin. Second. The demand for currency to use in the usual payments in trade —this demand, of course, fluctuating with the increase or decrease of the general volume of trade -and causing an increase in the coin value of the currency. Thus, if we assume that the prospect of redemption of the currency in coin would fix its value for the time being at say 75 cents on the dollar, an increase of internal traffic might cause a premium on this price. The inconvertible paper money having expelled coin from the channels of circulation might be inadequate to supply the requirements for money, and yet the prospect of redemption be so remote that the premium paid for the paper money as the only instrumernt of exchange would not be sufficient to raise it to par with coin. The operation of this was, I think, visible to some extent in Italy. Previous to the establishment of the new kingdom, in 1860, there had been but little progress of any kind in Italy; the habits and ideas of its people seemed fossilized in the forms of the seventeenth century. But with the new kingdom a new era 63 tHAND-BOOK OF FINANCE. began in economic,sand industrial affairs. Bank notes were scarcely known in Italy before 1860, but between 1866 and 1874 the six banks of issue in the kingdom had increased their branches from fifty-two to ninetyfive, and productive and manufacturing industries were greatly stimulated. From 1869 to 1872 the imports of fbreign goods increased 25 per cent, and the value of the total annual exports increased 50 per cent. But with all this increase of traffic and industry the annual expenditures of the government exceeded the revenue by nearly $50,000,000 each year, and the aggregate of these deficits from 1861 to 1873 was about $500,000,000. Notwithstanding this continued increase of debt and the increase of the inconvertible paper money from $49,000,000 in 1865 to $300,000,000 in 1874, the value of the paper money, as compared with gold and silver, advanced from an average of about 80 cents in 1865-6 to about 93 to 95 cents in 1874-6. There were, of course, many concurrent features in the political and industrial affairs of the country which exercised their influence to cause fluctuations in the prospect of redemption; but coin had been practically expelled from the country, and the volume of paper money being limited, the premium paid for it over its real value, though not sufficient to raise it to par, was, I think, largely the cause of the advance of 12 to 15 per cent from 1866 to 1876. TAird. The temporary depreciation in the value of gold and silver, either brought from abroad and forced into the market by coinage and issue by the government, as in the instance in Brazil, or by production, as in our own country. The inconvertible paper currency having deprived the gold and silver of their function as 64 SUSPENSIONS OF SPECIE PAYMENT. money, the latter become only commodities, and as such, being cheaper than in countries where they are used both as a commodity and as money, they are inmmediately exported. I am aware that some political economists deemn it almost a heresy to say that the value of gold can be less in one country than in another. But to me it seems plain that gold, like wheat or cotton, flows to the market where it bears the highest value relatively to other things. The precious metals have always been selected as standards of valuation, not because their value was unchangeable, but because they changed less88 than those of other commodities. Paper money has no intrinsic value, but only a prospective one, viz., the prospect of redemption. It is, therefore, impossible for paper money to be a standard of values. It may appear to be so, but in reality the values that seem to be measured by a "paper money standard," are measured by the gold and silver standards modified by the prospect of redemption of the paper money. The paper money price of anything is only the gold or silver price with an allowance made for the uncertainty of ever getting the gold and silver promised in the paper money. But this temporary depreciation of gold or silver, in any country, is concealed by the use of paper money; consequently the prices of other commnodities do not immediately decline, buyers and sellers are slow to adjust prices to a change in the value of the precious mnetals, and in nearly all cases the accumulation of cheapened precious metals flows out in exportation before anv change is made in the currency prices of commodities; but, in the mealtimne, the inconvertible paper money has been overvalued. 3* 65 GOLD AND SILVER COIN IN EUROPE. N 1800, the total amount of gold coin in the United Kingdom was estimated at only ~8,000,000. In 1844, the total of gold coin in the kingdom was estimated by Newmarch at ~36,000,000, this amount including the coin in the bank. The same authority also estimated the total of gold and silver coin in the kingdom, at the close of 1856, at ~70,000,000. In 1868, Professor W. Stanley Jevons made a partial census of the gold and silver coins in the United Kingdom, and, upon this as a basis, made an estimate of the whole amount. His conclusion was that the total amount of gold coin in the kingdom in March, 1868, was not to exceed ~80,000,000, and that it was possibly ~3,000,000 to ~5,000,000 less than that aggregate. The result of his estimate, which included the gold in bank,' was as follows: Sovereigns in circulation.............................~64,500,000 Sovereigns undistributed, in bank..................... 3,500,000 Half sovereigns (24,000,000).......................... 12,000,000 Total gold circulation......................~80,000,000 The amount of silver coin ill the kingdom was at the same time estimated at ~14,000,000. The London Economist of March 15, 1873, estimated that the amount of gold coin in the kingdom had been increasing at the rate of about ~2,000,000 per annumn for several years. This estimate of increase was based GOLD AND SILVER COIN IN EUROPE. upon the annual movements of coin to and from the Bank of England and the interior at the seasons of the spring and fall settlements and crop movements. Assuming this ratio of increase to be correct, Dr. Edward Young, of the Bureau of Statistics, at Washington, made an estimate of the amount of gold and silver coin in the United Kingdom at the close of 1872, with the following result, viz.: Total amount of gold coin circulating in the United Kingdom at the close of 1872.....................~84,551,000 Total amount of silver coin circulating in the United Kingdom at the close of 1872...................... 15,000,000 Total amount of bronze coin circulating in the United Kingdom at the close of 1872...................... 1,148,000 Assuming that silver coin constituted about the same proportion of the whole in 1856 as in 1868, we have the following approximate statement of the amounts of gold and silver coin in Great Britain and Ireland at the periods stated, viz.: Gold coin. Silver coin. 1856................................ ~60,000,000 ~10,000,000 1868............................... 80,000,000 14,000,000 1872............................... 84,551,000 15,000,000 1876................................ 88,500,000 16,000,000 Owing to the fact that previous to 1795 the gold coins of France were very much undervalued as a legal tender, gold was almost entirely banished from France, and even after there was a modification of this, in 1795, silver continued almost the exclusive metallic curreiincy of France until a comparatively recent period. In 1848, also, the Bank of France suspended specie payments in consequence of the revolution, and its notes to the amount of 350,000,000 francs were made a legal tender, which condition of things lasted until 1851. It 67 HAND-BOOK OF FINANCE. may therefore be presumed that what coin was not driven out of the country by the suspension of specie payments was at least three-fourths silver. The population of France in 1848 was not to exceed 35,000,000, and allowing eighty francs per capita as an estimate of the probable amount of coin and notes in use at that time, we have an aggregate of 2,800,000,000 francs, from which deduct 350,000,000 francs of notes, and it leaves an approximate estimate of 2,450,000,000 francs of coin, which, if one-fourth gold, hould leave silver coin to the amount of 1,840,000,000 francs. Roswag estimated the amount of coined money in France in 1856 at 4,000,000,000 francs, and expressed the belief that in the nine years to 1865 the aggregate had declined to 3,000,000,000. M. Louvet, minister of agriculture and commerce, and also MI. Charles le Touze, estimated the amount of coined money in France in 1870 at from 5,000,000,000o) to 6,0()0,000),000 francs. The French indemnity to Germany, in accordance with the treaty signed at Paris February 26, 1871, was 5,000,000,000 francs, of which 1,000,000,000 was to be paid in 1871, and the rest within three years.* Not *M. Wolowski, a member of the Institute and a deputy to the National Assembly, printed an article in the fo,,z6c~al d(es Economists, in December, 1874, in which he summed up the French payments to Germany as follows, viz.: To sum up the totals of remittances made to Germany, we delivered: Francs. C. In notes on the Bank of France................................. 125,000,000 00 In French gold................................................... 273,003,058 10 In French silver................................................. 239,291,875 75 In German specie and bank notes............................... 105,039.145 18 In thalers........................................................ 2,185,313,721 04 In Frankfort florins............................................. 235,128,152 79 In marks banco of Hamburg.................................... 265,260.990 29 In marks of the Empire........................................... 72,07309 62 In florins of Holland............................................ 250,540,821 46 In Belgian francs................................................ 295,704,546 40 In pounds sterling............................................... 637,349,832 28 Totl..................................................... 4990,660,453 29 68 GOLD AND SILVER COIN IN EUROPE. withstanding the remarkable financial ability of the French ministers, by which a systemn of gigantic bor rowing in foreign countries was inaugurated, there was a considerable drain of specie from France, though nothing like so large as was generally anticipated. This movement of coin was, however, in all probability, sufficient to cause an important decrease in the stock of coined money in France from 1870 to 1874. If even the lower estimate made by Louvet of tile amount of coin in France in 18'70 was not too large, it must be remnembered that there was an increase of over $250,000,000 of paper money in France from 1870 to 1875, and that the premium of even 2i per cent on gold over paper would cause a large export of gold. A very liberal estimate of the aggregate of coin in France- incl uding the metallic reserve of the bank - in 1875 could not exceed 5,000,000,000 firancs, or say from $1,000,)00,000 to $900,000,000. This amount of coin, together with nearly $500,000,000 of bank circulation in 1875, would give the population of France an aggregate ciiculation so much larger per capita than any other country in the world that, in view of the fact that alljg#ure8 34 37 40 43 47 51 Year. Millions. 55 59 63 67 71 74 77 81 85 89 92 93 97 101 105 109 110 108. DIAGR. SHOWING THE ANNUAL PRODUCTION OF GOLD, THE ANNUAL PRODUCTIO~ FIFTY Explanation.-The names on the upper margin of the diagram are the authoril gold in particular years. The names stand directly over the amounts and the years to 1875, is drawn after the figures in the table of the Journal des Economists given . - C, 5= 0 1,.. .w, P:I C I 200 Millions of Dol~lar~.| 190 " 180 " " " 170 ". 160 " " 150..". 140 130 " Z 120 " " 110 " " 100 " "' 90 80 70 * 60. ". 50.... 4~~~~~~~~~~~~~~0 420Prodtin Silcr 4 30 Au~t E~e~t wgof G( Id.l the Arts \10 "13, *...t. 0 '~~~~~~~~O oo c o~~~C ~~~T L ~ C Co o Co;Co CoCo.C CoCo CoCoC CotoK j~:oo.oc ., I M o.1 OFSLEtADTEA~A OsUPINO o NTEAT O 0 I II I ;IIIW444 ' III V I w- ~ ---- -- - -- -1- { V 1 T1ti . t1 I t{ Li _t_ i ~ -- --- -- __ _ I ___ _ I ___ THE ERA OF DEBT. HIE following compilation of the national debts of all countries was made mainly to show the geleiral increase of that class of indebtedness in the last twenty-five years. It is, however, impossible to ascertain in all cases the amounts for 1850. In most of the instances where no amount is given at as early a date as that there was no debt, and the amounts given for years subsequent to that are in tended only to show the increase in the latter part of the period. The amounts are given in each case in their equivalent in United States monev: Amount. Year. $1,655 964,500 1875 Dec. 185,909,802 1873 55,769,055 1875 3,750,337,006 187.5 Jan. 246,000,000 1875 Jan. 156,685,000 1874 73 500,000 1874 May. 3.000,000 1874 3,876,000,000 1875 Mch. 75,000.000 1875 1,951.500.000 1873 386,300,000 1874 364,000,000 187.3 2,149.900.,000 1875 Jan. 2,650.000.000 1875 June. 43,000,000 1875 8.000,000 6.000.000 900 000 000 187i4 t2,245 018.579 187f, Jn. 30 116,082.917 1875 July. 395.500,000 11874 Austria-fIungary........ Belgium.................. Denmark................. France.................... Prussia................... Baaria................... Wuirtemu )t0rg.....85........ Saxony................... Greatt Britain and Ireland. Greece.................... Italy...................... Netherlands....................................... Pori ugal Rtussia.................... 1 Spain..................... 1 Sweden................... Noray................... Switzerland............... TurkNoey 80 90000 17 Ttirkey................... l United States...............4 Canada....................l Mexico................... 1 * Estimated. t This includes all the non-interest-bearing debt and the Pacific Railroad bonds. I Amount. $625,000,000 123,798,281 ,4,312,325 *1,000,000,000 ............ 86,000.000 *30,000,000 ......... 3,928,000,000 25,000.000 586,000,000 .......... 1(5,000,000 692,000,000 *1,075,000,000 .......... .......... .......... None. 6{.4527,.7 1 70.000 000 317,357, 20 Year. 1848 1844 1866 1850 1855 1850 .... 1836 1850 1860 1856 1850 1869 .... .... .... 185o 1750 1868 1865 HAND-BOOK OF FINANCE. Amount. Year. 369,294,430 1875 June. 67,700,.000 1875 June. 17,000,000 1875 63,400,000 1875 Sept. 75,000.000 1184,3 16,400,000 1855 4,400,000 1875 16,000.000 1875 29,'00,000 1875 537,675,000 1874 April. 350.000,000 1875 16,500.000 1875 8 615,000!874 3'200.000 1874 54,5,00,000 1874 50,000.000 1873 15 000.000 1873 17.000 000 1875 60,000,('000 1875 9,509,000 1874 24,000,OC(O 1875 25,750,000 1875 3,750 000 1875 211.785,000 1875 Mch. 100,000,000 1875 $23,4,9,471,926 Brazil............. Argentine Republic....... Bolivia................... Chili...................... Colombia................. Ecuador................... Guatemala................ Hayti..................... Honduras................ India...................... Egypt..................... Japan..................... Colony of Good Hope..... Ceylon................... New South Wales........ New Zealand............. Queen,land............... South Australia........... Victoria................... Nicaragua................ Paraguay................. Peru...................... San Domingo............. Uruguay.................. Venezuela................ Totals................ Totals................$9,032,626,023' 23,449,41,926 that created in the construction of railways, nearly the whole of which has been the growth of the last twentyfive years. It was only as far back as 1814 that George Stephenson constructed his first locomotive, and the first railroad ever constructed with a view to carrying passengers was the Stockton and Darlington road, opened Septemniber 27, 1825. The Liverpool and Manchester was opened in 1830. The first road opened in the United States was from Quincy, Mass., to tide-water, four miles, in 1826. The first important road begun in the United States was the Baltimore and Ohio, in 1828. In 1829-30 roads were begun in nearly all the Atlantic States. So great was the activity that in 1836-7 the railroad mileage of the United States exceeded that of any other country in the world, a position which the United States continues to hold, as will be seen by the fact that her 116 Year. Amount. .......... .......... .......... .......... .......... .......... .......... .......... 299,700,000 .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... $9,032,626,023 1850 1850 1850 1850 1850 1850 1850 1850 1839 1850 1850 1850 1850 1850 1850 1850 1850 1850 1850 1850 1850 1850 1 llo 1850 The next most important class of funded debts is THE ERA OF DEBT. railroad mileage is about 40 per cent of the whole amount in the world. In 1850 the total mileage of the United States was 9,021. By 1860 it had increased 300 per cent; by 1870, 500 per cent, and at the close of 1875, 800 per cent. This may be taken as the general measure of the advance of that agency which has revolutionized the commerce of the world in the brief space of twenty-five or thirty years. Poor's Railroad Jfanual states the aggregate of funded and floating debts of railroads in the United States at the close of 1875 at $2,459,607,349, or at the average rate of $31,600 per mile of the 74,658 miles of road. If $30,000 per mile were taken as the average indebtedness of the 182,699 miles of railways in the world at the close of 1875, it would give an aggregate of, say, $5,481,000,000.* But in Belgium, Germany, Denmark, Holland and Sweden the governments have constructed an aggregate of about 9,500 miles. In Rus * The following table of the railroad mileage of the world at the close of 1875 is condensed from Poor's Railroa(d Janual: Miles. France...................... 12,376 Germany.................... 17,372 Russia...................... 12,074 Italy........................ 4,787 Austria...................... 6.366 Hungary...................... 3,966 Spain....................... 3 818 Sweden...................... 2,478 Belgium.................... 2,249 Switzerland................. 1,098 Holland..................... 1,6,6'2 Denmark.................... 789 Portugal..................... 613 Norway..................... 3325 Tuirkey..................... 1 Ilfi Rouimania...................766 Egypt....................... 1,013 Algeria...................... 3 33 Tlnis........................ 37 Mauritius and Cape Colony. 155 Mfiles. United States................ 74,658 1 Canada....................... 4,483 1 Mexico........................ 327 Cuba.....427..................... 427 Central A merica............... 144 Jamaica....................... 34 Brazil......................... 837 Argentine Republic........... 994 Per u........................... 972 Chili.......................... 629 Uruguay.....................197 Guiana........................ 68 Paraguay...................... 47 Colonbia.....................43 Venezuela..................... 39 Australia....................... 21148 India..................... 6,172 Ceylon and Java.............. 291 Japan..!J....... 41 Great Britain and Ireland..... 16,696 117 HAND-BOOK OF FINANCE. sia, also, the government has aided the construction of railways something after the plan upon which governmnent aid was extended to the Pacific railways in the United States. In these cases the railroad debt has been counted as part of the national debt, and included in the debts of that class in the table of national debts. We must, therefore, deduct about $500,000,000 for these and the floating debts, thus leaving the aggregate of funded railroad debts in 1875 about $5,000,000,000. Measured by the mileage, the aggregate of these debts was probably about as follows, in round numbers, viz.: $3,500,000,000 in 1870; $2,000,000,000 in 1860, and $700,000,000 in 1850. Municipal debts come next in point of magnitude, and in these as they relate to American cities we find an increase exceeding that of any other class of funded debts, except those of the railroads, the aggregate at the close of 1875, as indicated in various compilations, was about $,700,000,000.* As regards a similar class of debts * The most comprehensive summary I have seen of these was printed in the Puiblic (New York), as follows: (b) 1870. 187.5-76. $54,436,1801 $161.165,2f99 42,103,866 69,616,,5'3 22,598,361 43.9,33,16;5 20.000 38.494.060 13,568,431 32.943,425 26,500,000 22,699,438 2,363,885 22,000,000 13,613 000 1 7,49.3,000 5,020.000.17,35,500 14.103,000 16,996,387 5,133,414 14,247,,500 4,042,619 13,.33.3,819 5,006,000 10,795,000 3,100,000 9.465,750 1,795,870 8.843.800 2.101,255 8,086O.900 2,031,530 7,264,291 2,706,011 6.462.800 5,271,89'2 5,851,786 634.567 5,579.(. 00 5,137,208 5,514.814 2,678,700 5,400,000 New York......................................... Philadelphia (a)................................... Boston............................................. Brooklyn....................................... Baltimore......................................... New Orleans...................................... Washington........................................ St. Louis.......................................... Cincinnati......................................... Chicago........................................ 1968 Jersey City.....................................4 Pittsburgh....................................... Louisville.........................................50600 195 Newlark............................................. Pro ience.................................178 88 Clevd.land..............................3 3... 2.101........255... 8,860 Buffalo.....................................I,3.530. 7,6.291........... Portland.......................................... Memphis.......................................... Rochester.......................................... Charleston, S. C.................................... Elizabeth.......................................... 118 THE ERA OF DEBT. in Europe, there is no satisfactory source of information. In some of the capitals the debts properly chargeable to (b) 1870. 2,111,431 6,028,559 401,962 2,099,592 2,800,000 7,458,647 2.774,429 2,195,458 1,462,033 118,000 448,493 .......... 723,600 1,855,741 1,395,250 4,424,46i5 2,050,000 ........... ........... 646,439 ........... ........... 155.000 500,000 648,794 none.. 812,014 ........... ........... 79),895 250,000 ........... 357,778 400,000 none.. ........... ........... ........... $276,804,299 1,292.676 549,150 $278,646,125 Richmond......................................... Cambridge......................................... Toledo........................................... Savannah......................................... Albany............................................ San Francisco (ae.................................. Worcester......................................... Mobile............................................. Fall River......................................... Milwaukee...................................... Bangor............................................. Powell, with Cambridge in Middlesex Co......... Detroit............................................. Norfolk.......................................... Augusta........................................... Lynn.............................................. Nashville......................................2 0 7 Alleghany, with Pittsburgh in Alleghany Co....... Chelsea, with Boston in Suifolk Co................ Lawrence, with Lynn in Essex Co................. Springfield......................................... Salem, with Lynn in Essex Co..................... Somerville, with Cambridge in Middlesex Co..... Indianapolis....................................... St. Joseph......................................... Brookline......................................... Columbus, Ohio................................... St. Paul........................................... New Bedford, with Fall River in Bristol Co....... Beverly, with Lynn in Essex Co................... Lynchburg......................................... Galveston............................... Holyoke, with Springfield in Hampton Co........ Fitchburg, with Worcester in Worcester Co....... Northampton...................................... Columbus, Ga..................................... Zanesville........................................ Newburyport, with Lynn in Essex Co............. Peabody, with Lynn in Essex Co.................. Medford, with Cambridge in Middlesex Co........ Total............................................. Massachusetts (other towvns).......................1226 11699 Ohio (other towns)................................ Total............................................ (a) Census statement of county debt given for 1870. (b) In this table, under 1870 are placed, not the debts of cities at that date, but the debts of all municipalities in the counties in which those cities are located, as given in the census report. When there are several cities in the same county, the name of the county is given against each city after the first named, in place of repeating the total indebtedness of municipalities in that county. Thus the first column gives an indebtedness larger than was reported to the census marshals for the cities named, and as no city debt was then reported for Phiiadelphia or San Francisco, the amounts then reported as county debt are inserted. 119 1875-76. 4,632,708 4,280,400 3,782,280 3,736,917 3,693.,OOO 3,431,000 3 099,7.'32 2.' 864,100 2,569,157 2,544,963 2,484,000 2.289,000 21282,900 2,150,014 2,100,000 2,030,500 1,737,282 1,667,000 1,661,840 1,594-346 1,562,805 1,483,725 1,472,854 1,455.000 1,380,900 1,311,350 1,261.392 1,230,262 1,195,000 1.041,800 921,509 873,000 8:36,500 698-027 663,779 582,500 548,059 535.613 52.3,577 519,500 $618,205,488 14,161,991 8,424.388 $640,791,867 HiAND-BOOK OF FINANCE. the municipalities are complicated with the national debts, though, on the whole, municipal debts are believed to be much smaller in proportion to population than in the United States.* It would seemn, however, that a very moderate estimate of the aggregate of public debt, not national, in Europe in 1875 at say $3,000,000,000, and also to assume that the rate of growth of these since 1850 had corresponded with the growth of railroad and national debts. The primary object of this compilation of debts is to show the aggregate amount of funded debts negotiable in the financial centers of Europe and America, thus showing the increased demand for coin to pay interest, and it is even without the details of railroad and municipal debts in Europe, the aggregate given for Europe must be about correct. * The annual interest on the debt of Paris, together with the amount appropriated to the sinking fund for the year 1873 was 46,170,825 francs, or about $9,230,000, thus indicating a debt (at four per cent) of about $183,000,000. The following statement of the debts of English cities is also said to have been called out by some discussions in Parliament in 1875. Population, 1871. 3,266,987 493,405 379,374 259,212 145,8.:0 182,552 65,510 92,658 103,858 343,787 113,100 124,801 63,485 74,358 156,878 95,426 128,443 82,928 37,389 104,409 80,782 London............................................... Liverpool............................................. Manchester........................................... Leeds................................................18000 Bradford.............................................. Bristol................................................ Halifax............................................... Bolton................................................ Brighton.............................................. Birmingham.......................................... Oldham............................................... Salford............................................... Rochdale............................................ Huddersfield......................................... Wolverhampton.....................................; Preston............................................. Newcastle............................................ Blackburn............................................ Ashton............................................... Sunderland........................................... Swansea (Wales)...................................... Total............................................... I I 120 Cities. Debt. $25,918,000 19,552,000 16,300,000 11,800,000 8,950,000 5,508,000 5,080,000 3,600,000 2,950,000 2,865.,OOO 2,600,000 2,430,000 2,150,000 2,014,000 1,873,000 1,730,000 1.654,650 1,300,000 1,187,000 1,112,000 1,090,000 $121,663,650 THE ERA OF DEBT. Of American State debts the aggregate in 1875 was about $370,000,000,* and of county debts about $180,000,000. These two classes having increased much less rapidly than city or railroad debts. We have, therefore, the following as the approximate statement of the aggregate of funded national, railroad, municipal and corporate debts in 1875, intended to be * The following statement of the debts of the respective States in 1875, as compared with 1860, is compiled from an elaborate table printed in the New York Bulleits of February 8, 1876 showing the relative increase of population, taxation and debt in the several States, viz.: 1860. 1875. $1,162,727 $5,272,688 82.148 3,849,000 175,000 312,000 7,175,978 29,465.204 ......... 2,563,,506 50,000 5,014,500 34.192,975 28,;.28.686 95.000 2,496i,300 38,638,961 23,233,137 ..............t1,231.000 14,885,167 11,372,677 ..............18.792.563 14,250,234 7,949,920 9,597,741 5,003,538 2,649.335 1,588,136 11,3'29..47 1.480,972 o00,000 2.252.000 2.563,65.3 2,755,000 322,296 543.056 .......... 458,228 23,903,000 20,839. 000 .............. 1,.'385,775 22.003.441 33,5-48 309 11,001,720 17,068,094 5,579.244 2.159.517 9,558,935 28,952.345 16,643,667 25,031,000 6,691,574 7,674.702 3,170.750 10,986 500 158.000 1,4.:3.767 6,027,000 12,132,000 7,i'l,707 6.383,087 10,0293,903 19.061.645 3,592,622 16,483 780 .......... 5.321,914 3,88,000 3,472,000 .......... 960,000 .......... 290,477 $66,781,525 $367,146,023 Maine................................................ New Ilampshire...................................... Vermont............................................. Massachusetts...................................... Rhode Island......................................... Connecticut.......................................... New York............................................ New Jersey.......................................... Pennsylvania........................................ Delawyare............................................. Maryland............................................. District of Columbia................................. Ohio................................................. Indiana.............................................. Michigan............................................. Illinois........................................ Wisconsin............................................ Minnesota..................................... Ion.....wa......................... 32 6 540 Nebraska................................................ Iisrosri............................................. Kalsas.................................................. ~ir-,,nia.............................................. West Virginia........................................ Kentucky............................................ North Carolina...................................... Tennessee............................................ South Carolina....................................... Georgia............................................... Florida............................................... Alabama............................................. Mississippi........................................... Louisiana............................................ Arkansas............................................. Texas............................................... California............................................ Nevada............................................... Oregon............................................... i 121 6 HAND-BOOK OF FINANCE. negotiable in the financial centers of Eutrope and North America, viz.: National debts................................. $23,400,000,000 Railroad debts................................... 5,000,000,000 State and municipal debts........................ 4,250,000,000 $,-32,650,000,000 The actual liquidation of this vast suim, amounting to just about eight times the total of all tihe gold and silver used as money in Europe and America, is of course not to be contemplated-it is impossible. In countries where the revenue is sufficient to pay the interest on the public debts and all other expenses, without leaving a deficit to be added to the principal each year, the national debts will in most cases become permanent institutions, the principal payable never, as in Great Britain; and in a fbw cases, as in Great Britain and the United States, the burden of annual interest may be reduced from year to year, unless the process of reduction is interrupted as in most cases it has been - by expensive wars. But in many countries whose governments are infirm, and whose revenues are fluctuating and uncertain, the high rates of interest they are obliged to pay insures the ultimate bankruptcy of the national treasuries, and the final repudiation of the debts, as in the cases of Mexico and Spain. The very magnitude of the volume of funded debts in Europe and America is now compelling a reduction in the general rates of interest for money, a decline which it seems must become permanent as one of the characteristic features of this ena of debt, and affecting all the employments of capital. Until the aggregate volume of annual interest on the funded debts of Europe and America is reduced to a point where it can be paid without distress to the corm 122 THE ERA OF DEBT. mercial and industrial interests from which the interest is drawn, there will be frequent defaults and repudiations on large debts. This would of itself divert capital to the securities of the best credit, and by its concentration on them establish lower rates of interest for money throughout the world. At say 5 per cent (which is probably about the average of the stipulated rates in the various classes of funded debts referred to in the preceding pages), the total annual interest amounts to about $1,600,000,000. Payment of the principal being left entirely out of the question as impossible for any considerable portion of it, this item of the aggregate annual interest is one of the three great factors in the financial problems of the time, the other two factors being the amount of non-interestbearing debt, or paper money, and the amount of gold and silver in the commercial world available for use as money. In endeavoring to give the relative proportions of these for Europe and America, there seems no way but to include a great portion or nearly the whole of the debts of South America, Egypt and India. Portions of these are, of course, held in the countries where they were created; but it is well known that the great bulk of the South American loans, as well as those of Egypt, Turkey and India, were negotiated in London, and though the interest on these debts would be paid by the industries of the countries whence they came, the products of those industries would first have to be sold for the money of Europe. For Europe and North America, with their aggregate of 357,000,000 of population, of which say 340,000,000 are civilized and commercial people, I should therefore 123 HAND-BOOK OF FINANCE. estimate the three above mentioned factors at about the following proportions in 1875, viz.: Paper money.....................................$3,100,000,000 Annual interest on funded debts................... 1,600,000,000 Stock of gold and silver used as money............. 4,00()0,U()O,000 The next item having an important bearing on the use of money, anrid consequently on the demand for gold and silver, either for circulation or as bank reserves held for the redemption of paper money, is the increase of traffic. On this point there can of course be no statistics that will not be largely conjectural. As an index of the volume of traffic at any time in the past twenty years, I have assumed that the aggregate of bank clearings in the ten largest commercial cities of the United States represents about one third of the total volume of payments of money in the traffic of the country. In New York the daily average clearings of the banks, exclusive of the stock exchange transactions, is stated by the manager of the clearing house as averaging $40,000,000 per day in 1874. The average daily clearings in Philadelphia in 1874 were about $7,500,000; in Chicag,o, $3,500,000; in Baltimore, Pittsburgh, Cincinlnati, St. Louis and New Orleans together, $5,000,000. The aggregate transactions of the clearing houses of the ten largest cities of the United States, exclusive of the stock exchange business in New York, in 1874 was about $64,000,000 daily, of which about 62 per cent was transacted through the New York clearing house. If this aggregate of $64,000,000 daily comprises, as I have assumed, one third of the total payments of money in comnmercial transactions, exclusive of the stock exchange business in New York, it would imply payments of currency to the extent of $128,000,000 daily, thus giving 124 THE ERA OF DEBT. an aggregate of $192,000,000 paid daily in commercial tra,sactions. This would imply that nearly 18 per cent of the total of $750,000,000 of paper currency was paid out each day, thus using the whole volume of currency in every week, but leaviing an average of say 78 per cent of it resting temporarily in the national treasury, in the banks, and in the pockets of the people. Upon the presumption that the New York bank clearings, exclusive of the stock exchange business, represent nearly 20 per cent of the total volume of payments in commercial tralsactions ill tile United States, we may estimate the increase of traffic in the United States by the increase of bank clearings in that city, and in Europe by the increase of the London clearings (given in dollars), as shown in the fbllowing table, viz.: LONDON CLEARINGS. Years ending Apl. ............ .............. .............. .............. .............. .............. .............. ............... I.............. .............. i.............. .............. $15,278,055,000 17,670,195,000 18,603,116,500 20,092,315,000 26,748,610,000 30,016,675,000 29,970,000,000 NEW YORK CLEARINGS. Year ending Sept. 30. 1854.............. 1855.............. 1856.............. 1857.............. 18)58.............. 1859.............. 1860.............. 1861.............. 1862.............. 1863.............. 1864.............. i865.............. 1866.............. 1867.............. 1868.............. 1869.............. 1870.............. 1871.............. 1872.............. 1873.............. 1874.............. 1874..............20,850,681,962 971,231,280 29,970,000,000 I i i I I i i i I 125 Cash Balances Paid. $297,411,493 289,694,137 334,714,489 365,313,901 314,238,910 363,984,682 380,693,438 353,,983,944 415,530,331 677.626,482 885,719,204 1.035,765,107 1,066,135,106 1,144,963,451 1,125,455,236 1,120,318,307 1,036,484,821 1,209,721,029 1,428,,582,707 111.52,372,108 971,231,280 Currency Exchanges. $5.750,4,:-)5,987 ,5.-62.912,098 6,906,213,328 8,333,226.718 41756,664,386 6,448,005,956 6,23t,143,056 5,915,742.758 6,871,443,591 14,867,597.848' 24,097,196,655 26,032,384,341 28,717,146,914 28,675,159,472 28,484,288,636 37,407,028,986 2-,,804,539.405 29,300,986,689, 32,636,997,403 33.97'),773,942 20,850,681,962 HAND-BOOK OF FINANCE. These figures for the New York clearings include the stock exchange business, which in 1874 comprised about 40 per cent of the whole. But even deducting this, the increase since 1854 is about 150 per cent. The London clearings are, I believe, given exclusive of the stock exchange business, and these show an increase of nearly 100 per cent in the six years. From these facts, together with the vast increase of railroads, which have stimulated internal traffic in all countries to a much greater extent than is shown iil their export or import trades, it seems reasonable to conclude that the total volume of traffic nearly quadrupled in the twenty-five years from 1850 to 1875.* Further evidence in support of this estimate of the increase of traffic is to be found in the value of the tonnage and in the gross earnings of the railroads as compared with twenty-five years ago. These items for the United States are given in Poor's Railroad -[anual as follows: Railroad Value of Gross Earnings Mileagc. Railroad from Freight Tonnage. and Passengers. 1851................. 10.982 $810,725,200 $39,406,358 1870................. 53,399 10,875,750,000........... 1875................. 72,623 (say) 15,000,000,000 503,065,505 * Much has been said of the diminished use for either paper currency or coin by reason of the economizing expedient of the clearing house system. The extent of this I estimate as follows, viz.: The total daily bank clearings in Europe and North America do not exceed $300,000,000; deducting say 3y per cent for "balances" paid in money, it would leave the total economy of paper money and coin say $290,000,000. This is the total extent of the economy for one year as well as one day. 126 THE ERA OF DEBT. EXPLANATION OF DIAGRAM No. 2. Gold and Silver. The upper double line is intended to show the probable aggregate of gold and silver used as money in Europe and North America, the presumption being that nearly the whole increase was of gold, the continuous movement of silver to Asia having prevented any considerable increase of that kind of money in Europe or North America, the effects of the increase in the production of silver from 1863 to 1874 having been neutralized in this respect by the demonetization of silver in Germany. Stock of Gold as Money. The line of dashes (- ) is intended to represent the stock of gold used as money in Europe and North America, it being assumed that about 80 per cent of the average annual increase of gold in the world from 1848 to 1870 was added to the stock in these countries. Volume of Paper Jfoney. The great fluctuations in the dotted line, representing the volume of paper money, are explained by the following facts: First, an increase in Austria from 1854 to 1858 of about $100,000,000. Second, an increase in the United States from 1862 to 1866 of nearly $1,600,000,000, about $1,000,000,000 of this being composed of the 7-30 and compound interest notes and the various issues of certificates of indebtedness issued by the treasury, which, though not of the same class of paper as the other treasury notes and bank notes, did circulate to a very large extent as money. The great bulk of this had, however, been retired by 1869, leaving the stock of paper money in the United States about $600,000,000 greater than in 1861. Third, an increase of nearly $400,000,000 in France from 1869 127 HAND-BOOK OF FINANCE. to 1873. Fourth, an increase in Italy of $300,000,000 from 1861 to 1876. Fifth, an increase of probably $200,000,000 in Russia in the last ten years. Besides these greatest additions, there was an increase of about $120,000,000 in Germany, and about $45,000,000 in Great Britain, in the whole period, and an increase in Switzerland of $11,000,000 to $12,000,000 from 1870 to 1873; $12,000,000 in Belgium from 1872 to 1873, etc. Annual Interest. This line has been drawn with reference to such events as the civil war in the United States and the Franco-Prussian war, concurrent with the increase of railroad and municipal debts. The courses of the lines in the diagram show the following changes in the percentage of money to debts, or promises to pay money, comparing 1845 with 1875, viz.: 1845. 1875. Percentage of gold and silver to paper money........... 200 140 Percentage of gold to paper money.................... 75 68 Percentage of aggregate of gold and silver to annual 600 260 interest......................................... Percentage of gold to annual interest.................. 225 131 Percentage of gold and silver to all obligations to pay 160 90 interest and redeem paper money................. Percentage of gold to all obligations to pay interest and 56 45 redeem paper money............................. .~~~~~~~~4 128 DIIAGIR SIIOWI-NG T]iIE -APPEOXIMAI.TE AM-NOU.NTS or, G()LD -',-,D OF GOLD AN.-,D S TilIE TOTAL VOLUM.NE OF PAKPEE'!ONE,-Y IN,-Ei For full explain 7~ ~~~~~~~~ - -- -t 1545 --- - _______ _ __ I __ - t i Ff isso f {\t ______ I __4Ff __ 1851 \f -4~- - 1846 18 4 3 f' ~ 1 ~ ~ 18 49 1 1851 -1852 __ _ _ 1 8 5, —f ~ F ~ _. \ F 1860: ~ L ~ 18621L 1862 - F F F 1864I F f 1868 II t L 1869 _ _ _ _ _ _ I L I181-0F F 18 71,t-2$ f __ I I ~ ~ ~ ~ ~ IP{ F { F 1863 - f~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ F I ~~~~~~~~~~~~~~~~~~~~~~~~~~~~ _~~~~~~~~ Ii If t-I-i ___-li 1875~~ I I I I_ I i II1 I18&) F LLiL __ J I _ i I I i i I I i i . iI i i i I I i i i I - i iI i I i I i I I i i I I 11 i iI i i i I i i i i i i i I i 11 i i i i I I I I i I I I I I I I I i I I I I I I I I I I I 11 I I I I I I I I I i t, I I I I I I I I -1 I I I I I i I I I I I I I I I i I I I I I I I I 1 1 i I 11 -1 I I I I I I I I I i I I II I I I I I I i I I I I I I I I I I i. I I i I I I I I I I I IC II' II' ii I I I I I I I - - 30 30 - , -. ~ g ~ 8 8 8 i cars I I I I I I i i i i t z 11 1; ii ~~ ~ ~ ~ ~ ~ - ~ ~ ~ ~ o o s'~g __ fl ~;.~___ - __ ________ _____ OO9' ~;. -L - -— _ ~ ___ ___ ______ ___ OOb __ _ ~___ _______________ __ _____ _____ ()()1 fl ~<~ ooif: ____ oou. I I _______ ___ I I I I I I I I I I I OD LI iil L 1. I i I i I I i I i i i i i Z- - I I I I I I I I I I I I I I I I I I I I I I i I I I I I I I I I I I i I I I I I I I I I i I I I I 3 I I i I I I' I i I I I I I I I — 11-1 (1, :q I I l I : t I I i i .8 CHANGES IN THE VALUES OF THE PRECIOUS METALS, AND THEIR EFFECTS ON PRICES OF COMMODITIES. UST at present the commercial and financial world is perplexed with the causes of what is called the 'low price of silver." Many are disposed to refer this almost wholly to the increase in the production of the metal; others more largely to the demonetization of silver in Germany; and still others claim that the decline in the value of silver, while it has been greatly increased by the above mentioned causes, was primarily ail erroneous expression for a rise in the value of gold, this rise being shown not only in the decline in the gold price of silver, but of all commodities. One of the most indisputable facts in connection with the vast increase in the production of gold from 1849 to 1854-5 was that it caused a general "rise of prices." I have made comparisons of the prices of a number of staple commodities in New York city in 1845 with those in 1854, and find that the average rise in that period was over 50 per cent (see tables of prices at the end of the book). This rise has been by some attributed to changes in thie tariff, anl assumption which I think is to a large extent erroneous. Aside fi'om this there was no other feature of that period to which the rise could be attributed than the increase in the stock of gold in the world used as money. Professor Jevons compared the average of prices in 1849 with the average in 1865, HAND-BOOK OF FINANCE. and concluded there had been a rise of about 21 per cent, and his opinion was that the real permanent rise due to the increase of gold was about 21 per cent. I do not see how it is possible to avoid the conclusion, after investigation, that this estimate of the rise of prices was too low, and I have prepared the following table of average prices of thirteen leading articles in New York city either about the end of December, or in the first weeks of January following, in each one of three years of each period. Thus, the average price of a ton of iron in the winters of 1845-6-7 was $36; in the three winters of 1854-5-6 it was $33; in the three winters of 1873 45 it was $28. Coal and iron were the only exceptions to the general rise of prices. But even including these, the general rise of prices in the period 1854-6 over 1845-7 was 58 per cent. AVERAGE PRICES OF LEADING ARTICLES AT THREE PERIODS (IN NEW YORK CITY). Quantities. 1873-5. (Gold Prices.) $36 36 31 28 28 50 40 63 50 60 70 44 48 Peri ods. 1854-. $65 40 24 33 41 43 36 36 37 45 45 31 66 Wheat............ Corn.............. Coal.............. Iron.............. Salt.............. Pork............. Beef.............. Rice.............. Sugar (N. 0.)..... Cheese............ Cotton............ Wool............. Leather........... Averages...................... $31 130 Articles. 1845-7. $32. 34 30 36 27 33 29 33 33 30 35 27 28 30 bushels.... 50 )ushels.... 6 tons...... 1 ton....... 100 bushels. - -. 30 barrels.... 40 barrels.... 1000 pounds.... 700 pounds.... 500 pounds.... 500 pounds. - -. 100 pounds.... 200 pounds.... $49 $45 VALUES OF THE PRECIOUS METALS. Advance in 18546 over the average of 1845-7, 5S per cent. In the period 1873-5 prices in gold were still 46 per cent above the average of 1845-7. It is true New York was not the world; but its markets were governed by those of the rest of the world, and after making all due allowance for the effects of causes local to the United States (the tariff, the influx of emigrants, etc.), it is difficult to avoid the conclusion that the general rise of prices due to the increase of gold in 1854-6 was over 40 per cent. The values of the precious metals can be measured only by their exchangeable value for other commodities, and this general rise in the values of commodities was the index of the depreciation in the value of gold whichi Chevalier and others were predicting, but which in fact had already come while they were arguing about it. At the latter date, with which Professor Jevons made his comparison of prices, the average product of gold had decreased $25,000,000 or $30,000,000 per annum, and the excessive depreciation of its value was being recovered by reason of various causes. First of these was the vast increase of traffic, and the consequent necessities for the metal as a circulating medium. Second, the greatly increased use of gold in the arts. But in 1860 began a series of events which exercised an immense influence to advance prices of commodities, independent of the recovery in the value of gold. The first of these was the war of Italian liberation in 1860; next the civil war in the United States, lasting from 1861 to 1865; next the Austro-Prussian war in 1866. These three wars caused an aggregate destruction of life and prop erty in six years scarcely equaled by any preceding 131 HAND-BOOK OF FINANCE. period of twenty years; in fact, at the beginning of the Italian war the peace of Europe had not been disturbed by any great war since that in the Crimea, ending in 1856. These events were the main cause of a further advance in prices of commodities, which for a time concealed the rising value of gold. The waste of the wars and the diversion of industry had diminished the stocks of commodities, and their prices rose in propor tion for some time after the destruction hlad ceased. The decline in prices of commodities was again deferred by the Franco-Prussian war, ending in 1871, the great est effects of which, however, were apparently overcome by 1872-3. It was then that the effects of the dimin ishing stock of coin, the increase of obligations to pay money, together with the increasing stock of commodi ties, began to show themselves in various minor panics in Europe, preceding the culmination, in 1873, in the United States. From 1867 to 1872 there had been an average decline in the currency prices of all leading commodities in New York of from 30 to 35 per cent from the prices of 1867-8. This, it is true, was mainly the effect of the appreciation of the paper currency (which advanced from an average value of 70 cents on the dollar in 1867 to an average of 89 cents in 1872 27 per cent); but I think not wholly. The average of prices in 1875-6 was about the same as in 1851-2; but this latter period was before the whole rise caused by the increase of gold had been experienced. Prices had been much higher from 1854 to 1860. y It will perhaps be said that if the theory of a depre ciation in the price of gold in the period from 1845 to 1854 was correct, it should have been shown in a rise in the gold value of silver. But this was prevented by 132 VALUES OF THE PRECIOUS METALS. the fact that at that period silver was the principal metallic currency of Europe. Great Britain had demonetized silver in 1816, but the great bulk of tile metallic currency of the continent was silver. The legal value of this as compared with gold being permanent, the value of silver as money was tied to that of gold, and fell with it. Or, viewing it from the opposite side, we may say that the depreciation of gold was greatly diminished by its fixed legal value relatively to silver. Had gold been the exclusive standard of values in 1854, the rise in prices of commodities would have been twice as great. The result of the severance of the two metals, by the demonetization in Germany, and practically in France, at a period when the stock of gold is diminishing, has been a decline in prices of all commodities-including silver, which has been largely reduced in some countries to the condition of a comnmodity. The demonetization of silver is not, of course, the sole cause of the decline of prices in the last four years. The vast load of war debt accumulated in Europe and the United States from 1860 to 1871 was steadily increasing the rates of interest for money. During that period the United States, Italy, Austria and France were in the market for enormous sums. The capital or wealth which they borrowed was destroyed in the wars, but the taxes were increased to pay high rates of interest on what no longer existed, and therefore was no longer the means of increasing the wealth of the world. The difference between the effects of the agencies which have produced the railroad debts and those which have produced the war debts is apparent. The former class represents something that is still ini 133 HIAND-BOOK OF FINANCE. existence and operating to aid in the creation of the wealth to pay interest on the principal. The latter represents something that has been annihilated, the loss not being felt at once, but deferred and distributed over a number of years in the taxation to pay interest. It was this which, about 1872, began to make an increasing demand for the precious metals to reimburse capitalists for the cost of the wars. Philosophers may argue that gold and silver are only measures of values, and that one dollar of gold will measure a thousand dollars' worth of conmmodities as well as one, but it is also true that the desire for the actual po8ssession of anything that seems to be getting scarce imparts to it an adventitious and phenomenal value. Such was the case in 1872-3, when capitalists began to doubt the ability of the nations to pay the greatly increased load of annual interest. It was this doubt which caused the first reaction, and the reaction once started, the cause reproduced itself and acquired momentum as it progressed. The first cause of the great reaction in 1873 was the immense load of war debts, but this has unquestionably been greatly aggravated in the last two years, and more especially in 1876, by the demonetization of silver. The conclusion, then, is that the "decline in the value of silver" is in fact almost wholly the result of an equal divergence in the values of the two metals. The diminished stock of metallic money available in Europe, resulting from the demonetization of silver, has enhanced the value of gold and diminished the value of silver. Both metals have, for centuries, been maintained at an average value as money far above their intrinsic value as commodities. Money must be not only a standard of values, but a circulating medium. 134 VALUES OF THE PRECIOUS METALS. Either increased use or diminished supply may cause a rise in the value of the thing used. Hence, if the work of $4,000,000,000 of gold and silver be delegated to 82,000,000,000 of gold, the gold will rise in value and the silver will depreciate. I conclude, therefore, that the change in the relative values of the two metals is due to the demonetization of silvcr; and that if gold, instead of silver, had been demonetized by Great Britain and Germany, the value of gold would have fallen and that of silver would have appreciated. In MIarch, 1876, a select committee was appointed by the British Parliament "to consider and report upon the causes of the depreciation of the price of silver." The committee immediately began its inquiries and continued them about one month, during which they held six sessions, and called in for examination the following persons: Messrs. IHIenry Waterfield, Sir Hector Hay, Stewart Pixley, Robert Giffen, Frederick G. Wilkins, Patrick Campbell, Robert Wigram Crawford, Gustavus Peitsch, Samuel Seldon, William Robinson, Colonel Henry Hyde, J. T. Mackenzie, Ernest Seyd and Walter Baghot, all persons of high repute in matters of statistics relating to money and finance. The report of the committee, printed in July, made a large folio volume of two hundred pages, equal to probably fifteen hundred pages of an ordinary 12mo book, and containing an enormous mass of figures and estimates ill the papers put in by the witnesses. The substance of the information on the question under consideration was, however, summed up in the following few paragraphs on page iv of the committee's report, viz.: " Your committee are of the opinion that the evi 135 HAND-BOOK OF FINANCE. "deuce taken conclusively shews that the fall in the price of silver is due to the following causes: "(1) To the discovery of nlew silver mines of great "richness in the State of Nevada. "(2) To the introduction of a gold currency into Germany ill place of the previous silver currency. "This operation commenced at the end of 1871. ' (3) To the decreased demand for silver for export "to India. " (4) That the Scandinavian governments have also " substituted gold for silver in their currency. "(5) That the Latin union, comprising France, Bel"gium, Switzerland, Italy and Greece, have since 1847 "limited the amount of silver to be coined yearly in "the mints of each member of the union, suspending "the privilege formerly accorded to all holders of silver "bullion of claiming to have that bullion turned into coin without restriction. "(6) That Holland has also passed a temporary act "prohibiting, except on account of the government, the "coining of silver, and authorizing the coining of gold." "It will be observed that two sets of causes have been "simultaneously in operation. The increased produc"tionI of the newvly-discovered mines and the surplus "thrown on the market by Germany, have affected the "supply. At the same time the decreased amounts "required for India and the decreased purchases of sil"ver by the members of the Latin union, have affected "the demand. A serious fall in the price of silver was "therefore inevitable." "' It is, however, an important and remarkable fact, to which it may be convenient to call attention at once, "that though the increased production of silver in the 136 VALUES OF THE PRECIOUS METALS. "United States is a fact beyond question, no increase "of imports of silver from the United States to Great "Britain has taken place since the year 1873, when the "average price of silver was still 59id. per ounce. "Indeed the amount of the imports of silver into Great "Britain from the United States for the year 1875, viz.: "~3,092,000, is the smallest since the year 1869. In "the same way, though the new currency laws of Ger"many affected a vast silver coinage, the sales of silver "actually made up to the 26thl of April in the present "year do not appear to have exceeded ~6,000,000 dis"tributed over several years. Your committee, in "pointing to these circumstances, are far from saying "that the impression produced on the minds of the "dealers in silver was not justified by the causes in "operation." It will be seen that of the "six callses" enumerated by the committee as operating to depreciate the value of silver, four are really the same thing, viz.: the movement in Europe by Germany, leading the Scandinavian States, to demonetize silver. The decreased demand for silver for export to India seems to be rather one of the results of the original decline caused by the demonetization, than an independent cause. The discovery of new mines in Nevada, mentioned by the committee as the first cause, is acknowledged to be only a source of apprehension, but not yet of any increased supply of silver. It is admitted, even by those who have at times advocated an exclusive gold standard,* that it is impos * Probably if there were gold enough for all the world, it would be best that there should be only a single standard of value throughout the world, and that one -gold. But this is impossible. Some have doubted whether there is gold enough even for the nations which now intend to use it; and there certainly ix not enough for all the world.-London Economist. 6* 137 :HAND-BOOK OF FINANCE. sible for all nations to have the exclusive gold standard. The unavoidable result, therefore, of the adoption of the exclusive gold standard by a few of the leading nations possessing the financial preponderance of the world is to compel the remaining nations to practically adopt silver alone. But at the same time the demonetizaltion of silver by a few leading colllmicrcial nations depreciates the metallic currency and thie money obligatiolis of the nations using silver as a standard of values. This disorganizes international trade and is a direct blow at all international relations.* The divergence in the respective values of the two metals is the measure of the divergence of national interests. The tendency of all this is to diminish the intercourse of nations and remand the world to the old narrow ideas of the necessary antagonism of the people of different countries. The original establishment by law, in Great Britain,t France and the United States, that the legal values of * The London Economist described the effects on the East India trade of the decline in the value of silver, in the first two months of 1876, as follows, viz.: The consequence of the low value of silver is that the rate of exchanl,ge (in Calcutita) is now ls. 9d. lfar. per rupee (or less), the lowest or almost the lowvest ever known. And this operates as a direct discouragement to ship goods to India. These goods are paid for in rupees, and when the merchant wants to bring home those rupees to England hlie finds that they do not go so far as they used to do. He has to pay much more for every ~1,000 bill on England, and this extra cost destroys or diminishes his profit. If new silver should still continue to come into market the same process must a) on. The first step must be incessantly repeated. The value of the rupee must fall as against sterling money; instead of being Is. 9d. it may fall to lIs.;d. The Indian revenue is received in silver, and, therefore, the less far silver goes in buying, the poorer will the Indian government be. And this is of more instant importance to the Indian government than almost any other, because its foreign payments exceed those of most governments, and those payments are made in gold. It has to pay interest in gold on a very large debt in England, to pay home salaries, maintain home deSpts, and buy English goods and stores all in gold; and the less valuable silver is in comparison with gold, the less effectual for these necessary purposes will the Indian revenue be. t Abrogated in Great Britain by the law of 1816. 138 VALUES OF THE PRECIOUS METALS. gold and silver should be as 1 of gold to 1521 of silver, was the result of nearly two hundred years' observation of the following facts, viz., that the intrinsic value of each metal as a commodity, aside from its uses as currenvcy or money, was continually fluctuatirng in accordance with the increase or decrease of its production, but that this increase or decrease of production, and consequent increase or decrease of value, was never the same in both metals at the same time. The experience was that swhen the production of gold had diminished, that of silver had either remained stationary or increased, and vice versa. There was no theory to show that this should necessarily be the case, but such was and had been the fact for over two hundred years. In order to prevent wide fluctuations in the standard of values, it was souglht to establish a bond between the values of the two metals, so that the diminishing value of the one might be checked by either the stationary or the increasing value of the other. Experience had shownl that the average commercial value of silver had been as 151 of silver to 1 of gold, and that though either one might temporarily change in value so as to change this relative value, it would certainly come back to it sooner or later if both metals were equally used as money. As previously remarked, the values of both metals is to a very large extent fictitious; there is no other use, than as money, that would warrant more than oniie-fourth the present values of either gold or silver. The depreciation of 29 in the 100 of the value of silver (or the increase of 41 per cent in the value of gold, whichever one may choose to call it) which took place from October, 1874, to July, 1876, mainly as the result of the demonetization of silver by Germany, proves it. 139 HAND-BOOK OF FINANC],. It was, therefore, to prevent fluctuations in the standard of values that the two metals were, so to speak, "yoked together" by the legal establishment of their values as permanent at 151 to 1. It was believed, and experience has proven, that if both metals were equally used as money, this relative valuation was the point from which there would be the least departure. During the discussions of this subject in Congress (1875-6) there seemed to be a disposition on the part even of the advocates of the double standard to change the relative legal values of gold and silver by the coinage of a larger silver "dollar," as compared with the gold "dollar." But any departure from the standard of 151 to 1 is the same in principle - only less in degree - as the complete demonetization of either of the metals.* To meddle once with a rule established by the experience of centuries, only makes the necessity of meddling again at some future time. The following table is from the annual report for 1875 of the United States Commissioner of Mining Statistics: * The law of April, 1792, provided that the ratio of gold to silver in all coins current as money in the United States'- shall be as "fiflteen to one," and for 40 years the silver dollar of the United States was of that proportional value. But by the reduction in weight of the gold coins the ratio was increased to 16 to 1. The subsequent laws regulating the values of coins had changed this to 15.988 to 1 in 1837, which continued to be the ratio until the coinage of the trade dollar under the law of February, 1873, made it 16.27 to 1. 140 VALUES OF THE PRECIOUS METALS. RELATIVE AVERAGE ANNUAL VALUES OF GOLD AND SILVER. Date. Ratio. Authority. A.D. 1526 1543 1561 1575 1551 1559 1604 1612 1619 1623 1640 1665 1667 1669 1-,70 1679 1680 1687-1700 1701-1720 1721-1l740 1;41-1l790 1791-1 S00 1801-1810 1811-18:20 1821-1830 1831-1840 1841-1850 Apparent relation of market-valuie, as deduced from the British mint-regulations, some absurid and u..successful ) experiments in coinage being disregarded. French mint-regulations. German imperial mint-regulations. British mint-regulations-experiments disregarded. Upper German regulations. French mint-regulations. t Upper German regulations. British regulations. tFrench regulations. Ratios calculated from the bi-weekly quotations of the Hamburg prices-current, giving the value of the gold ducats of Holland in silver thalers, down to 1771, and. after that, in fine silver bars. The nominal par of ex change during this period was 1:14.80; and the quota ione show the variations of the market rate in percentage above or below this. At par, 6 silver marks-bauco were equivalent to one ducat, 68 20-47 dticats containing one mark (weight) of fine gold, and 279,/ silver marks-banco containing one mark (weight) of fine silver. Hence, J 6X68 20-47*27,9=14.80, the par ratio. The London quotations. These give the price of a given weight of standard silver in shillings and pence sterling. Bearing in mind that there is in Great Britain no charge for coinage. and, hence. that the price referred to varies exactly as the market-value of the metals, we can calcu late the ratio as follows: The standard gold is 1 fine, and its value is fixed at 77s. 10~d., or 934.5 pence per I ounce troy. Hence the value of an ounce of fine gold is 1 2 of this sum, or 1019.45 pence. The standard silver, on the other hand, is 3 7 fine; hence an ounce of fine 4 —6 silver is worth 1.081 times as much as an ounce of standard silver. If the fixed value of an ounce of fine gold be divided by 1 081 times the quoted price of an ounce of standard silver, the quotient is the ratio desired. Thus, if x be 18.5 35 33 1 1019.45 943 the quoted price per ounce in pence, 1 0 81 x x (very nearly) is the ratio. Briefly, dividing 943 by the price in pence of an ounce of standard silver gives the ratio correctly to the second decimal place. London being the acknowledged center of the commercial world, this ratio determines the relative value of the metals among civilized nations. The table shows annual averages only. The lowest monthly value of gold was 15.12 in May, 1859, and the highest 16.35, in October, 1874. The annual average for 1874 here given Is calculated upon the prices of eleven months, ending November 30. 11.30 11.10 11.70 11.68 11.17 11.44 12.10 1 3. 30 13.35 11 74 13.51 15.10 14.15 15.11 14.50 15.00 15.40 14.97 15.21 15.08 14.74 15.42 15.61 15 51 15.80 15 67 15.83 1851 15.46 1852 15.57 1853 15.33 1854 15.33 1855 15.36 1856 15.33 1857 15.27 1858 15.36 1859 15.21 186i0 15.30 1861 I 15.47 18ii2 15.36 1863 i 15.3,i 1864 15.40 1865 15.3.3 1866 15.44 1867 15.57 1863 15.60 1.e69 15.60 1870 15.60 1871 15.59 1872 15.6:3 1873 15.90 1874 16.15 ! i I 141 HAND-BOOK OF FINANCE. The foregoing table only gives average annqual values; but in order to show the fluctuations caused by the increase of gold from 1848 to 18S53-5, and also the much greater ones caused by the demonetization of silver in Germany, I have made the following table, showing the Spel cent of premium on each of the metals as expressed in the value of the other at various periods: Premiumon on Silver over 15, to 1. ............ .23 per cent 1.50 " 2.45 " 1.00 " ............ ............. ..................... ............. ...... I.......... ..................... Ratio of Silver to Gold in the Lt'lndon Marklent. 15.80 to 1 15.46 to 1 15.27 to 1 15.12 to 1 15.33 to 1 16.35 to 1 16.45 to 1 16.97 to 1 17.08 to 1 22.54 to 1 18.84 to 1 1821 to 1830, average.. 1851, average of year... 1857 1 t..5 1859, May............. 1863, year............. 1874, October.......... 1875, Janiuarv........... 1875, July............. 1876, January......... 1876 July............. 1876, September....... EXPLANATION OF DIAGRAM No. 3. In diagram No. 3 I have endeavored to make apparent what has been the progress of the values of tlhe precious metals as compared with the values of commodities, and the principal causes which have at difierent times affeeted the values of each, the varying difference between the lines being what is understood as the "rising or falling of prices." The upper line in the diagramn -the line of dashes -begins with prices at what might be called "zero"' in 1845 to 1847; the rise of the line through 1851-2-3 I i 142 Pren-iilim on Gold over 1 to 15Y Time. 1.93 per ceiit ............. ............. ............. ............. 4.8 -per cent 5.48 il 9.48 11 10.18 11 45.28 21.54 11 DIAGI SHOWING THE FLUCTUATIONS IN THE VALUTES OF Expla)i(lttio~!.-The upper line (thus -- -) in the diagrs. The two lower lines represent the values of gold and silver as corn variations in the space between the upper line and the two lower lithe prices of 1845-7. For further explanation see page 142. !the puc-uationp. in the vaiu~ lt ~~~~~~h~ of File !......i — _lII i'l I-i- I ~___ _L lV_I I I ,/ -- J1 thetlu-uaion intheval i - -.- ~1 ~1 Xl t l~ _|. ____ I ~~~~F~ I-111.,I..I 2' t ~'~ tI )1 1 I I 1I I_ ,)f trcou s ta I' I I. ~ I —~/1.7 I —I-__ — 0I 41 __l__________L_L IT_I_I_I I :'-6 l W —/:- e _ _l_J;f_ t I H NO. 3. NODITIES AND OF GOLD AND SILVER SINCE 1840. icates the rise and fall in values of commodities during the period. to each other and as compared to the values of commodities. The ~resent the rise and fall of prices of commodities as compared with go Q bXzo cz) o; CO D CO c: w C d / wlsiJ i I T T lt IIC l i t I i i 1 N ____ 11 W-) - l_ I;a o! lt I _ I I I I J, _ _ i j_I t-t n 1_1~,o ~~~l~L_I II: ~-|1*_ _ D J i - 001;0ltics-X~i T c | F t | u X I _ _A i i~~~~-l _ -1 I i 1 i I I I I I I I I I I __b _'__ ___ _~~~Lof~o(4j~~~={=II S ver InF LI;D c: o s tD b b b t- t GO0 nO o w n Coo ) a ) O O H _ _ Hi\ __- ____ ____ .;Ali IL-! VALUES OF THE PRECIOUS METALS. 4-5 indicates the increased detnald for and consullliption of all sorts of commodities incident to the gold hunting fever which prevailed throughout the world. The great rise from 1860 to 1867 was largely the effect of the general progress of civilization and the general increase in the scale of expenditure in social life. But of the special events which increased the demand for and values of commodities, the four great wars imentioned wvere the most potent. These were the causes which operated to increase the,alzue8 of commodities independent of the increase or decrease of the stock of precious metals. These created a demand for new articles, viz.: munitions of war, and diverted labor from its usual employments to supp1bly them; the result being an increased demand for labor, and consequently an increased cost. The demand for labor continued temporarily after the wars to supply the waste incident to them. But this being done there was no longer so much employment, the supply of commodities became excessive, resulting in a decline of prices and of the wages of labor. (The "rise of prices" indicated at this period refers, of course, to prices in gold- the rise in currency prices was much greater.) But now taking the two lower lines, the continuous one representing the value of gold as compared with the values of commodities, and the dotted one representingy the value of silver as compared to gold and also to the values of commodities, we see a great desenet in the lines of both from 1850 to 1855-6. Silver declined because its value was "tied to the value of gold" by the laws then in force in the United States, France, and practically in the greater part of Europle, making one ounce of gold legally equal to from fourteen 14.1 HAND-BOOK OF FINANCE. to sixteen of silver.* Silver being the money of nearly all Europe, its value sustained the value of gold, and prevented a much greater decline. The whole difference between these values of the precious metals and the values of commodities was called "the risc of prices." * The following table shows the relative legal values of gold and silver in the coinage systems of various countries: RELATIVE VALUES OF GOLD AND SILVER IN THE COINAGE SYSTEMS OF COUNTRIES OF THE GOLD STANDARD. Relative Coins. Pure M'otal. Country. Gl. SleRelative Cod. Silentry. Gold. Value. Gold. Silver. Gold Silver. Graios. Ga l cas. Bogota..................... peso. Y peso. 22.49 141.009! 1 to 12y, Eg3ypt..................... pound. piaster. 115.5 14.298 1 to 123 Euaglaud....................pound. shilling. 113.001 80.727 1 to 14.2 Germany...................mark. mark. 5.531 77.16 1 to 13. Portugal................... 1,040 reis 500 reis. 25.087 176.824 1 to 14. Scandinavian Union....... crown. crown. 6.225 92.392 1 to 14.8 United States.............. dollar. subsid'y 2.3.22 347 24 1 to 14.52 ................ dollar. trade dol 23.22 378.)0 1 to 16.27 RELATIVE VALUES OF GOLD AND SILVER IN THE COINAGE SYSTE.HS OF COUNTRIES OF THE SILVER STANDARD. Relative Coins. Pure Metal. Relative Country. Relatlie Gold. Silver. Gold. Silver. Value. Grains. Greaits. Austria*................... gulden. florin. 11.2006 171.466 1 to 15M Mexico*................... peso. peso. 22.8477 377.1718 1 to 16Y~ Netherlands*.............. gulden. florin. 9.. 332 145 8.324 1 to 153 Russia*.................... 5 rubles. ruble. 92.5713 277.7158 1 to 149 *These countries issue a gold coin for commercial or trade purposes. RELATIVE VALUES O0 GOLD AND SILVER IN THE COINAGE SYSTEMS OF COUNTRIES OF THE DOUBLE STANDARD. ~Country. Relative Coins. Pure Metal. Relative Country. Rltv Gold. Silver. Gold. Silver. Value. Latin Union includes Bei ium, France, Italy and bwitzerlan d.............. 5 francs. 5 francs. 22.4012 347.22 1 to 15~, The "Latin Monetary Union," mentioned in the foregoing table, wras a convention ratified at Paris, December 23, 1865, between the governments named, 144 VALUES OF THE PRECIOUS METALS. But the value of gold began to rise with the increase of traffic and debts. The change in the money standard of Great Britain to one of gold alone in 1816 had as yet produced but little effect oil the world at large. But as great debts increased, and as immense suIms began to be negotiated in London, this law of 1816 began to operate to increase the demand for gold to pay interest in the only metal that England recognized as the standard of values. The evidence of this advance in the value of gold is in the fact that it soon rose above that of 1 to 151 of silver. The lines of the two metals, as shown in the diagram, had crossed each other about 1850, and now again they crossed about 1862, indicating that the "goloden era " had ended, agd th(t the "era of golden debt" had begun. The success of Germany in the war with France gave the former the means of attempting to follow in the footsteps of England. Germany demonetized silver, and depended upon the this convention constituting the governments into a union for the purpose of establishing a uniform system of weights, measures and valuations and forms of currency. The governments (Art: 2) contracted not to coin any gold moneys in any other denominations of coins than 1,000 francs, 50 francs, 20 francs, 10 francs and 5 francs, at the ratio of 1.612.90 grammes of standard gold (9-10 fine) to each 5 francs. Silver coins of the denomination of 2 francs (or less) were made a legal tender between individuals in the state that coined the silver for sums of 50 francs; but in payments from individuals to the state which issued the silver the coins were made legal tender in any sum. It was provided that the national treasuries of the several countries should accept silver coined by any of the other states in the union to the extent of 100 francs. The convention, however, fixed the limit of total coinage of silver during the continuation of the union to its expiration in 1880. The amount allowed to be coined by each country for 1876 has been stated as follows, viz.: Francs. France................................................................ 54,000,000 Italy.................................................................. 36,000,000 Belgium............................................................. 11,000,000 Switzerland................................................ 7,000,000 108,000,000 145 7 HAND-BOOK OF FINANCE. $1,000,000,000 she was to get from France as a war penalty, for the means of substituting gold for about $300,000,000 to $400,000,000 of her silver currency. France was not only obliged to borrow gold of all the surrounding nations, but to hoard all she could to avoid being obliged to accept a metallic currency of silver which had become depreciated by the operation of the laws of England and Germany. Thus the appreciation of gold went on, but even yet was to a considerable extent held down by the use of silver in the larger part of Europe; but with the beginning of 1876, when the new laws ill Germany went into full operation, and Germany began to sell off about $250,000,000 of silver, the two metals parted company. Silver declined until in July, 1876, it was nominally quoted as low as 46 pence per ounce, and gold was left as the only measure of values ill the leading commercial countries of Europe, Great Britain, France and Germany. Debts and the interest on them are payable in those countries only in gold. In the United States they have been made payable (by the coinage law of February, 1873,) in promises to pay gold, viz.: in United States treasury notes. Thus this increased demand for gold, present and prospective, (made prospective in the United States by the specie resumption act of January, 1875,) has increased its value. Debts are paid with commodities, but not until the commodities have been exchanged for money -gold. The decline of prices since 1872-3 is explained by the increased value of gold. The first effect was to cause a collapse in " speculative securities," viz.: bonds of railroads, etc., which were based on the expectation of a continuance of high prices for commodities, or in other words, a low value for gold. The losses which followed 146 VALUES OF THE PRECIOUS METALS. caused panic and a decrease in manufacturing industry and improvement enterprises. This diminished emplonyment for labor and necessarily decreased the consuinptive demiand for all commodities. This again caused still further cessation of industry and a further decrease of demand for commodities. Theorists have been jangling for three years about the cause of the reaction which began in 1872-3, and the decline of prices which has continued almost without interruption since. These causes are, however, not obscure. The progress of the physical sciences and of labor-saving inventions has undoubtedly had an important tendency to reduce the prices of nearly all manufactured articles and, to a small extent also, the values of raw materials. But the increased burden of debt, the increase of traffic (thus requiring a larger volume of the circulating medium), and the demonetization of silver, have all contributed to increase the value of gold beyond its equitable value as a measure for values of commodities. The era of golden debt, like the era of gold, has had its culmination, and the causes at work now are preparing the way for some new era in financial affairs which will, in all probability, be as unique as either of the two which have preceded it. No man can yet foresee what it is to be. It is, however, not difficult to distinguish a few tendencies that must continue to operate toward the new development. The first of these is the decline in the rates of interest for money in order to reduce the burden of funded and mortgage debt everywhere. This will be accomplished partly by the repudiation and complete loss of a very large portion of the existing volume of funded debts, and partly by the concentration of capital (seeking safety rather than 147 HAND-BOOK OF FINANCE. high rates of interest) on a smlalltr amount of debt. Another tendency that must continue, is the necessity for supplementing the stock of gold in the world with the stock of silver, and a universal recognition of both metals as money at about the same relative values they maintained prior to the era of gold. Until these things are accomplished, " prices" will continue to decline and the commercial world will be in distress. A great war in Europe would afford temporary relief by creating an extra demand for commodities, partly as munitions of war and partly to supply new stocks in place of those destroyed. But this would neither reduce the burden of interest on funded debts nor increase the stock of gold or silver, nor in any way decrease the demand for the precious metals. On the contrary, some nations would be obliged to pay interest in gold on the cost of the war, viz.: the value of the property destroyed and the industry diverted from its proper channels. Thus while a great war would temporarily cause a rise in prices, this would only be a reason for their ultimately declining to a lower point than before the war. Financiers and statesmen have taken an exceedingly narrow-minded view of this era of debt. While they have not failed to call attention to the magnitude of debt, it has only been in a tone of reproach to the commercial and financial community for indulging in what has been termed an'inflation of credit." The truth, however, is that the greatest part of the present burden of debt was created by war. The four great wars since 1860 (viz.: the Italian, the Austro-Prussian, the American and the Franco-Prussian) increased the national, municipal and State debts of the countries involved about seven thousand millions of dollars, or over 30 per cent of the total 148 VALUES OF THE PREcIOUS METALS. of present funded debts in the world. The increase of debt as the result of wars in the last sixteen years has been more than double the increase of debt from the expansion of the railroad system, and all other national and municipal improvements and enterprises in the same time. It is the war debts - not the debts of excessive enterprise - that have created the present burden of annual interest. It is war debts also that are represented in all the inconvertible paper money now afloat in the world. Now, it is not to be presumed that the "reign of peace" has beguin, or that it will begin any time in the next hundred years. In the last quarter of a century great wars have averaged less than five years apart. The wars of this period, also, have been more largely financial contests than ever before in the history of modern civilization. It is a trick of capital in all countries to persuade the people that their honor is at stake in the payment of all these war debts at the highest valuation the avarice of the holders may set on them. But it is plain that a few years more of such war experience as the last sixteen, would place the burden of annual interest and the redemption of the paper money beyond the ability of the people. Indeed, with gold as the exclusive standard of values, it is extremely problematic- whether "specie payments" could be maintained even in all the countries that do now propose to pay interest and redeem paper money in gold. The countries that propose to do this are Great Britain, France, Germany and the United States. The aggregate of paper money in these is about $1,700,000,000, and the total amnount of gold does not exceed $1,600,000,000. Assuming that an average reserve of 50 per cent would sustain the present volume of paper money - by con 149 v HAND-BOOK OF FINANCE. stant daily redemptions -at par with gold, it would require that an aggregate of $850,000,000 of gold should be evenly and constantly distributed in all the countries. But with so small a stock, outside of banks and national treasuries, the movements of foreign trade would soon disturb this distribution of the metal and cause suspension again, in one country or another.* Even if we state the problem upon a broader basis, it is equally difficult of solution, viz.: Europe and North America are now using an aggregate of about $7,300,000,000 of gold, silver and paper money as mediums of exchange. Of this amount over $3,100,000,000 is paper promises to pay gold or silver. But on just about three fourths of this aggregate of over $3,100,000,000 of paper money, specie payments * Early in the current year (1876) the London Economist, referring to the situation of the Bank of France as compared with its position in 1860, said: And here, just as in 1860, the principal component in the reserve is the comparatively appreciated metal. The metals have, indeed, changed places: in 1860 the metal which had augmented in value was silver; now the metal which has increased in value is gold. But the position of the Bank of France is, for the purpose now in hand, identical. It now holds an enormous amount of gold, which it would be dangerous to pay away; just as in 1860 it held a much smaller, though still considerable, amount of silver, to pay which would have been equally dangerous. O1' course, as long as the Bank of France suspends specie payments it does not feel this difficulty. If we may be permitted to say so, it is on a lower level altogether. It is not perplexed by the possibility of having to pay in the appreciated metal, for it does not, except in minor sums, and when it chooses, pay ill any metal. But as soon as the Bank of France performs its legal obligations, the problem which the defective currency system of France sets before it must be solved. There is, indeed, one obvious mode of solving it. There is something very singular in a difficulty which is caused by holding a commodity which has enhanced in value. The obvious remedy is to sell it in the market and to obtain the advantage of that value. If the Bank of France could sell its gold for silver at the present price, it would get a large profit; it would have done a capital bullion transaction on a magnificent scale, and the shareholders would be large gainers in consequence. In 1860 the Emperor Napoleon, to whom the accounts of the Bank of France were then constantly submitted, would not permit the natural remedy to be tried, and, therefore, the Bank of France had to forego the profit, and to change away the dearer metal with the Bank of England. But now there can be no choice; the sums to be dealt with are so large that no such palliative by exchange can be thought of. If cash payments are to be resumed in France, large sales of gold for silver must precede and accompany it. And the effect of such sales will. of course, be to raise the price of silver as compared with gold. The circumstances of the Bank of France will make the possession of much silver constantly essential to it, and the effect of this new large demand will be a rise of price. 10T 150 VALUES OF THE PRECIOUS METALS. have been suspended fbr many years. Even if it were possible for Russia, Austria, Italy, France and the United States to acquire the coin with which to resume specie payments on their respective amounts of paper currency, the amount of coin that would be drawn into national treasuries for that purpose would cause a contraction of over 20 per cent in the aggregate volume of circulating medium in the hands of the people of Europe and North America. It is beyond reasonable doubt that such a change would cause a proportionate enhancement of the vast volume of war debts, which would be shown in the corresponding decline in the prices of commodities. It would require that the'peace of Europe and America should remain undisturbed for at least ten or fifteen years before the industry of the people could produce wealth enough to pay off this increase in the burden of debt and so adjust the values of commodities and the value of money to the new basis. The improbability of such a peace is the measure of the improbability of the resumption of specie payments in all the countries where they are now suspended. 151 PUBLIC DEBT OF THE UNITED STATES Statement of the Character and Amount of Bonds and Other Forms of Indebtedness, July 1, yea? the years 1871-2-3-4). COMPILED FROM THE ANNUAL STATEMENTS OF THE SECRETARY OF TH Amount outstanding July 1, yearly-(omittii Date of Authorizing Acts. Prio r to 1815.. July 21, 1841 6 Jan. 28, 1847. 6 Mar. 31,1848. 6 Sept. 9, 1850. 5 Sept. 9,1850... June 14, 1858 5 June 22, 1860 5 Feb. 8, 1861. 6 Mar. 2, 1861. 6 July 17, 1861 6 Aug. 5,1861. 6 Feb. 25, 1862 6 Mar. 3, 1863. 6 Mar. 3, 1864. 5 Mar. 3,1864. 6 June 30, 1864 6 Mar. 3, 1865. 6 Mar. 3. 1865. 6 Mar. 3, 1865. 6 Mar. 3, 1865. 6 Jan. 14,'70 5 Jan. 20,'71 ........................ 1862 1863. 1 I _ 114 114 2,883 302 9,415 9,415 8,908 8,908 3,461 3,461 112.... 20,000 20,000 7,022 7,022 8,415 18,415 998 1,021 50,000 50,000 ...... 28 9,907 168,880 .......... .......... ..... 25..... .11.... 2875.... Old debt......... Loan of 1842..... Loan of 1847..... Loan of 1848..... Texas indemnity. Texas debt...... Loan of 1858...... Loan of 1860..... Loan of Feb., 1861 Oregon war loan. Loan of July, 1861 Bonds (for 7.30s). Five-twenty bds. Loan of 1863.... Ten-forty bonds. Five-twenty bds. Five-twenty bds. Five-twenty bds. Five-twenty bds. Five-twenty bds. Five-twenty bds. 5 per cents of 1881 Tot. funded debt I I I I Principal Payable. Title of Loans. 1861. 114 2,883 9,415 8,908 3,461 112 20,000 7,022 16,339 .... .... .... .... .... .... .... .... ....25 1866.!1867. 79, C 4 9,415! 7,160 8,908! 8,020 559 263 20,000 20,000 7,022 7,022 18,415 18,415 1,016 1,016 50,000 50,000 139,350 139,999 514,780 514,780 75,000 75,000 171,219 171,409 3,882 3.882 100,000 125,561 103,542 181,427 ..... 301,880 .......... ..... 0..... ............ 1864. 114 196 9 415 8'908 2,149 20,000 7,022 18,415 1,016 50,000 30,;43 510,780 ,42,672 73,337 ..... ..... ..... ..... ..... ..... ..... 774676 1865. 114 195 9,415 8,908 842 ..... 20,000 7,02' 18,415 1,016 50,000 139,031 514,780 75,00( 172,770 ..... 9X,789 ..... ..... ..... ..... ..... 110969(9 Demand.. Dec. 31,'62 Dec. 31,'67 July 1l'68. Dec. 31,'64 Demand.. Dec. 31,'73 Dec. 31,'70 June 1,'81 July I,'81. June 30,'81 June 30,'81 Apr. 30,'67 June 30,'81 Feb. 28,'74 Oct. 31,'69 Oct. 31,'69 Oct. 31.'70 June 30,'70 June 30,'72 June 30,'73 .............. ........... Union P. R.R. bds Treas. notes (old) Treas. notes of'57 Treas. notes of'60 Treas. notes of'61 Treas. notes of'61 Treas. notes of'63 Treas. notes of'63 Three years notes Three years notes Three years notes Three years notes Three years notes Comp'd int. notes Comp'd int. notes Three p. c. cert's. Tempor'ry loans. Certificates...... Tot. unf'nd debt U. S. notes...... U.S. notes...... U.S. notes...... U.S. notes...... Postal currency. Frac. currency.. Tot. U. S. notes and frac. cur... Gold certificates. Aggr. of pub. debt N. B.-None of the "Trust Funds" are included in the above statement, such as the Navy Pension Fund, the Indian Annuity ~ Funds, the Smithsonian Fund, etc., which are provided for by annual appropriations. cs: I II I' I I July 1, 1862.. Prior to 1857. Dec. 23, 1857. Dec. 17, 1860. Mar. 2, 1861.. Mar. 2, 1861.. Mar. 3, 1863.. Mar. 3, 1863.. July 17, 1861. July 17, 1861. June 30, 1864. Mar. 3 1865.. Mar. 3:1865.. Mar. 3,1863.. June 30,1864. Mar. 2, 1867.. Feb. 25,^62, etc Mar. 1, 1862.. .............. July 17, 1861. Feb. 25,1862. July 11, 1862. Mar. 3, 1863.. July 17, 1862. Mar. 3,1863.. 6 .... .... .6. 6 5 5 7.30 7..0 7.30 7.30 7.30 6 6 3 45 6 6 .... Oil. .... .... .... .... .... Jan. 15,'95. Demand... I year...... I year...... 2 years..... 60 days.... 2 years..... 60 days..... Aug. 18,'64. Sept. 30,'64 Aiig. 14,'67. June 14,'68. July 14,'68. 3 years..... 3 years..... Demand... 10 days.... 1 year...... ............ Demand.. ............ ............ ............ ........... ............ 104 104 2,203 18 9,9421 6 2,274{ 2,716 5,628; 3 .......... .......... .... 53,004 .... 69,832 .... 7..... .... 9..... .......... .... 3..... .... 9..... .......... .... 57,74 6 .... 49,881 20153 233313 .... 53,040 .... 96),6>20 ......... ......... *.. 1..... ......... .... 14966C 88409~ 514211 1, 258 104, 8 0 5, 42338 ..... 968 671,610 15,000 178,'756 ..... 89,717 115,772 1115540 472 432,687 9,915 15,090 458166 ..... 2684663 6,042 104 ~8 0 3 14,762' 29,0891 104 1041 2 2 () 01 33 13;A.,551 .......... I ....... 488,647 37,717 ,i.... ~...... 32.94 28,(;1 ..... 50,000 20,225, 13797 61 1 208 141 371,7831 356,000 5,497 4,881 22,809 27,745 400299 388768 19.207 17,678 _ 2 26.q282:1 2636320' 58,638 104 3 ..... 247 ..... ..... 1,1f; C,4,45'. 2 ...... ..... 2g4 ..... ..... G1 (;4,623 !801 1 ..... { 3 47 ..... ..... 1!)6 64,623 90 ..... 3 ..... ..... 83 ..... 104 18 ..... 104 8 0 164 ..... 108,951 44,520 109356 ....f 15,000 ..... ..... 72,330 1;0, 729 511165 780 431178 15,167 7,727 454854 ..... 1740690 9 4 4 4 [ 1 776 ..... ..... ..... 52,981 86,989 ..... ..... ..... ..... 102,384 156,784 400034 3,351 147,767 150,000 89,879 20,192 ..... 411190 ..... 1098793 3,454 6i49 806,251 ~ to w 0o he, H m 159,012 ..... 120,176 26,'391 1116050 272 400,619 7,030 20,040 427963 10,713 27840738 2,871 52,120 186 12 11535'2 123 356,000 4,605 27,508 388238 30,489 2642508 2,152 45,545 181 5 113345 106 356,000 39878 395984 34,547 2652246 ..... 328 5 ..... 5 659 66 369,772 34,446 404285 ..... 2104180 ...... 5 7i07 70 375,771 42,129 417971 ..... 2126211 .............. i'dar. 3,1864.. .............. .... .... .... ............ ............ ............ HAND-BOOK OF FINANCE. The following statement of the outstanding principal of the public debt on the 1st of January each year, from 1791 to 1876 inclusive, is taken from the annual report of the Secretary of the Treasury (B. IH. Bristow) for the fiscal year ending June 30, 1875, the amount for June 30, 1876, being added from the official monthly debt statement: Year. Amount. 1828........... $67,475,043 87 1829........... 58,421,413 67 1830........... 48,565,406 50 1831........... 39,123,191 68 1832........... 24,322,235 18 1833........... 7,001,698 88 1834........... 4,760,082 03 1835........... 37,513 05 1836........... 336,957 83 1837........... 3,308,124 07 1838........... 10,434,221 14 1839........... 3,573,343 82 1840........... 5,250,875 54 1841........... 13,594,480 73 1842........... 20,601,226 28 1843........... 32,742,922 00 1844........... 23,461,652 50 1845........... 15,925,303 01 1846........... 15,550,202 97 1 1847........... 38,826,534 77 8 1848........... 47,044,862 23 1849........... 63,061,858 69 1850........... 63,452,773 55 1851........... 68,304,796 02 1852........... 66,19a,341 71 1853........... 59,803,117 70 1854........... 42,242,222 42 1855........... 35,586,956 56 1856.............31,972,537 90 1857.......... 28,699,831 85 1858........... 44,911,881 03 1859........... 58,496,837 88 1860........... 64,842,287 88 1861........... 90,580,873 72 1862........... 524,176,412 13 18 63........... 1,119,772,138 63 1864.......... 1,815,784,370 57 154 Year. 1791............ 1792............ 1793............ 1794............ 1795............ 1796............ 1797............ 1798............ 1799............ 1800............ 1801............ 1802............ 1803............ 1804............ 1805............ 1806............ 1807............ 1808............ 1809............ 1810............ 1811............ 1812............ 1813............ 1814............ 1815........... 1816............ 1817............ 1818............ 1819............ 1820............ 1821............ 1822............ 1823............ 1824............ 1825............ 1826............ 1827............. Amount. $7.,463.476 52 77,227,924 66 80,352,634 04 78,427,404 77 80,747,587 39 83,762,172 07 82,064,479 33 79,228,529 12 78,408,669 77 82,976,294 35 83,038,050 80 80,712,632 25 77,054,686 30 86,427,120 88 82,312,150 50 75,723,270 66 69,218,398 64 65,196,317 97 57,023,192 09 53,173,217 52 48,005,587 76 45,209,737 90 55,962,827 57 81,487,846 24 99,833,660 15 127,334,933 74 123,491,965 16 103,466,633 83 95,529,648 28 91,015,566 15 89,987,427 66 93,546,676 98 90,875,877 28 90,269,777 77 83,788,432 71 81,054,059 99 73,987,357 20 PUBLIC DEBT OF THE U. S. Year. Amount. 1871.......... 2,353,211,332 32 1872.......... 2,253,251,328 78 1873......... *2,234,482,993 20 1874........... 12,251,690,468 43 1875.......... * 2,232,284.531 95 1876, June 30..*2,180,325,037 00 The total debt, including all outstanding obligations of the government, reached its maximum in 1866, when it aggregated $2,773,236,173. But the total interestbearing portion of the debt aggregated at the same time only $2,339,954,150. The reduction in the total annual interest since the aggregate of interest-bearing and non-interest-bearing debt reached its maximum has been as follows, viz.: Principal. Interest. 1867, June 3 0..................... $2,678,126,603 $143,781,592 1868, "..................... 2,611,687,851 140,404,045 1869,.."..................... 2,588,452,213 130,694,242 1870, ".................... 2,481,672,427 129,235,498 1871, "..................... 2,353,411,032 125,576,565 1872, "..................... 2,253,251,328 117,357,839 1873, "...................... 2,234,482,993 104,750,628 1874, "..................... 2,251,690,468 98,799,144 1875, "..................... 2,232,284,531 98,002,161 1876, "..................... 2,178,700,111 95,104,269 * In the amount here stated as the outstanding principal of the public debt are included the certificates of deposit outstanding on the 30th of June, issued under act of June 8, 1872, amounting to $31,730,000 in 1873, $58,760,000 in 1874, and $58,415,000 in 1875, for which a like amount in United States notes was on special deposit in the treasury for their redemption, and added to the cash balance in the treasury. These certificates, as a matter of accounts, are treated as a part of the public debt, but being offset by notes held on deposit for their redemption, should properly be deducted from the principal of the public debt in making comparison with former years. 155 Year. 1865.......... 1866.......... 1867.......... 1868.......... 1869.......... 1870.......... Amount. 2,680,647,869 74 2,773,236,173 69 2,678,126,103 87 2,611,687,851 19 2,588,452,213 94 2,480,672,427 81 e FOREIGN INDEBTEDNESS OF THE UNITED STATES. N 1874 Dr. Edward Young, Chief of the National Bureau of Statistics, made an estimate of the amount of American national, state and corporate bonds held in Europe at the close of 1873, and arrived at the conclusion- that the amount then was, in round figures, twelve httuclred mill,on dollars. By a memioralndum sent to the writer of this in August of this year (1876), Dr. Young estimated the amount of the foreign indebtedness of the United States at $1,350,000,000. Dr. Young's method of arriving at the estimate of $1,200,000,000 of foreign indebtedness at the close of 1873 is somewhat elaborate, and open to some criticism, though it is perhaps as logical a method as any that can be devised for approxitmating to the actual amount, the most pertinent objection to his conclusions being that he has perhaps estimated the average prices at which American securities have sold in Europe higher than was actually obtained for them.* It is a tolerably well-estab * BALANCE OF TRADE.-It is necessary, in the outset, to consider the elements that enter into this computation. In the first place, we must ascertain the adverse balance of trade upon the actual specie values of imports and exports. As in the fiscal year 1862 the value of exports exceeded that of the imports, the period embraced in this investigation begins on the 1st July, 1862. (Here follows a table of the total imports and exports of merchandise and specie from July 1, 1862, to December 31, 1873, which has been incorporated in a table of the same items on page 159, for the longer period from June 30, 1843, to June 30, 1876. The period selected by Dr. Young shows an excess of merchandise imports over merchandise exports, exclusive of specie, amounting to $1,040.535,721. This adverse balance was reduced by the export of $681,946,067 of FOREIGN INDEBTEDNESS OF THE U. S. lished fact that while a great many American state, municipal and corporate bonds negotiated in London since 1865 have sold for about par, a great many more have sold for much less, and it is well known that of the vast amount of railroad bonds negotiated there since 1870 more than half of the aggregate amount did not net the corporations in the United States over 80 cents on the dollar after deducting all expenses. The amounts "called up" each month on subscriptions to foreign loans in London, as published in the Infvestors' Xanual, show that even since the crisis of 1873 the amount of American state, municipal, railroad and other corporate bonds in London has averaged at least $75,000,000 per specie in excess of the imports of specie to $358,589,654. Beginning with this net adverse balance of $358,589,654 for the eleven and a half years, he proceeds to take into the account the following elements that inlcrease it, viz.:) SMUGGLING AND UNDERVALUATION.-From a careful examination of the subject during the past four years, the undersigned considers an addition of 3 per cent to the total value of the imports for undervaluation and smuggling as an ample allowance. It must be borne in mind that neither bulky nor free goods are smuggled, and that merchandise paying specific duties will not be undervalued. What kind of goods will probably be smuggled? Precious stones, jewelry, watches, silks, fine laces, etc. An examination of the official returns of the port of New York, published by this Bureau, will show that the total value of free and dutiable merchandise which entered into consumption during the fiscal year ended June 30, 1873, was, in round numbers, $438,000,000, 3 per cent on which is $13,140.000. The following were the imports of goods most easily smuggled: Precious stones.......................................................$2,678,368 Jewelry and all manufactures of gold and silver....................... 1,030.510 Watches and watch movements and materials........................ 3,039,512 Silk dress goods.....................................................16.353,380 Total............................................................$23,101,770 which, with fine laces and embroideries, probably reached $26,600,000. The $13,000,000 above estimated is equal to 50 per cent of the value of such of these articles as paid duty. Is it believed that the undervaluations and smuggling of such articles as the above named amount to $13,000,000 annually? Perhaps, of precious stones, jewelry, watches, laces and embroideries it may reach $5,000,000, but cannot amount to $8,000,000 on silk goods. It seems evident, therefore, that an addition of 3 per cent to the value of imported merchandise is suficient to 157 HAND-BOOK OF FINANCE. annum; and if we set the aggregate of such bonds (exclusive of national bonds) negotiated in Europe since 1870 at $800,000,000 par value, it will probably be below the actual amount, and if the average net proceeds of these received by the American corporations be estimated at say 85 cents on the dollar, it would show $120,000,000 of debt created without any return. But assuming that Dr. Young's estimate of $1,200,000,000 at the close of 1873 was nearly correct, it would place the aggregate at the present time somewhere about $1,400,000,000. But if his estimate of 80 cents on the dollar for all bonds sold prior to 1874 be 10 per cent too high, as is thought by some, it would still make the cover the evasions of the revenue, such addition amounting in the period under review to $146,861,754. FREIGIITS.-The values of the imports of merchandise, as presented in the first table, being those at the ports of shipment, it will be proper to add thereto the amount of freights to the several ports of the United States. As a part is brought in American vessels, and as the freight so earned is an addition to the wealth of the country, it is only necessary to consider, as another element in the computation, the amount of freight received by foreign ship-owners. As inward freights on goods vary from 100 per cent on the value of salt and some other bulky articles to 2 or 3 per cent on dress goods, and less than one-half per cent on specie, it is difficult to estimate the average ad valorem rate. On merchandise the average is not much less than 8 per cent; but, as nearly all the specie and the greater part of the dress goods, jewelry, watches, etc., are brought by foreign steamships, which disburse a considerable amount for fuel and shipstores, it is believed that 6 per cent on the total value of imports is an estimate of approximate accuracy. As the imports in foreign vessels amounted to $3,531 374,280, the element of foreign freight will, therefore, cause an increment of $211,882,456. The exports of domestic products, as given in the trade reports, are the currency values at the several ports of shipment in the United States. To make these conform to a uniform standard, the values have been reduced to gold in the tables above presented. The total amount exported in American vessels during the period under consideration was of the value of $1,450,000,000 in gold, the freight on which, estimated at 6 per cent, amounted to $87,000,000, which sum must be deducted from the aggregate of freights carried by foreign vessels. The last item to be added to the estimate is the interest which has become due upon the debt while it has been accruing. To obtain this with approximate accuracy is the most difficult part of this investigation. The most careful 158 FOREIGN TRADE OF THE U. S. aggregate at present (August, 1876) about $1,500,000,000. Of this amount about one half is presumed to be government bonds. FOREIGN TRADE OF THE UNITED STATES FOR 24 YEARS. Total imports into the United States each year from 1843 to 1876 inclusive, as stated by the National Bureau of Statistics for each year ending June 30: Merchandise. $42,433,464 102,604,606 113,184,322 117,914,065 122,424,349 148,638,644 141.206,199 173,509,526 210,771,429 analysis which has been made, as a basis for an intelligent estimate, leads to the conclusion that the amount of interest is not less than $277,000,000 nor more than $290,000,000. Lest the undersigned should be charged with a desire to reduce the aggregate of our foreign debt below the actual amount, the larger sum will be used in the computation. We have now the following items: Adverse balance of trade for eleven and a half years.............. $358,589,654. Allowance for merchandise smuggled and undervalued............. 146,861,754 Freights on imports to foreign shipowners........................211,882,456 Interest............................................................ 290,000,000 $1,007,333,864 Less freights on exports to United States shipowners............. 87,000 000 Aggregate.................................................... $920,333,864 From the above statement it appears that the debt we owe to Europe, incurred since July 1, 1863, amounts to $920,000,000. But owing to the fact that during the former part of that period our credit abroad was not assured, our securities sold considerably below par. Owing to the wide range in pricefrom 40 cents on the dollar at one time, to par at a more recent period -there I I 159 Year. Specie. $22,320,335 5,830,429 4,070,242 3,777,732 24,121,289 6.360,284 61651,240 4,628,792 5,453,503 Total Imports. $64,753,799 108,435,035 117,254,564 121,691,797 146,545,638 154,998,928 147,857,439 178,138,318 216,224,932 1843.................... 1844.................... 1845.................... 1846.................... 1847.................... 1848.................... 1849.................... 1850.................... 1851.................... HAND-BOOK OF FINANCE. Year. Merchandise. 1852....................$207,440,398 1853.................... 263,777,265 1854.................... I297,623,039 1855.................... 257,808,708 1856.................... 310,432,310 1857................... 348,428,342 1858................... 263,338,654 1859................... 331,333,341 1860.................... 353,616,119 1861.................... 289,310,542 1862.................... 189,356,677 1863.................... 243,335,815 1864.................... 316,447,283 1865.................... 238,745,580 1866.................... 434,812,066 1867.................... 395,763,100 1868.................... 357,436,440 1869.................... 417,506,379 1870.................... 435,958,408 1871.................... 520,223,684 1872.................... 626,595,077 1873.................... 642,136,210 1874.................... 567,406,342 1875.................... 535,005,336 1876.................... 460,713,761 is great difficulty in ascertaining the average rate of discount. But a careful estimate establishes the fact that the average discount for the whole period (eleven and a half years) under consideration was less than 20 per cent. In computing the aggregate of this debt, the par value of these securities must be ascertained, and as they sold at an average rate of at least 80 cents on the dollar, it follows that our debt to foreign nations, incurred in the past dozen years, amounts to about $1,150,000,000. Although there were no national securities held abroad at the commencement of our late war, yet some of the bonds of the Commonwealth of Pennsylvania, and probably of Massachusetts and other States, as well as railroad shares and securities, were owned in Europe. In the absence of accurate data on the subject, it is believed that fifty millions is an ample estimate for these ante bellum securities. With this addition, our aggregate foreign debt amounts to nearly TWELVE HUNDRED MILLION DOLLARS! [It will be borne in mind that the foregoing is an unofficial estimate of the amount of the United States securities - national, state, municipal and corporation - held in foreign countries. The figures in the tables have, however, been taken from the records of the bureau. and are, therefore, trustworthy.] EDWARD YOUNG. —,onthly Report of the Bureau of Statistics for February, 1874. I 160 Specie. |Total Imports. $5,505,044 $212,945,442 4,201,382 267,978,647 6,939,342 304,562,381 3,659,812 261,468,520 4,207,632 314,639,942 12,461,799 360,890,141 19,274,496 282,613,150 7,434,789 338,768,130 8,550,135 362,166,254 46,339,611 335,650,153 16,415,052 205,771,729 9,584,105 2.52,919,920 13,115,612 329,562,895 9,810,072 248,555,652 10,700,092 445,512,158 22,070,475 417,833,575 14,188,368 371,624,808 19,807,876 437,314,255 26,419,179 462,377,587 21,270,024 541,493,708 13,743,689 640,338,766 21,480,937 663,617,147 28,454,906 595,861,248 18,900,717 553,906,153 15,935,453 476,649,214 FOREIGN TRADE OF THE U. S. TOTAL EXPORTS (SPECIE VALUES). Merchandise. Specie and Bullion. Total Exports. 1843.................... 1844.................... 1845.................... 1846.................... 1847.................... 1848.................... 1849.................... 1850.................... 1851.................... 1852.................... 1853.................... 1854.................... 1855.................... 1856.................... 1857.................... 1858.................... 1859.................... 1860.................... 1861.................... 1862.................... 1863.................... 1864.................... 1865.................... 1866.................... 1867.................... 1868.................... 1869.................... 1870.................... 1871.................... 1872.................... 1873.................... 1874.................... 1875.................... 1876.................... I 161 Year. 84,346,474 111,200,046 114,646,606 113,488,516 158,648,622 154,032,131 145,755,820 151,898,720 218,388,011 209,658,366 230,976,157 273,898,000 275,156,846 326,964,908 362,960,682 324,644,421 356,789,462 400,122,292 249,344,913 227,558,141 268,121,058 264,234,529 233,672,529 434,903,593 353,229,597 375,737,004 343,256,077 450,927,434 541,262,166 524,055,120 607,088,496 706,556,612 653,224,672 596,844,995 .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... 203,964,447 158,837,988 166,029,303 348,859,522 292,361,225 281,952,899 286,117,697 392,771,768 442,820,178 444,177,586 522,479,922 646,856,926 579,367,543 540,338,693 .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... .......... 64,156,611 105,396,541 67,643,226 86,044,071 60,868,372 93,784,105 57,138,380 58,155,666 98,441,988 79,877,534 84,608,574 59,699 686 73,857:129 56,506,302 7* HAND-BOOK OF FINANCE. The following figures show the debtor balances against and the creditor balances in favor of the United States each year for twenty-four years: Creditor Balance. ................ ~~~~~~$19,590,675 ..................2,765,011 *.................... .*......................... ................ 12,102,984 .......................... .......................... .............................................. .................. 2,163,079 .......................... ..........................13,688,326 ................ 12,324,966 ..................2,070,541 ................ 42,031,271 ................ 18,021,332 .............................37,955,938 .......................... .................. 21,786,412 ................ 15,201,138 ................................16 8............ 16........ .......................... .......................... ................ 4,112,196 ......,,.........o ..........................1,9 .........................................t .........................108,695,364 ................ 99,318,519 ................ 120,195,781 Debtor Balance. ........................ ...................... $2,607,958............... 8,203,281............... ........................ 966,797............... 2,101,619............... 26,239,598............... 370240.............. o..... 3,287,076............... 37,002,490............... 80,664,381................. ooo..... —............... ........................ ~.o *....o@ oo*o-,... **.. .......................-. ........................ 86,305,240............... o...................,oo.......... 65,328,366............... 14,883,123............... 10,608,565............... 64,603,978............... 94,058,178............... 11,450,153............... 231,542............... 116,283,646............... 56,528,651............... ........................ ........................ ...- -.................. 162 1843 1844 1845 1846 1847 1848 1849 1850 1851 1852 1853 1854 1855 1856 1857 1858 1859 1860 1861 1862 1863 1864 1865 1866 1867 1868 1869 1870 1871 1872 1873 1874 1875 1876 TABLE I.-ANNUAL REVENUE AND EXPENDITURES OF THE UNITED STATES. Receipts of the Government from July 1, 1865, to Jtuly 1, 1876, inclusive -Net Revenue by Fiscal Years. Internal Sales of Premiu revenue. Direct tax. public lands. loans reveu. p sales of 309,226,813 42 $1,974,754 12 $665,031 03 $38,083,0 266,027.537 43 4,200,233 70 1,163.575 76 27,787.3 191,087,589 41 1,788,145 85 1,348,715 41 29.203,6 158,356,460 86 765,685 61 4,020,544 34 13,755,4 184,899,756 49 229,1(02 88 3,350,481 76 15,295,6 143.098,153 6.3 580,355 37 2,388,646 68 8,892.8 130,fi42,177 72........ 2,575,714 19 9,412,6 113,729,314 14 315,254 51 2,882,312 38 11,560,5 102,409.784 90)........ 1,852,428 93 5,037,6 110,007,493 58........ 1,413.640 17 3,979,2 116,700,732 03 93,798 80 1,129,466 95 4,029, ,826,185,813 61 9,947,330 84 22,790,357 60 167,037,3 Expenditures of the Governmeazt f(or the same period. Year. 1866................................ 1867................................ 1868................................ 1869................................ 1870................................ 1871................................ 1872................................ 1873................................ 1874............................... 1875................................ 1876................................ Total........................ Civil service. $41,056,961 51,110,027 60,011,018 56.471,061 69,234,017 69.498.710 60,984,757 73,328,109 69,641.593 69,100,884 ............ ............ w p,. Total.......................3,599,469,985............................................................I * Amount appropriated. I 1, m on and gold. D55 68 330 35 i29 50 191 12 643 76 B39 95 637 65 50 89 i65 22 279 69 80 B8 38439 Miscellaneous items. $29,036,314 23 15,037,522 15 17,745,403 59 13,997,338 65 12,942,118 30 22,093.541 21 15,106,051 23 17,161,270 05 17,075,042 73 15,431,915 31 17,456,776 19 193,083,293 64 Year. Customs. $179,046,651 58 176,417.810 88 164,464,599 56 180,048,426 63 194.538,374 44 206,270,408 05 216,370,286 77 188089,522 70 163,103,833 69 157.167.722 35 148,071,984 61 1,973,589,621 26 Net revenue. $558,032,620 06 490 634,010 27 405,638,083 32 370,943,747 21 411,255,477 63 38.,323,944 89 374,106,867 56 333 738,204 67 289.478,755 47 288,000,051 10 287,482,039 16 4,192,633,801 34 1866................ 1867................ 1868................ 1869................ 1870................ 1871................ 1872................ 1873................ 1874................ 1875................ 1876................ Total expended. 20.750,940 346,729,124 377,340,284 321,490,597 309,653,560 292,177,188 270,559,695 290.345,245 302.633,873 274,623,392 *293,166,177 3,599,469,985 For interest on debts. $1.3,067,741 131,034,011 140.424,045 130,964.242 129,235,498 125,576 565 117.357,839 109.856,607 107,119.815 103,093,544 .......... ............ Pensions and Indians. $18,852,416 25,579,083 27,883,069 35,519,544 31,748.140 34,443,894 35,595,130 87.311.1~O0 35,730,873 38,840,875 ............ ............ War. $284,449,701 95,224,415 123,246,648 78,501,990 57,655,675 35,799.991 35,372,157 46,323,158 42,313,927 41,120,645 ............ ............ Navy. $43,324,118 43,781,591 ~ 25,775,502 20,000,757 H 21,780,229 9 19,431.027 t 21,249,809 23 526,256 ( 30,932,587 21,497,(626? ........... I............ (O * Amount apl opriated. I p MONETARY LAWS OF TE UNITED STATES. Revision of all Laws in 1873; Coinage Laws; Lazws Authoriziig United States Notes and Bonds; Laws for National Banks and Bank Currency. AND REFERENCE TABLES: Tables of Prices for 54 years; Tables of Values of Coins and Monetary Units of all Nations; Table of the Average Annual Price of Gold from 1862 to 1876; Table of the Value of United States Notes wJith Gold at any Price. REVISION OF ALL THE PERMANENT LAWS OF THE UNITED STATES IN 1873. Y an act of Congress, June 27, 1866, the President was authorized to appoint three commissioners, "three persons learned in the law," "to revise, simplify, arrange and consolidate all statutes of the United States, general and permanent in their nature." This act was "revived" by the act of Miay 4, 1870, under authority of which the President appointed the three commissionlers. This commission prosecuted its important work by striking out all that was obsolete and all that had been repealed down to December 1, 1873, and then brought the parts of the various laws relating to the same subjects together under their respective new titles. This work was presented to the forty-second Congress, and adopted by act of June 20, 1874, which repealed all general laws in existence prior to December 1, 1873, as follows, viz.: (SEc. 5596 ) All acts of Congress passed prior to said 1st day of December, 1873, any portion of which is embraced in any section of said revision, are hereby repealed, and the section applicable thereto shall be in force in lieu thereof; all parts of such acts not contained in such revision having been repealed or suspended by subsequent acts, or not being general or permanent in their nature; provided, that the incorporation into said revision of any general and permanent provision, taken from an act making appropriations, or from an act containing other provisions of a private, local, or HAND-BOOK OF FINANCE. temporary character, shall not repeal or in any way affect any appropriation, or any provision of a private, local, or temporary character, contained in any of said acts, but the same shall remain in force; and all acts of Congress passed prior to said last named day, no part of which are embraced in said revision, shall not be affected or changed by its enactment. The repeal above referred to, it will be seen, related back to December 1, 1873. But in the interim to the date of adoption many important amendments had been made to the laws that were revised. Thus the "National Currency Act," or "National Bank Act," was amended by act of June 20, 1874, abolishing the reserve to be held against circulation. This amendment was itself partly repealed by the specie resumption act of January 14, 1875. None of this legislation appears in the Revised Statutes, and these changes only appear in .the Statutes at Large in the form of amendments to a law that does not exist in its original form and arrangement of sections. Unlike the laws in regard to the coinage and in regard to the issue and redemption of United States notes and bonds, there are no questions of general importance in connection with the history of the legislation in regard to the national banks and to national bank currency. THE PLAN OF COMPILATION pursued in the following pages has, therefore, been to divide the monetary laws under three heads, viz.: Coinage, United States Notes and Bonds, and National Banks and Bank Currency,- each of these three divisions being compiled with a different view. Under the 168 REVISION OF LAWS OF THIE U. S. head of Coinage are given only such clauses of the laws as relate to the weight, fineness and legal tender value of United States and foreign coins. Under the head of United States Notes and Bonds are given only such clauses as relate to the character of the obligation on the part of the government as a borrower, and the kind of payment provided for in the redemption of such obligations; all minor points not having any important bearing on these are omitted. But under the head of National Banks and Bank Currency are given all the laws now in force regarding the organization and management of National Banks and the issue and redemption of National Bank Currency. The object, therefore, in the compilation of laws under the last mentioned head has been to embody in their proper places in the Revised Statutes all the amendments passed in the interim between December 1, 1873, and June 20, 1874, and to strike out all that was repealed in the same time, thus making the compilation of laws under the head of National Banks and Bank Currency the same as if the revision of laws had been continued to June 20, 1874, instead of terminating at December 1, 1873. 8 169 COINAGE. r IHE following includes all the clauses of all the laws _ of the United States (and the previous Confederation of States) from 1781 to 1876, as they relate to the Weight, Fineness and Legal-Tender VFalue of United States and Foreign Coins. This summary is intended as historic of the policy of the government in regard to gold and silver coins and the relative values of the two metals: Articles of Confederation between the States, adopted March 1, 1781. ~ 1. The United States min Congress assembled shall also have the sole and exclusive right and power of regulating the alloy and value of coin struck by their own authority or by that of the respective States, fixing the standard of weights and measures throughout the United States. [By act of the Congress of the Confederation passed August 8, 1786, and by the ordinance of October 16, 1786, a silver dollar, containing 375.64 grains of pure silver, was established as the "unit of account," though the Confederation had not established any mint and no such coins as were specified by the act were coined anywhere. The dollar thus established was intended to be the equivalent of 4s. 6d. sterling, but fell short of it by about two per cent.] The Constitution, adopted Septemnber 17, 1787. The Congress shall have power - ~ 2. To borrow money on the credit of the United States. ~ 3. To coin money, regulate the value thereof, and of foreign coin, and fix the standard of weights and measures. No State shall coin money; emit bills of credit; make anything but gold and silver coin a tender in payment of debts; pass any ex post facto law, or law impairing the obligation of contracts, COINAGE. ACTS OF CONGRESS. Act April 2, 1792. That the money of account of the United States shall be expressed in dollars or units, dimes or tenths, cents or hundredths, and mills or thousandths, a dime being the tenth part of a dollar, a cent the hundredth part of a dollar, a mill the thousandth part of a dollar, and that all accounts in the public offices and all proceedings in the courts of the United States shall be kept and had in conformity to this regulation. ~ 4. That a mint for the purpose of a national coinage be and the same is established; to be situate and carried on at the seat of government of the United States for the time being. ~ 5. There shall be, from time to time, struck and coined at the said mint, coins of gold, silver and copper, of the following denominations, values and descriptions, viz.: Eagles - each to be of the value of ten dollars or units, and to contain 247A grains of pure or 270 grains of standard gold. Half eagles -each to be of the value of five dollars or units, and to contain 123" grains of pure or 135 grains of standard gold. Quarter eagles - each to be of the value of two dollars and a half dollar, and to contain 611 grains of pure or 67- grains of standard gold. Dollars or units -each to be of the value of a Spanish milled dollar, as the same is now current, and to contain 371T4 grains of pure or 416 grains of standard silver. Half dollars- each to be of half the value of the dollar or unit, and to contain 1851:0 grains of pure or 208 grains of standard silver. Quarter dollars -each to be of one fourth the value of the dollar or unit, and to contain 921- grains of pure or 104 grains of standard silver. Dismes -each to be of one tenth the value of a dollar or unit, and to contain 37,2 grains of pure or 41b- grains of standard silver. Half dismes -each to be of the value of one twentieth of a dollar, and to contain 18 grains of pure or 20-5 grains.of standard silver. Cents - each to be of the value of one hundredth part of a dollar, and to contain 11 pennyweights of copper. Half cents- each to be of the value of half a cent, and to contain 51 pennyweights of copper. ~ 6. The proportional value of gold to silver in all coins which shall, by law, be current as money within the United States shall be as fifteen to one, according to quantity in weight of pure gold or pure silver: that is to say, every fifteen pounds weight of pure silver shall be of equal value in all payments with one pound weight of pure 171 HAND-BOOK OF FiNANCE. gold, and so in proportion as to greater or less quantities of the respective metals. Act February 9, 1793. ~ 7. At the expiration of three years next ensuing from the time when the coinage of gold and silver, agreeably to the act entitled "An act establishing a mint and regulating the coins of the United States," shall commence at the mint of the United States (which shall be announced by proclamation of the President of the United States), all foreign gold coins and all foreign silver coins, except Spanish milled dollars and parts of such dollars, shall cease to be legal tender as aforesaid. (See ~ 13.) ~ 8. All foreign gold and silver coins, except Spanish milled dollars and parts of such dollars, which shall be received in payment for moneys due to the United States after the said time when the coining of gold and silver coins shall begin at the mint of the United States, shall, previously to their being issued in circulation, be coined anew, in conformity to the act entitled "An act establishing a mint and regulating the coins of the United States." (See ~ 19.) Act March 2, 1799. ~ 9. All foreign coins and currencies shall be estimated at the following rates, viz.: each pound sterling of Great Britain at four dollars and forty-four cents ($4.44); each livre tournois of France at eighteen and a half cents (182); each florin or guilder of the Union Netherlands at forty cents (49); each wark-banco of Hamburg at thirty-three and one-third cents (33i); each rix dollar of Denmark at one hundred (100) cents; each real of plate and each rial of vellon of Spain, the former at ten cents and the latter at five cents each; each miilree of Portugal at one dollar and twenty-four cents; each pound sterling of Ireland at four dollars and ten cents; each tale of China at one dollar and forty-eight cents; each pagoda of India at one dollar and ninety-four cents; each rupee of Bengal at fifty-five and one-half cents; and all other denominations of money, as nearly as may be to the said rates or the intrinsic value thereof, compared with money of the United States. ~ 10. All duties and fees to be collected shall be payable in money of the United States, or in foreign gold and silver coins at the following rates, that is to say: the gold coins of Great Britain and Portugal of the standard prior to the year 1792 at the rate of one hundred cents for every twenty-seven grains of the actual weight .-': *: * *: 172 COINAGE. thereof; the gold coins of France, Spain and the dominions of Spain, of the standard prior to the year 1792, at thi rate of one hundred cents for every twenty-seven grains and two-fifths of a grain of tihe actual weight thereof; Spanish milled dollars at the rate of one hunc(hred cents for each dollar, the actual weight whereof shall not be less than seventeen (17) pennyweights and seven (7) grains-and in proportion for the parts of a dollar; crowns of France at the rate of one hundred and ten cents for each crown, the actual weight whereof shall not be less than eighteen (18) pennyweights and seventeen (17) grains, and in proportion for the parts of a crown. Protide(d, that no foreign coins shall be receivable which are not by law a legal tender for the payment of all debts -except in consequence of a proclamation of the President of the United States authorizing such foreign coins to be received in payment of duties and fees as aforesaid. Act MLarch 3, 1801. ~ 11. The foreign coins and currencies hereinafter mentioned shall be estimated in the computation of duties at the following rates: each sicca rupee of Bengal and each rupee of Bombay at fifty cents, and each star pagoda of Madras at one hundred and eightyfour cents. Act April 10, 1806. ~ 12. Foreign gold and silver coins shall pass current as money within the United States, and be a legal tender for the payment of all debts and demands at the several and respective rates following, and not otherwise, viz.: The gold coins of Great Britain and Portugal of their present standard at the rate of one hundred cents for every twenty-seven grains of the standard weight thereof; the gold coins of France, Spain and the dominions of Spain, of their present standard, at the rate of one hundred cents for every twenty-seven grains and two-fifths of a grain of the actual weight thereof. Spanish milled dollars at the rate of one hundred cents for each, the actual weight whereof shall not be less than seventeen (17) pennyweights and seven (7) grains, and in proportion for the parts of a dollar. Crowns of France at the rate of one hundred and ten cents for each crown, the actual weight whereof shall not be less than eighteen (18) pennyweights and seventeen (17) grains, and in proportion for the parts of a crown. And it shall be the duty of the Secretary of the Treasury to cause assays of the foreign gold and silver coins of the 173 HAND-BOOK OF FINANCE. description made current by this act, and which shall issue subsequently to the passage of this act, and shall circulate in the United States-at the mint aforesaid, at least once in every year, and to make report of the result thereof to Congress, for the purpose of enabling Congress to make such coins current- if they shall deem the same to be proper- at their real standard value. ~ 13. That the first section of the act entitled "An act regulating foreign coins and for other purposes," passed the 9th day of February, 1793, be and the same is hereby repealed, and the operation of the second section of the same act is hereby suspended for and during the space of three years from the passage of this act. (See ~ 7-8.) Act AI{trch 3, 189.. ~ 14. T'he following gold coins shall be received in all payments on account of public lands at the several and respective rates following and not otherwise, viz.: the gold coins of Great Britain and Portugal of their present standard, at the rate of one hundred cents for every twenty-seven grainls, or eighty-eighlt cents and eight-ninths (88w) per pennyweight; the gold coins of France, of their present standard, at the rate of one hundred cents for every twenty-seven and one-half grains or eighty-seven and a quarter (8714) cents per pennyweight, and the gold coins of Spain, of their present standard, at the rate of one hundred cents for every twenty-eight and a half grains, or eighty-four cents per pennyweight. ~ 15. It shall be the duty of the secretary of the treasury to cause assays of the foregoing coins to be made at the mint of the United States at least once in every year, and make report of the result thereof to Congress. Act Julie 25, 1834. ~ 16. The following silver coins shall be of the legal value, and shall pass current as money within the United States, by tale for the payment of all debts and demands at the rate of one hundred cents the dollar, that is to say, the dollars of Mexico, Peru, Chili and Central America, of not less weight than four hundred and fifteen grains each, and those re-stamped in Brazil of the like weight, of not less fineness than ten ounces fifteen pennyweights of pure silver in the troy pound of twelve ounces of standard silver; and the fivefranc pieces of France, when of not less fineness than ten (10) ounces and sixteen (16) pennyweights in twelve ounces troy weight of 174 COINAGE. standard silver, and weighing not less than three hundred and eighty-four grains each- at the rate of ninety-three (93) cents each. ~ 17. The following gold coins shall pass current as money in the United States, and be receivable in all payments by weight for the payment of all debts and demands at the rates following, that is t6 say: the gold coins of Great Britain, Portugal and Brazil, of not less than twenty-two (22) carats fine, at the rate of ninety-four cents and eight-tenths of a cent (94x) per pennyweight; the gold coins of France, nine-tenths fine, at the rate of ninety-three cents and onetenth of a cent (93{) per pennyweight, and the gold coins of Spain, Mexico and Columbia, of the fineness of twenty (20) carats, three grains and seven-sixteenths (3T7) of a grain, at the rate of eightynine cents and nine-tenths of a cent (89T9) per pennyweight. Act January 18, 1837. ~ 18. The standard for both gold and silver coins of the United States shall hereafter be such that of one thousand parts by weight nine hundred shall be of pure metal and one hundred of alloy, and the alloy of silver coins shall be of copper, and the alloy of the gold coins shall be of copper and silver, provided that the silver do not exceed one-half the alloy. ~ 19. Of the silver coins, the Dollar shall be of the weight of 4122 grains; the Half Dollar of the weight of 206y4 grains; the Quarter Dollar of the weight of 103/ grains; the Dinte, or tenth part of a dollar, of the weight of 41w4 grains, and the Half Dime, or twentieth part of a dollar, of the weight of 208 grains. ~ 20. And that Dollars, Half Dollars, Quarter Dollars, Dimes and Half Dimes shall be legal tenders of payment according to their nominal value for any sums whatever. ~ 21. Of the gold coins, the weight of the Eagle shall be 258 grains; that of the Half Ectagle 129 grains, and of the Quarter Eagle 64/ grains. ~ 22. And that for all sums whatever the Eagle shall be a legal tender of payment for ten dollars, the Half Eagle for five dollars, and the Quarter Eagle for two and a half dollars. Act July 27, 1842. ~ 23. In all payments by or to the treasury, whether made here or in foreign countries where it becomes necessary to compute the value of the pound sterling, it shall be deemed equal to four dollars and eighty-four cents ($4.84). 175 HAND-BOOK OF FINANCE. Act March 3, 1843. ~ 24. The following gold coins shall pass current as money in the United States and be receivable by weight for the payment of all debts and demands at the rates following, that is to say: the gold coins of Great Britain, of not less than nine hundred and fifteen and a half thousandths (9152-1,000) in fineness, at ninety-four cents and six-tenths (94-6) of a cent per pennyweight, and the gold coins of France, of not less than eight hundred and ninety-nine thousandths (T89~) in fineness, at ninety-two cents and nine-tenths of a cent (92-9) per pennyweight. The following foreign silver coins shall pass current as money within the United States and be receivable by tale for the payment of all debts and demands at the rates following, that is to say: the Spanish pillar dollars, and the dollars of Mexico, Peru and Bolivia, of not less than eight hundred and ninety-seven thousandths (Tu9l;) in fineness and four hundred and fifteen (415) grains in weight, at one hundred cents each, and the five-franc pieces of France, of not less than nine hundred thousandths ( 9~00) in fineness and three hundred and eighty-four (384) grains in weight, at ninety-three (93) cents each. Act March 3, 1849. ~ 25. There shall be from time to time stlruck and coined at the mint of the United States and the branches thereof-conformably in all respects to law, and conformably in all respects to the standard for gold coins now established by law -coins of gold of the following denominations and value, viz.: Double Eagles, each to be of the value of twenty dollars or units, and Gold( Dollars, each to be of the value of one dollar, or unit. ~ 26. For all sums whatever the Double Eagle shall be a legal tender for twenty dollars, and the Gold Dollar shall be a legal tender for one dollar. ~ "7. In adjusting the weights of gold coins henceforward the following deviations from the standard weight shall not be exceeded in any of the single pieces, namely: in the double eagles, the eagle and the half eagle, one half of a grain; and in the quarter eagle and gold dollar, one quarter of a grain; and that in weighing a large number of pieces together, when delivered from the chief coiner to the treasurer, and from the treasurer to the depositors, the deviation from the standard weight shall not exceed three pennyweights in one thousand double eagles; two pennyweights in one 176 COINAGE. thousand eagles; one and one-half pennyweights in one thousand half eagles; one pennyweight in one thousand quarter eagles, and one-half of a pennyweight in one thousand gold dollars. Act Miarch 3, 1851. ~ 28. It shall be lawful to coin at the mint of the United States and its branches a piece of the denomination and legal value of three cents, or three-hundredths of a dollar, to be composed of threefourths silver and one-fourth copper, and to weigh twelve (12) grains and three-eighths (X) of a grain; that it shall be a legal tender in payment of debts for all sums of thirty cents and under. Act February 21, 1853. ~ 29. That the weight of the Half Dollar, or piece of fifty cents, shall be one hundred and ninety-two (192) grains; and the Quarter Dollar, Dime and Half Dime shall be respectively one-half, one-fifth and one-tenth of the weight of the Half Dollar. ~ 30. The silver coins issued in conformity with the above section shall be legal tenders in payment of debts for all sums not exceeding five dollars. ~ 31. From time to time there shall be struck and coined at the mint of the United States and the branches thereof, conformably in all respects to the standard of gold coins now established by law, a coin of gold of the value of Three Dollars or Units. ~ 32. And that hereafter the Three Cent piece now authorized by law shall be made of the weight of three-fiftieths of the weight of the half dollar, as provided in said act, and of the same standard of fineness. And said act, entitled "An act amendatory of existing laws relative to the Half Dollar, Quarter Dollar, Dime and Half Dime," shall take effect and be in full force from and after the first day of April, 1853, anything to the contrary notwithstanding. Act Februtaryl 21, 1857. ~ 33. The standard weight of the Cent coined at the mint shall be seventy-two (72) grains, or three-twentieths of an ounce troy, with no greater deviation than four grains in each piece; and said Ceigt shall be composed of eighty-eight (88) per centumn of copper and twelve (12) per centumn of nickel. And the coinage of the Half Cent shall cease. 177 0 HAND-BOOK OF FINANCE. Act Febretuary 21, 18o7. ~ 34. The pieces commonly known as the quarter, eighth and sixteenth of the Spanish pillar dollar and of the Mexican dollar shall be receivable at the Treasury of the United States and its several offices, and at the several post offices and land offices, at the rates of valuation following, viz.: the fourth of a dollar, or piece of two reals, at twenty cents; the eighth of a dollar, or piece of one real, at ten cents; and the sixteenth of a dollar, or half real, at five cents. ~ 35. All former acts authorizing the currency of foreign gold or silver coins, and declaring the same a legal tender in payment of debts, are hereby repealed; but it shall be the duty of the director of the mint to cause assays to be made from time to time of such foreign coins as may be known to commerce, to determine their average weight, fineness and value, and to embrace in his annual report a statement of the results thereof. Act April 22, 1864. ~ 36. The standard weight of the cent coined at the mint of the United States shall be forty-eight grains, or one tenth of one ounce troy, and said cent shall be composed of ninety-five per centum of copper and five per centum of tin and zinc in such proportions as shall be determined by the director of the mint; and there shall be from time to time struck and coined at the mint a two-cent piece of the same composition, the standard weight of which shall be ninetysix grains, or one fifth of an ounce troy, with no greater deviation than four grains to each piece. ~ 37. The said coins shall be a legal tender in any payment, the one cent coin to the amount of ten cents, and the two cent coin to the amount of twenty cents; and it shall be lawful to pay out said coins in exchange for the lawful currency of the United States (except cents or half cents issued under former acts of Congress) in suitable sums, by the treasurer of the mint, and by such other depositaries as the secretary of the treasury may designate. Act March 3, 1865. ~ 38. There shall be coined at the mint of the United States a three cent piece composed of copper and nickel in such proportion - not exceeding twenty-five (25) per centum of nickel -as shall be determined by the director of the mint, the standard weight of which 178 COINAGE. shall be thirty grains, with no greater deviation than four grains to each piece. ~ 39. The said coin shall be a legal tender in any payment to the amount of sixty cents; and it shall be lawful to pay out said coins in exchange for the lawful currency of the United States (except cents or half cents or two cent pieces issued under former acts of Congress) in suitable sums, by the treasurer of the mint, and by such other depositaries as the secretary of the treasury may designate. Provided, that from and after the passage of this act no issues of fractional notes of the United States shall be of less denomination than five cents. ~ 40. The one and two cent coins of the United States shall not be a legal tender for any payment exceeding four cents in amount, (previous laws to the contrary repealed). Act MIay 16, 1866. ~ 41. There shall be coined at the mint of the United States a five cent piece, composed of copper and nickel in such proportionnot exceeding twenty-five per centum of nickel -as shall be determined by the director of the mint, the standard weight of which shall be seventy-seven and sixteen hundredths grains, with no greater deviation than two grains to each piece. ~ 42. Said coins shall be a legal tender in any payment to the amount of one dollar; and it shall be lawful to pay out said coins for lawful currency of the United States, in suitable sums, by the treasurer of the mint, and by such other depositaries as the secretary of the treasury may designate. ~ 43. That from and after the passage of this act no issues of fractional notes of the United States shall be of less denomination than ten cents. ~ 44. It shall be lawful for the treasurer and the several assistant treasurers of the United States to redeem in national currency, under such rules and regulations as may be prescribed by the secretary of the treasury, the coins herein authorized to be issued when presented in sums of not less than one hundred dollars. Act March 3, 1871. ~ 45. That the secretary of the treasury is required to redeem in lawful money all copper, bronze, copper-nickel and base-metal coinage of every kind hitherto authorized by law, when presented in sums of not less than twenty dollars. 179 HAND-BOOK OF FINANCE. ftct F'eberuary 12, 1873. ~ 46. That the gold coins of the United States shall be a One Dollar Piece, which, at the standard weight of twenty-five and eight-tenths (25Tf) grains, shall be the Unit of Valute; a Quarter Eagle, or two and a half dollar piece; a Three Dollar Piece; a Half Eagle, or five dollar piece; an Eagle, or ten dollar piece; and a Double Eagle, or twenty dollar piece. And the standard weight of the Gold Dollar shall be twenty-five and eight-tenths grains; of the Quarter Eagle sixty-four and one-half grains; of the Three Dollar Piece seventy-seven and four-tenths grains; of the Half Eagle one hundred and twenty-nine grains; of the Eagle two hundred and fifty-eight grains; of the Double Eagle five hundred and sixteen grains, which coins shall be a legal tender in all payments at their nominal value when not below the standard weight and limit of tolerance provided in this act, and that when reduced in weight below said standard and tolerance shall be a legal tender in proportion to their actual weight. Any gold coins of the United States, if reduced by natural abrasion not more than a half of one per cent below the standard weight after twenty years' circulation, and at a ratable proportion for allny less period, shall be received at their nominal value at the United States treasury. ~ 47. The silver coins of the United States shall be a Trade Dollar, a Half Dollar, a Quarter. Dollar, a Dime. And the weight of the Trade Dollar shall be four hundred and twenty (420) grains troy; the weight of the Half Dollar shall be twelve g-rams and one half of a grait; the Quarter Dollar and the Dime shall be respectively one half and one fifth the weight of said half dollar; and said coints shall be a legal tender at their nominal value for any amount not exceeding five dollars in one payment. ~ 48. The standard for both gold and silver coins of the United States shall be such that of one thousand parts by weight nine'hundred shall be of pure metal and one hundred of alloy. The alloy of the silver coins shall be of copper'. The alloy of the gold coins shall be of copper or of copper and silver, but the silver shall in no case exceed one tenth of the whole alloy. ~ 49. The minor coins of the United States shall be a Five Cent Piece, a Three Cent Piece and a One Cent Piece. The alloy for the five and three cent pieces shall be of copper and nickel, to be composed of three-fourths copper and one-fourth nickel. The alloy of the one cent piece shall be ninety-five per centum of copper and five 180 COINAGE. per centum of tin and zinc, in such proportions as shall be determined by the director of the mint. The weight of the five cent piece shall be seventy-seven and sixteen-hundredths grains troy; of the three cent piece thirty grains, and of the one cent piece forty-eight grains. ~ 50. No coins, either of gold, silver or minor coinage, shall hereafter be issued from the mint other than those of the denominations, standards and weights set forth in this title. ~ 51. Silver coins, other than the trade dollars, shall be paid out at the several mints and at the assay office in New York city in exchange for gold coins at par, in sums not less than one hundred dollars. ~ 52. Nothing herein contained shall, however, prevent the payment of silver coins at their nominal value for silver parted from gold, as provided in this title, or for change less than one dollar ill settlement of gold deposits. ~ 53. In adjusting the weights of the gold coins the followin,g deviations shall not be exceeded in any single piece: In the double eagle and the eagle, one half of a grain; in the half eagle, the three dollar piece, the quarter eagle and the one dollar piece, one fourth of a grain, and in weighing a number of pieces together, when delivered by the coiner to the superintendent and by the superintendent to the depositor, the deviation from the standard weight shall not exceed one hundredth of an ounce in five thousand dollars in double eagles, eagles, half eagles or quarter eagles, or in one thousand dollars in three dollar pieces or one dollar pieces. ~ 54. In adjusting the weight of the silver coins the following deviations shall not be exceeded in any single piece: In the dollcir, the half dollar, the quarter dollar and in the dime, one and one-half grains, and in weighing a large number of pieces the deviations shall not exceed two hundredths of an ounce in one thousand dollars, half dollars, or quarter dollars, and one hundredth of an ounce in one thousand dimes. ~ 55. In adjusting the weight of the minor coins provided by this title, there shall be no greater deviation allowed than three grains for the five cent piece, and two grains for the three and one cent pieces. ~ 56. That all other acts and parts of acts pertaining to the mints, assay offices and coinage of the United States, inconsistent with the provisions of this act, are hereby repealed: Provided, That this act shall not be construed to affect. any act done, right accrued, or pen alty incurred under former acts, but every such right is hereby saved. 181 HAND-BOOK OF FINANCE. Act March 3, 1873. ~ 57. The value of the sovereign, or pound sterling, shall be deemed equal to four dollars eighty-six cents and six and one-half mills; and all contracts made after the first day of January, 1874, based on an assumed par of exchange with Great Britain, of fifty-four pence to the dollar, or four dollars forty-four cents and four-ninths cents to the sovereign, or pound sterling, shall be null and void. Act March 3, 1875. ~ 58. That there shall be from time to time coined at the mints of the United States, conformably in all respects to the coinage act of 1873, a coin of silver of the denomination of twenty cents, and of the weight of five grams. That the twenty cent piece shall be a legal tender at its nominal value for any amount not exceeding five dollars in any one payment. That in adjusting the weight of the twenty cent piece, the deviation from the standard weight shall not exceed one and one-half grains. Act Jtl! 113, 1876. ~ 59. That the trade dollar shall not hereafter be a legal tender. (See Subsidiary Silver Coin Bill, page 201.) 182 UNITED STATES NOTES AND BONDS. N the preparation of the following digest of the laws of the United States relating to the issue and redemnption of United States notes and bonds, it was not deemed necessary to cite any legislation prior to 1861. The amount of national obligations assumed to be yet "outstanding" that were authorized by acts prior to 1861, is unimportant, and it is moreover believed that a large proportion of such notes and bonds has been destroyed and lost. As far as the public have any real interest in the laws relating to the national debt, it is confined exclusively to the war debt created since 1860 and to the Pacific Railroad debt created since 1862. None of the laws, except a few of the most important, such as the "Sinking Fund Act," the "Public Credit Act," the "Specie Resumption Act" and a few others, are given in full, as the details of printing, issuing, signing, and a multitude of other minor provisions, are not deemed pertinent to the greater questions of the contract between the government as a borrower and the note and bond holders as creditors, nor to the legal-tender character of notes intended to circulate as money. But the object in this division of the compilation of laws has been to give all the clauses in the acts of Congress which have any important bearing on the character and redemption of the obligations of the United States issued since 1860. HAND-BOOK OF FINANCE. Act June 22, 1860. [This act authorized the issue of $21,000,000 of 6 per cent bonds to be used in the redemption of outstanding treasury notes.] Act Deceniber 17, 1860. That the President of the United States be authorized to cause treasury notes to be issued for such sunis as the exigencies of the public service may require, but not to exceed at any time the amount of ten millions ($10,000,000). That such notes shall be redeemed after the expiration of one year. They shall bear interest, 6 per cent per annum. Ac t February 8, 1861. That the President of the United States be authorized to borrow, on the credit of the United States, a sum not exceeding twenty-five millions ($25,000,000). That stock shall be issued for the amount so borrowed, bearing interest not exceeding 6 per centum per annum, and to be reimbursed within a period not beyond twenty years and not less than ten years. A4ct MfaMch 2, 1861. That the President of the United States be, and hereby is, authorized, at any time within twelve months fromn the passage of this act, to borrow, on the credit of the United States, a sum not exceeding ten millions of dollars: Provided, That no stipulation or contract shall be made to prevent the United States from reimbursing any sum borrowed under the authority of this act at any time after the expiration of ten years from the 1st day of July next, by the United States giving three months' notice, to be published in some newspaper published at the seat of government, of their readiness to do so; and no contract shall be made to prevent the redemption of the same at any time after the expiration of twenty years from the said 1st day of July next, without notice. That stock shall be issued for the amount so borrowed, bearing interest not exceeding 6 per cent per annum. Act July 17, 1861. That the Secretary of the Treasury be authorized to borrow, on the credit of the United States, within twelve months, a sum not exceeding $250,000,000, for which he is authorized to issue coupon bonds or registered bonds or treasury notes in such proportion as he may 184 I UNITED STATES NOTES AND BONDS. deem advisable. The bonds to bear interest not exceeding seven per cent per annum, payable semi-annually, irredeemable for twenty years, and after that at the pleasure of the United States, and the treasury notes to be of denominations not less than $50, payable three years after date, with interest at the rate of seven and threetenths per cent per annum. And the Secretary may also issue, in exchange for coin, treasury notes of a less denomination than $50, not beallring interest but payable on demand at the assistant treasuries of the United States- or treasury notes bearing interest at the rate of 3.65 per cent per annum, payable in one year from date and exchangeable at any time for treasury notes (7-30s) for $50 and upward. That the Secretary is authorized, whenever he shall deem it expedient, to issue, in exchange for coin or in payment of public dues, treasury notes of any of the denominations hereinbefore specified, bearing interest not exceeding six per cent per annum, and payable at any time not exceeding twelve months from date; that the amount of notes so issued shall at no time exceed $20,000,000. Act Aiugist 5, 1861. That the Secretary of the Treasury is authorized to issue bonds of the United States, bearing interest at six per cent per annum, and payable at the pleasure of the United States after twenty years from date. If any holder of treasury notes bearing interest at the rate of seven and three-tenths per cent per annum desire to exchange the same for said bonds, the Secretary may, at any time before the maturity of said treasury notes, issue to said holder, in payment thereof, an amount of said bonds equal to the amount due on said treasury notes; nor shall the whole amount of such bonds exceed the whole amount of treasury notes bearing seven and three-tenths per cent interest issued under said act (of July 17, 1861). Act February 12, 1862. That the Secretary of the Treasury, in addition to the $50,000,000 of notes payable on demand of denominations not less than five dollars, authorized by the acts of July 17 and August 5, 1861, is authorized to issue like notes to the amount of $10,000,000 -said notes shall be deemed part of the loan of $250,000,000 authorized by said acts. 185 HAND-BOOK OF FINANCE. Act February 25, 1862. That the Secretary of the Treasury is hereby authorized to issue, on the credit of the United States, one hundred and fifty millions of dollars of United States notes, not bearing interest, payable to bearer, at the Treasury of the United States, and of such denominations as he may deem expedient, not less than five dollars each: Providled, howtvever, That fifty millions of said notes shall be in lieu of the demand treasury notes authorized to be issued by the act of July seventeen, eighteen hundred and sixty-one; which said demand notes shall be taken up as rapidly as practicable, and the notes herein provided for substituted for them: A,nd protided further, That the amount of the two kinds of notes together shall at no time exceed the sum of one hundred and fifty millions of dollars, and such notes herein authorized shall be receivable in payment of all taxes, internal duties, excises, debts and demands of every kind due to the United States, except duties on imports, and of all claims and demands against the United States of every kind whatsoever, except for interest upon bonds and notes, which shall be paid in coin, and shall also be lawful money and a legal tender in payment of all debts, public and private, within the United States, except duties on imports and interest as aforesaid. And any holders of said United States notes depositing any sum not less than fifty dollars, or some multiple of fifty dollars, with the Treasurer of the United States, or either of the assistant treasurers, shall receive in exchange therefor duplicate certificates of deposit, one of which may be transmitted to the Secretary of the Treasury, who shall thereupon issue to the holder an equal amount of bonds of the United States, coupon or registered, as may by said holder be desired, bearing interest at the rate of six per centum per annum, payable semi-annually, and redeemable at the pleasure of the United States after five years, and payable twenty years from the date thereof. And such United States notes shall be received the same as coin, at their par value, in payment for any loans that may be hereafter sold or negotiated by the Secretary of the Treasury, and may be re-issued from time to time as the exigencies of the public interest shall require. That to enable the Secretary to fund the floating debt of the United States he be authorized to issue, on the credit of the United States, bonds to an amount not exceeding $500,000,000, redeemable at the pleasure of the United States after five years, and payable twenty years after date, bearing interest at the rate of six per cent per annum. 186 IUNITED STATES NOTES AND BONDS. Sinking Fund Act, February 25, 1862. That all duties on imported goods shall be paid in coin, or in notes payable on demand, heretofore authorized to be issued and by law receivable in payment of public dues, and the coin so paid shall be set apart as a special fund and shall be applied as follows: First, To the payment in coin of the interest on the bonds and notes of the United States. Second, To the purchase or payment of one per centum of the entire debt of the United States to be made within each fiscal year after the first day of July, 1862, which is to be set apart as a sinking fund, and the interest of which shall in like manner be applied to the purchase or payment of the public debt as the Secretary of the Treasury shall from time to time direct. Thisd, The residue thereof to be paid into the Treasury. Act Aiarch7 17, 1862. That the Secretary may purchase coin with any of the bonds or notes of the United States authorized by law, at such rates and upon such terms as he may deem most advantageous to the public interest. (By Sec. 2 of this act, the demand notes authorized by the acts of July 17, 1861, and February 12, 1862, are declared lawful money and a legal tender, same as the treasury notes issued under act of February 25, 1862.) Pacific Railroad Bonds, Act July 1, 1862. SEC. 5. That for the purposes herein mentioned the Secretary of the Treasury shall, upon the certificate in writing of said commissioners of the completion and equipment of forty consecutive miles of said railroad and telegraph, in accordance with the provisions of this act, issue to said company bonds of the United States of one thousand dollars each, payable in thirty years after date, bearing six per centum per annum interest (said interest payable semi-annually), which interest may be paid in United States treasury notes or any other money or currency which the United States have or shall declare lawful money and a legal tender, to the amount of sixteen of said bonds per mile for such section of forty miles; and to secure the repayment to the United States, as hereinafter provided, of the amount of said bonds so issued and delivered to said company, together with all interest therein which shall have been paid by the United States, the issue of said bonds and delivery to the company shall ipso facto constitute a first mortgage on the whole line of the 187 }HAND-BOOK OF FINANCE. railroad and telegraph, together with the rolling stock, fixtures and property of every kind and description, and in consideration of which said bonds may be issued; and on the refusal or failure of said company to redeem said bonds, or any part of them, when required so to do by the Secretary of the Treasury, in accordance with the provisions of this act, the said road, with all the rights, functions, immunities and appurtenances thereunto belonging, and also all lands granted to the said company by the United States, which, at the time of said default, shall remain in the ownership of said company, may be taken possession of by the Secretary of the Treasury, for the use and benefit of the United States: Provided, this section shall not apply to that part of any road now constructed. SEc. 6. That the grants aforesaid are made upon condition that said company shall pay said bonds at maturity, and shall keep said railroad and telegraph line in repair and use, and shall at all times transmit dispatches over said telegraph line, and transport mails, troops and munitions of war, supplies and public stores upon said railroad for the government, whenever required to do so by any department thereof, and that the government shall at all times have the preference in the use of the same for all the purposes aforesaid (at fair and reasonable rates of compensation, not to exceed the amounts paid by private parties for the same kind of service); and all compensation for services rendered for the government shall be applied to the payment of said bonds and interest until the whole amount is fully paid. Said company may also pay the United States, wholly or in part, in the same or other bonds, treasury notes, or other evidences of debt against the United States, to be allowed at par; and after said road is completed, until said bonds and interest are paid, at least five per centumn of the net earnings of said road shall also be annually applied to the payment thereof. Act July 11, 1862. That the Secretary of the Treasury is hereby authorized to issue, in addition to the amounts heretofore authorized, on the credit of the United States, one hundred and fifty millions of dollars of United States notes, not bearing interest, payable to bearer at the Treasury of the United States, and of such denominations as he may deem expedient: Providedl, That no note shall be issued for the fractional part of a dollar, and not more than thirty-five millions shall be of lower denominations than five dollars; and such notes shall be receivable in payment of all loans made to the United States, and of Th 188 .1 UNITED STATES NOTES AND BONDS. all taxes, internal duties, excises, debts and demands of every kind due to the United States, except duties on imports and interest, and of all claims and demands against the United States, except for interest upon bonds, notes, and certificates of debt or deposit; and shall also be lawful money and a legal tender in payment of all debts, public and private, within the United States, except duties on imports and interest, as aforesaid. And any holder of said United States notes depositing any sum not less than fifty dollars, or some multiple of fifty dollars, with the Treasurer of the United States, or either of the assistant treasurers, shall receive in exchange therefor duplicate certificates of deposit, one of which may be transmitted to the Secretary of the Treasury, who shall thereupon issue to the holder an equal amount of bonds of the United States, coupon or registered, as may by said holder be desired, bearing interest at the rate of six per centum per annum, payable semi-annually, and redeemable at the pleasure of the United States after five years, and payable twenty years from the date thereof: Provided, however, That any notes issued under this act may be paid in coin, instead of being received in exchange for certificates of deposit as above specified, at the direction of the Secretary of the Treasury. And the Secretary of the Treasury may exchange for such notes, on such terms as he shall think most beneficial to the public interest, any bonds of the United States bearing six per centum interest, and redeemable after five and payable in twenty years, which have been or may be lawfully issued under the provisions of any existing act; may reissue the notes so received in exchange; may receive and cancel any notes heretofore lawfully issued under any act of Congress, and in lieu thereof issue an equal amount in notes such as are authorized by this act; and may purchase, at rates not exceeding that of the current market, and cost of purchase not exceeding one-eighth of one per centum, any bonds or certificates of debt of the United States as he may deem advisable. Joint Resolution January 17, 1863. That the Secretary of the Treasury is hereby authorized, if required by the exigencies of the public service, to issue on the credit of the United States the sum of one hundred millions of dollars of United States notes in such form as he may deem expedient, not bearing interest, payable to bearer on demand, and of such denominations, not less than one dollar, as he may prescribe, which notes so issued shall be lawful money and a legal tender, like the similar 189 HAND-BOOK OF FINANCE. notes heretofore authorized, in payment of all debts, public and private, within the United States, except duties on impolrts and interest on the public debt. Act larch 3, 1863. That the Secretary of the Treasury be, and is hereby, authorized to borrow, from time to time, on the credit of the United States, a sum not exceeding three hundred millions of dollars for the current fiscal year, and six hundred millions for the next fiscal year, and to issue therefor coupon or registered bonds, payable at the pleasure of the government after such periods as may be fixed by the Secretary, not less than ten nor more than forty years from date, in coin, and of such denominations, not less than fifty dollars, as he lmay deem expedient, bearing interest at a rate not exceeding six per centum per annum, payable on bonds not exceeding one hundred dollars, annually, and on all other bonds semi-annually, in coin; and he may, in his discretion, dispose of such bonds at any time, upon such terms as he may deem most advisable, for lawful money of the United States, or for any of the certificates of indebtedness or deposit that may at any time be unpaid, or for any of the treasury notes heretofore issued or which may be issued under the provisions of this act. And all the bonds and treasury notes or United States notes issued under the provisions of this act shall be exempt from taxation by or under state or municipal authority: Provided, That there shall be outstanding of bonds, treasury notes, and United States notes, at any time, issued under the provisions of this act, no greater amount altogether than the sum of nine hundred millions of dollars. That the Secretary of the Treasury be, and he is hereby, authorized to issue, on the credit of the United States, four hundred millions of dollars in treasury notes, payable at the pleasure of the United States, or at such time or times not exceeding three years from date as may be found most beneficial to the public interests, and bearing interest at a rate not exceeding six per centum per annum, payable at periods expressed on the face of said treasury notes; and the interest on the said treasury notes and on certificates of indebtedness and deposit hereafter issued, shall be paid in lawful money. The treasury notes thus issued shall be of such denominations as the Secretary may direct, not less than ten dollars, and may be disposed of on the best terms that can be obtained, or may be p)aid to any creditor of the United States willing to receive the same at par. And said treasury notes may be made a legal tender to the 190 UNITED STATES NOTES AND BONDS. same extent as United States notes, for their face value, excloding interest; or they may be made exchangeable under regulations prescribed by the Secretary of the Treasury, by the holder thereof, at the treasury in the city of Washington, or at the office of any assistant treasurer or depositary designated for that purpose, for United States notes equal in amount to the treasury notes offered for exchange, together with the interest accrued and due thereon, at the date of interest payment next preceding such exchange. And in lieu of any amount of said treasury notes thus exchanged, or redeemed or paid at maturity, the Secretary may issue an equal amount of other treasury notes; and the treasury notes so exchanged, redeemed or paid, shall be canceled and destroyed as the Secretary may direct. In order to secure certain and prompt exchanges of United States notes for treasury notes when required as above provided, the Secretary shall have power to issue United States notes to the amount of one hundred and fifty millions of dollars, which may be used if necessary for such exchanges; but no part of the United States notes authorized by this section shall be issued for or applied to any other purposes than said exchanges; and whenever any amount shall have been so issued and applied, the same shall be replaced as soon as practicable from the sales of treasury notes for United States notes. That the Secretary of the Treasury be, and he is hereby, authorized, if required by the exigencies of the public service, for the payment of the army and navy, and other creditors of the government, to issue on the credit of the United States the sum of one hundred and fifty millions of dollars of United States notes, including the amount of such notes heretofore authorized by the joint resolution approved January seventeen, eighteen hundred and sixty-three, in such form as he may deem expedient, not bearing interest, payable to bearer, and of such denominations, not less than one dollar, as he may prescribe, which notes so issued shall be lawful money and a legal tender in payment of all debts, public and private, within the United States, except for duties on imports and interest on the public debt; and any of the said notes, when returned to the treasury, may be reissued from time to time as the exigencies of the public service may require. And in lieu of any of said notes, or any other United States notes, returned to the treasury, and canceled or destroyed, there may be issued equal amounts of United States notes, such as are authorized by this act. And so much of the act to authorize the issue of United States notes, and for other purposes, approved February i 91 HAND-BOOK OF FINANCE. twenty-five, eighteen hundred and sixty-two, and of the act to authorize an additional issue of United States notes, and for other purposes, approved July eleven, eighteen hundred and sixty-two, as restricts the negotiation of bonds to market value, is hereby repealed. And the holders of United States notes, issued under and by-virtue of said acts, shall present the same for the purpose of exchanging the same for bonds, as therein provided, on or before the first day of July, eighteen hundred and sixty-three, and thereafter the right so to exchange the same shall cease and determine. That in lieu of postage and revenue stamps for fractional currency, and of fractional notes, commonly called postage currency, issued or to be issued, the Secretary of the Treasury may issue fractional notes of like amounts in such form as he may deem expedient, and may provide for the engraving, preparation and issue thereof in the treasury department building. And all such notes issued shall be exchangeable by the assistant treasurers and designated depositaries for United States notes, in sums not less than three dollars, and shall be receivable for postage and revenue stamps, and also in payment of any dues to the United States less than five dollars, except duties on imports, and shall be redeemed on presentation at the treasury of the United States in such sums and under such regulations as the Secretary of the Treasury shall prescribe: Provided, that the whole amount of fractional currency issued, including postage and revenue stamps issued as currency, shall not exceed fifty millions of dollars. That the Secretary of the Treasury is hereby authorized to receive deposits of gold coin and bullion with the treasurer or any assistant treasurer of the United States, in sums not less than twenty dollars, and to issue certificates therefor in denominations of not less than twenty dollars each, corresponding with the denominations of the United States notes. The coin and bullion deposited for or representing the certificates of deposit shall be retained in the treasury for the payment of the same on demand. And certificates representing coin in the treasury may be issued in payment of interest on the public debt, which certificates, together with those issued for coin and bullion deposited, shall not at any time exceed twenty per centum beyond the amount of coin and bullion in the treasury; and the certificates for coin or bullion in the treasury shall be received at par in payment for duties on imports. 192 UNITED STATES NOTES AND BONDS. Act March 3, 1864. That in lieu of so much of the loan authorized by the act of March 3, 1863, the Secretary of the Treasury be and is hereby authorized to borrow, on the credit of the United States, not exceeding two hundred millions of dollars during the current fiscal year, bearing date March first, eighteen hundred and sixty-four, or any subsequent period, redeemable at the pleasure of the government after any period not less than five years, and payable at any period not more than forty years from date, in coin, bearing interest not exceeding six per centum a year- and he may dispose of such bonds at any time, on such terms as he may deem most advisable, for lawful money of the United States, or, at his discretion, for treasury notes, certificates of indebtedness or certificates of deposit issued under any act of Congress. Joint Resoliutioin March 17, 1864. That the Secretary of the Treasury be authorized to anticipate the payment of interest on the public debt, by a period not exceeding one year, from time to time, either with or without a rebate of interest upon the coupons, as to him may seem expedient, and he is hereby authorized to dispose of any gold * in the Treasury of the United States not necessary for the payment of interest on the public debt. Act June 30, 1864. That the Secretary of the Treasury be authorized to borrow four hundred millions of dollars, and to issue bonds of the United States, redeemable at the pleasure of the government after any period not less than five nor more than forty years from date, and bear an annual interest not exceeding six per centum, payable semi-annually in coin. The Secretary of the Treasury may issue on the credit of the United States, and in lieu of an equal amount of bonds authorized by the preceding section, and as a part of said loan, not exceeding two hundred millions of dollars, in treasury notes of any denomination not less than ten dollars, payable at any time not exceeding three years from date, or, if thought more expedient, redeemable at any time after three years from date, and bearing interest not exceeding * This is the first instance of the use of the word "gold" instead of "coin" or "gold and silver" in any of the laws of the United States with regard to money obligations of the government issued since 1860. 9 193 HAXD-BOOK OF FINANCE. the rate of seven and three-tenths per centum, payable in lawful money at maturity. And such of them as shall be made payable, principal and interest, at maturity, shall be a legal tender to the same extent as United States notes, for their face value, excluding interest, and may be paid to any creditor of the United States at their face value, excluding interest, or to any creditor cilling to receive theit at par, including interest. That the total amount of bonds and treasury notes authorized by the first and second sections of this act shall not exceed four hundred millions of dollars, in addition to the amounts heretofore issued; nor shall the total amount of United States notes, issued or to be issued, ever exceed four hundred millions of dollars, and such additional sum, not exceeding fifty millions of dollars, as may be temporarily required for the redemption of temporary loan; nor shall any treasury note bearing interest, issued under this act, be a legal tender in payment or redemption of any notes issued by any bank, banking association, or banker, calculated or intended to circulate as money. The Secretary of the Treasury may issue notes of the fractions of a dollar as now used for currency, in such form, with such inscriptions, and with such safeguards against counterfeiting, as he may judge best; but the whole amount of all descriptions of notes or stamps less than one dollar issued as currency, shall not exceed fifty millions of dollars. A~nec)d)le)it to Pac'ifc Railroad Act, J,ity 2, 1G864. That section five of said act be so modified and amended that the Union Pacific Railroad Company, the Central Pacific Railroad Company, and any other company authorized to participate in the construction of said road, may, on the completion of each section of said road. as provided in this act and the act to which this act is an amendment, issue their first mortgage bonds on their respective railroad and telegraph lines to an amount not exceeding the amount of the bonds of the United States, and of even tenor and date, time of maturity, rate and character of interest, with the bonds authorized to be issued to said railroad companies respectively. And the lier of the Ucited States bonids shall be subordinate to that of the bonds of any or either of said companies hereby authorized to be issued on their respective roads, property and equipments, except as to the provisions of the sixth section of the act to which this act is an amendment, relating to the transmission of dispatches and the 194 UNITED STATES NOTES AND BONDS. transportation of mails, troops, munitions of war, supplies and public stores for the government of the United States. Act.2 ry 28, 1865. That in lieu of any bonds authorized to be issued by the first section of the act entitled "An act to provide iways and means for the support of the government," approved June 30, 1864, that may remain unsold at the date of this act, the Secretary of the Treasury may issue, under the authority of said act, treasury notes of the description and character authorized by the second section of said act: Procided(, That the whole amount of bonds authorized as aforesaid and treasury notes issued and to be issued in lieu thereof shall not exceed the sum of four hundred millions of dollars; and such treasury notes may be disposed of for lawful money, or for any other treasury notes or certificates of indebtedness or certificates of deposit issued under any previous act of Congress; and such notes shall be exempt from taxation by or under State or municipal authority. Act iatrch 3, 1865. That the Secretary of the Treasury be, and he is hereby, authorized to borrow, from time to time, on the credit of the United States, in addition to the amounts heretofore authorized, any sums not exceeding, in the aggregate, six hundred millions of dollars, and to issue therefor bonds or treasury notes of the United States in such form as he may prescribe; and so much thereof as may be issued in bonds shall be of denominations not less than fifty dollars, and may be made payable at any period not more than forty years from date of issue, or may be made redeemable, at the pleasure of the government, at or after any period not less than five years nor more than forty years fiom alte, or may be made redeemable and payable as aforesaid, as may be expressed upon their face; and so much thereof as may be issued in treasury notes may be made convertible into any bonds authorized by this act. Pro,'ide(, That the rate of interest on any such bonds or treasury notes, when payable in coin, shall not exceed six per centum per annuan; and when not payable in coin shall not exceed seven and three-tenths per centurn per annuni. Prorided, That nothing herein contained shall be construed as authorizing the issue of legal-tender notes in any form. 195 HAND-BOOK OF FINANCE. Act April 12, 1866. That the act approved March 3, 1865, shall be extended and construed to authorize the Secretary of the Treasury, at his discretion, to receive any treasury notes or other obligations issued under any act of Congress, whether bearing interest or not, in exchange for any description of bonds authorized by the act to which this is an amendment; and also to dispose of any description of bonds authorized by said act, either in the United States or elsewhere, to such an amount, in such manner and at such rates as he may think advisable, for lawful money of the United States or for any treasury notes, certificates of indebtedness or certificates of deposit, or other representatives of value which have been or which may be issued under any act of Congress, the proceeds thereof to be used only for retiring treasury notes or other obligations issued under any act of Congress; but nothing herein contained shall be construed to authorize any increase of the public debt: Provided, That of United States notes not more than ten millions of dollars may be retired and canceled within six months from the passage of this act, and thereafter not more than four millions of dollars in any one month. Act lMarch 2, 1867. That for the purpose of redeeming and retiring any compoundinterest notes outstanding, the Secretary of the Treasury is hereby authorized and directed to issue temporary loan certificates in the manner prescribed by section four of the act entitled "An act to authorize the issue of United States notes and for the redemption or funding thereof, and for funding the floating debt of the United States," approved February twenty-fifth, eighteen hundred and sixty-two; bearing interest at a rate not exceeding three per centum per annum, principal and interest payable in lawful money on demand; and said certificates of temporary loan may constitute and be held, by any national bank holding or owning the same, as a part of the reserve provided for in sections thirty-one and thirty-two of the act entitled "An act to provide a national currency, secured by a pledge of United States bonds, and to provide for the circulation and redemption thereof:" Provided, that the amount of such certificates outstanding at any time shall not exceed fifty millions of dollars. Act July 25, 1868. That for the sole purpose of redeeming and retiring the remainder of the compound interest notes outstanding, the Secretary of the 196 UNITED STATES NOTES AND BONDS. Treasury is authorized to issue an additional amount of temporary loan certificates not exceeding twenty-five millions of dollars, said certificates to bear three per cent interest, payable in lawful money ~,Ia. Act to sti'enigthen the public credit, approved Mlarch 18, 1869 Be it enacted by the Senate and House of Representatives of the United States of America, in Congress assembled: That in order to remove any doubt as to the purpose of the government to discharge all just obligations to the public creditors, and to settle conflicting questions and interpretations by the laws by virtue of which such obligations have been contracted, it is hereby provided and declared that the faith of the United States is solemnly pledged to the payment in coin or its equivalent of all the obligations of the United States not bearing interest, known as the United States notes, and of all the interest-bearing obligations of the United States, except in cases where the law authorizing the issue of such obligations has expressly provided that the same may be paid in lawful money, or other currency than gold and silver. But none of said interest-bearing obligations not already due shall be redeemed or paid before maturity, unless at such time United States notes shall be convertible into coin at the option of the holder, or unless at such time bonds of the United States bearing a lower rate of interest than the bonds to be redeemed can be sold at par in coin. And the United States also solemnly pledges its faith to make provisions at the earliest practicable period for the redemption of the United States notes in coin. Fit()ditlg Act Jttly 14, 1870. That the Secretary of the Treasury is hereby authorized to issue in a sum or sums not exceeding in the aggregate two hundred millions of dollars, coupon or registered bonds of the United States, in such form as he may prescribe, and of denominations of fifty dollars, or some multiple of that sum, redeemable in coin of the present standard value, at the pleasure of the United States, after ten years from the date of their issue, and bearing interest, payable semi-annually in such coin, at the rate of five per cent per annum; also a sum or sums not exceeding in the aggregate three hundred millions of dollars of like bonds, the same in all respects, but payable at the. pleasure of the United States, after fifteen years from their issue, and bearing interest at the rate of four and a half per cent per annum; also a sum or sums not exceeding in the aggregate one thousand millions of 197 r IHAND-BOOK OF FINANCF,. dollars of like bonds, the same in all respects, but payable at the pleasure of the United States after thirty years from the date of their issue, and bearing interest at the rate of four per cent per annum; all of which said several classes of bonds and the interest thereon shall be exempt from the payment of all taxes or duties of the United States, as well as from taxation in any form by or under State, municipal or local a,uthority; and the said bonds shall have set forth and expressed upon their face the above-specified conditions, and shall, with their cc pons, be made payable at the Treasury of the Unlited States. But nothing in this act, or in any other law now in force, shall be construed to authorize any increase whatever of the bonded debt of the United States. That the Secretary of the Treasury is hereby authorized to sell and dispose of any of the bonds issued under this act, at not less than their par value for coin, and to apply the proceeds thereof to the redemption of any of the bonds of the United States outstanding, and known as five-twenty bonds, at their par value; or he may exchange the same for such five-twenty bonds, par for par; but the bonds hereby authorized shall be used for no other purpose whatsoever. And a sum not exceeding one-half of one per cent of the bonds herein authorized is hereby appropriated to pay the expense of preparing, issuing, advertising and disposing of the same. That the payment of any of the bonds hereby authorized after the expiration of the said several terms of ten, fifteen and thirty years, shall be made in amounts to be determined from time to time by the Secretary of the Treasury at his discretion, the bonds so to be paid to be distinguished and described by the dates and numbers, beginning for each successive payment with the bonds of each class last dated and numbered, of the time of which intended payment or redemption the Secretary of the Treasury shall give public notice, and the interest on the particular bonds so selected at any time to be paid shall cease at the expiration of three months from the date of such notice. That the Secretary of the Treasury is hereby authorized. with any coin in the Treasury of the United States which he may lawfully apply to such purpose, or which may be derived from the sale of any of the bonds, the issue of which is provided for in this act, to pay at par and cancel any six per cent bonds of the United States of the kind known as five-twenty bonds, which have become or shall hereafter become redeemable by the terms of their issue. But the particular bonds so to be paid and canceled shall in all cases be indi 198 UNITED STATES NOTES AND BONDS. cated and specified by class, date and number, in the order of their numbers and issue, beginning with the first numbered and issued, in public notice to be given by the Secretary of the Treasury, and in three months after the date of such public notice the interest on the bonds so selected and advertised to be paid shall cease. That the Secretary of the Treasury is hereby authorized, at any time withlin two years from the passage of this act, to receive gold coin of the United States on deposit for not less than thirty days, in sums of not less than one hundred dollars, with the Treasurer, or any assistant treasurer of the United States authorized by the Secretary of the Treasury to receive the same, who shall issue therefor certificates of deposit, made in such form as the Secretary of the Treasury shall prescribe, and said certificates of deposit shall bear interest at a rate not exceeding two and a half per cent per annum; and any amount of gold coin so deposited may be withdrawn from deposit at any time after thirty days from the date of deposit, and after ten days' notice and on the return of said certificates: Provided, That the interest on all such deposits shall cease and determine at the pleasure of the Secretary of the Treasury. And not less than twenty-five per cent of the coin deposited for or represented by said certificates of deposit shall be retained in the treasury for the payment of said certificates; and the excess beyond twenty-five per cent may be applied, at the discretion of the Secretary of the Treasury, to the payment or redemption of such outstanding bonds of the United States heretofore issued and known as the fivetwenty bonds, as he may designate under the provisions of the fourth section of this act; and any certificates of deposit issued as aforesaid mav be received at par, with the interest accrued thereon, in payment for any bonds authorized to be issued by this act. Act Ja)nuary 20, 1871. That the amount of bonds authorized by the act approved July; 14, 1870, entitled "An act to authorize the refunding of the national debt," to be issued bearing five per centum interest per annum, be, and the same is, increased to five hundred millions of dollars, and the interest of any portion of the bonds issued under said act, or this act, may, at the discretion of the Secretary of the Treasury, be made payable quarter-yearly: Protiided, howvever, that this act shall not be construed to authorize any increase of the total amount of bonds provided for by the act to which this act is an amendment. 199 HAND-BOOK OF FINANCE. Act J?tne 8, 1872. That the Secretary of the Treasury is hereby authorized to receive United States notes on deposit without interest from banking associations, and to issue certificates therefor. The certificates issued may be held and counted by national banks as part of their reserve. That nothing contained in this act shall be construed to authorize any expansion or contraction'of the currency; and the United States notes for which such certificates are issued, or other United States notes of like amount, shall be held as special deposits in the treasury and used only for the redemption of such certificates. Act Deceiiiber 17, 1873. That for the purpose of redeeming the bonds called the loan of 1858, it is hereby declared to be the pleasure of the United States to pay all the coupon bonds of said loan on the first day of January, 1874. That the Secretary of the Treasury may issue an equal amount at par of principal and interest of five per cent bonds of the funded loan under the act for refunding the national debt, approved January 20, 1871, for any of the bonds of the loan of 1858, which the holders thereof may, on or before the 1st of February, 1874, elect to exchange. Specie Resumption Act of Jatnuary 14, 1875. ~ 1. That the Secretary of the Treasury is hereby authorized and required, as rapidly as practicable, to cause to be coined at the mints of the United States, silver coins of the denominations of ten, twenty-five and fifty cents, of standard value, and to issue them in redemption of an equal number and amount of fractional currency of similar denominations, or, at his discretion, he may issue such silver coins through the mints, the subtreasuries. public depositories and post-offices of the United States; and upon such issue he is hereby authorized and required to redeem an equal amount ot such fractional currency until the whole amount of such fractional currency outstanding shall be redeemed. ~ 2. That so much of section 3524 of the Revised Statutes of the United States as provides for a charge of one sixth of one per centumn for converting standard gold bullion into coin is hereby repealed, and hereafter no charge shall be made for that service. ~ 3. That section 5777 of the Revised Statutes of the United States, limiting the aggregate amount of the circulating notes of the national banking associations, be, and is hereby, repealed, and 200 UNITED STATES NOTES AND BONDS. each existing banking association may increase its circulating notes in accordance with the existing law, without respect to said aggregate limit; and new banking associations may be organized in accordance with the existing law, without respect to the aggregate limit; and the provisions of the law for the withdrawal and redistribution of national-bank currency among the several States and Territories are hereby repealed; and whenever and so often as circulating notes shall be issued to any such banking association, so increasing its capital or circulating notes, or so newly organized as aforesaid, it shall be the duty of the Secretary of the Treasury to redeem the legal-tender United States notes in excess only of $300,000,000 to the amount of eighty per centum of the sum of nationalbank notes so issued to any such banking association as aforesaid, and to continue such redemption as such circulating notes are issued until there shall be outstanding the sum of $300,000,000 of such legal-tender United States notes, and no more. And on and after the 1st day of January, A.D. 1879, the Secretary of the Treasury shall redeem in coin the United States legal-tender notes then outstanding on their presentation for redemption'at the office of the assistant treasurer of the United States, in the city of New York, in sums of not less than $50. And to enable the Secretary of the Treasury to prepare and provide for the redemption in this act authorized or required, he is authorized to use any surplus revenues from time to time in the treasury not otherwise appropriated, and to issue, sell and dispose of, at not less than par in coin, either of the description of bonds of the United States described in the act of Congress approved July 14, 1870, entitled "An act to authorize the refunding of the national debt," with like privileges and exemptions, to the extent necessary to carry this act into effect, and to use the proceeds thereof for the purposes aforesaid. And all provisions of law inconsistent with the provisions of this act are hereby repealed. Sif)si(iar!/ Silver Coin L(aw, Joint Resolution of Congress July 13, 1876. ~ 1. That the Secretary of the Treasury, under such limits and regulations as will best secure a just and fair distribution of the same through the country, may issue the silver coin at any time in the treasury, to an amount not exceeding $10,000,000, in exchange for an equal amount of legal-tender notes, and notes so received in exchange shall be kept as a special fund, separate and apart from all other money in the treasury, and be issued only upon the retirement 201 NATIONAL BANKS AND BANK CURRENCY. LAWS IN FORCE AUGUST, 1876. HE fbllowing compilation embraces all the laws ill I orce August, 1S76, governing the organization and ilnaniagenent of national balnks and the issue and re(lemption of national-bank currency, under the following lheads, viz.: Organization and Powers of National Banks. Obtaining and Issuing Circulating Notes. Regulation of the Banking Business. Dissolution and Receivership. Tax on Circulation and on Bank Checks. Crimes and -Misdemeanors. Interest Law.s. Thde o)/?t eves a' tM'e se(tiofs aqe the sacne as in the Revised Stat. ttcs. CHAPTER I. ORGANIZATION AND POWERS OF NATIONAL BANKS. (SEC. 5133.) Associations for carrying on the business of banking under this title may be formed by any numnber of natural persons, not less in any case than five. They shall enter into articles of association, which shall specify in general terms the object fbr which the association is formed, and may contain any other provisions, not inconsistent with law, which the association may see fit to adopt for the regulation of its business and the conduct of its affairs. These articles shall be signed by Formationi of national banking associationls. Articles of association. Chapter 1. II. III. IV. V. AVI. VTI. NATIONAL BANKS AND BANK CURRENCY. LAWS IN FORCE AUGUST, 1876. TlIE following compilation embraces all the laws ill _ force August, 1876, governing the organization and management of national banks and the issue and redemption of national-bank currency, under the following heads, viz.: Organization and Powers of National Banks. Obtaining and Issuing Circulating Notes. Regulation of the Banking Business. Dissolution and Receivership. Tax on Circulation and on Bank Checks. Crimes andl Misdemeanors. Interest Law,S. T/le numbers8 of tlie sections are the sane as in the Revised Statutes. CHAPTER I. ORGANIZATION AND POWERS OF NATIONAL BANKS. (SEc. 5133.) Associations for carrying on the business of banking under this title may be formed by any number of natural persons, not less in any case than five. They shall enter into articles of association, which shall specify in general terms the object for which the association is formed, and may contain any other provisions, not inconsistent with law, which the association may see fit to adopt for the regulation of its business and the conduct of its affairs. These articles shall be signed by Formation of national banking associatioris. Articles of association. Chapter 1. II. Ill. IV. V. VI. VTT. HAND-BOOK OF FINANCE. the persons uniting to form the association, and a copy of them shall be forwarded to the Comptroller of the Currency, to be filed and preserved in his office. Organiza- (SEc. 5134.) The persons uniting to form such an tion certificate. association shall, under their hands, make an organiza tion certificate, which shall specifically state: Name of First. The name assumied by such association; which association. name shall be subject to the approval of the Comptroller of the Currency. Place of Second. The place where its operations of discount business. and deposit are to be carried on, designating the State, Territory, or district, and the particular county and city, town, or village. Capital Third. The amount of capital stock and the number stock. of shares into which the same is to be divided. Share- Fourth The names and places of residence of the holders. shareholders, and the number of shares held by each of them. Object of Fifth. The fact that the certificate is made to enable certificate. such persons to avail themselves of the advantages of this title. Acknowl- (SEc. 5135.) The organization certificate shall be edgment of organiza acknowledged before a judge of some court of record, or certificateo notary public; and shall be, together with the acknowlcertificate. edgment thereof, authenticated by the seal of such court, or notary, transmitted to the Comptroller of the Cur rency, who shall record and carefully preserve the same in his office. Corporate (SEc. 5136.) Upon duly making and filing articles of powers of associa- association and an organization certificate, the associations. b tion shall become, as from the date of the execution of 2 Abb.,U. S., 416. its organization certificate, a body corporate, and as such, and in the name designated in the organization certificate, it shall have power: Seal. First. To adopt and use a corporate seal. Succession. Second. To have succession for the period of twenty years from its organization, unless it is sooner dissolved according to the provisions of its articles of association, or by the act of its shareholders owning two-thirds of its stock, or unless its franchise becomes forfeited by some violation of law. 204 NATIONAL BANKS AND BANK CURRENCY. 205 Third. To make contracts. Contracts. Fourth. To sue and be sued, complain and defend, in Suits. any court of law and [or] equity, as fully as natural persons. Fifth. To elect or appoint directors, and by its board Appoint ment of of directors to appoint a president, vice-president, cash- officers. ier, and other officers, define their duties, require bonds of them and fix the penalty thereof, dismiss such officers or any of them at pleasure, and appoint others to fill their places. Sixth. To prescribe, by its board of directors, by-laws By-laws. not inconsistent with law, regulating the manner in which its stock shall be transferred, its directors elected or appointed, its officers appointed, its property transferred, its general business conducted, and the privileges granted to it by law exercised and enjoyed. Seventh. To exercise by its board of directors, or duly Incidental authorized officers or agents, subject to law, all such powers incidental powers as shall be necessary to carry on the business of banking; by discounting and negotiating promissory notes, drafts, bills of exchange, and other evidences of debt; by receiving deposits; by buying and selling exchange, coin and bullion; by loaning money on personal security; and by obtaining, issuing and circulating notes according to the provisions of this Title. But no association shall transact any business except When may such as is incidental and necessarily preliminary to its comnimeensce business. organization, until it has been authorized by the Comptroller of the Currency to commence the business of banking. (SEC. 5137.) A national banking association may Power to purchase, hold, and convey real estate for the following hold real purposes, and for no others: propery. First. Such as shall be necessary for its immediate accommodation in the transaction of its business. Second. Such as shall be mortgaged to it in good faith by way of security for debts previously contracted. Third. Such as shall be conveyed to it in satisfaction of debts previously contracted in the course of its deal ings. HAND-BOOK OF FINANCE. Fourth. Such as it shall purchase at sales under judgments, decrees or mortgages held by the association, or shall purchase to secure debts due to it. Limitation But no such association shall hold the possession of as to mortgages, etoc any real estate under mortgage, or the title and posses sion of any real estate purchased to secure any debts due to it, for a longer period than five years. Minimum (SEC. 5138.) NO association shall be organized under capital d lthis Title with a less capital than one hundred thousand reired. dollars; except that banks with a capital of not less than fifty thousand dollars may, with the approval of the Secretary of the Treasury, be organized in any place tihe population of which does not exceed six thousand inhab itants. No association shall be organized in a city the population of which exceeds fifty thousand persons with a less capital than two hundred thousand dollars. Value and (SEc. 5139.) The capital stock of each association transfer of shall be divided into shares of one hundred dollars each, 'hares of stock. and be deemed personal property, and transferable on the books of the association in such manner as mnay be Rights and prescribed in the by-laws or articles of association. liabilities oifprlitoins Every person becoming a shareholder by such transf(r of persons holding shall, in proportion to his shares, succeed to all the rights shares by transfer. and liabilities of the prior holder of such shares; and no V?an llen chan ge shall be made in the articles of association by rs. T h e Aeses,o,'s. which the rights, remedies or security of the existing 3 Wall. 57. creditors of the association shall be impaired. When capi- (SEC. 5140.) At least fifty per centuirn of the capital tal stock stock of every association shall be paid in before it shall must be paid in and be authorized to commence business; and the remainder certified.....' certified of the capital stock of such association shall be paid in installments of at least ten per centum each, on the whole amount of the capital, as frequently as one install ment at the end of each succeeding month from the time it shall be authorized by the Comptroller of the Currency to commence business; and the payment of each install ment shall be certified to the Comptroller, under oath, Proceed- by the president or cashier of the association. ings if siareholder (SEC. 5141.) Whenever any shareholder, or his fails to pay assignee, fails to pay any installment on the stock when installments. the same is required by the preceding section to be paid, 206 NATIONAIL BANKS AND BANK CURRENTCY. Capital to be re -tored if rediucd beov low inimuni or receiver appointed. Comptroller to determine if association isentitledto colilmellce bubiness. the directors of such association may sell the stock of such delinquent shareholder at public auction, having given three weeks' previous notice thereof in a newspaper published and of general circulation in the city or county where the association is located, or if no newspaper is published in said city or county, then in a newspaper published nearesit thereto, to any person who will pay the highest price therefor, to be not less than the amount then due thereon, with the expenses of advertisement and sale; and the excess, if any, shall be paid to thie delinquent shareholder. If no bidder can be found who will pay for such stock the amount due thereon to the association, and the cost of advertisement and sale, the amount previously paid shall be forfeited to the association, and such stock shall be sold as the directors may order, within six montlhs friom the tinme of such forfeiture, and if not sold it shall be canceled and deducted from the capital stock of the association. If any such cancellation and reduction shall reduce the capital of the association below the nlinimuml of capital required by law, the capital stock shall, within thirty days from the date of such cancellation, be increased to the required amount; in default of which a receiver may be appointed, according to the provisions of section fifty-two hundred and thirty-four, to close up the business of the association. (SEc. 5168.) Whenever a certificate is transmitted to the Comptroller of the Currency, as provided in this Title, and the association transmitting the same notifies the Comptroller that at least fifty per centumn of its capital stock has been duly paid in, and that such association has complied with all the provisions of this Title required to be comiplied with before an association shall be authorized to commence the business of banking, the Comptroller shall examine into the condition of such association, ascertain especially the amount of money paid in on account of its capital, the name and place of residence of each of its directors, and the amount of the capital stock of which each is the owner in good faith, and generally whether such association has complied with all the provisions of this Title required to entitle it to engage in the business of banking; and shall cause to be made and 20 i' HAND-BOOK OF FINANCE. Certificate attested by the oaths of a majority of the directors, and of officers b aof fficers by the president or cashier of the association, a statement and directors. of all the facts necessary to enable the Comptroller to determine whether the association is lawfully entitled to commence the business of banking. Certificate (SEC. 5169.) If, upon a careful examination of the ot authority facts so reported, and of any other facts which may come to commence to the knowledge of the Comptroller, whether by means business, when to be of a special commission appointed by him for the purpose issued. of inquiring into the condition of such association, or otherwise, it appears that such association is lawfully entitled to commence the business of banking, the Comp troller shall give to such association a certificate, under his hand and official seal, that such association has com plied with all the provisions required to be complied with before commencing the business of banking, and that such association is authorized to commence such business. When cer- But the Comptroller may withhold from an association tificate of his certificate authorizing the commencement of business authority may be whenever he has reason to suppose that the shareholders withheld. have formed the same for any other than the legitimate objects contemplated by this Title. Publication (SEC. 5170.) The association shall cause the certificate of crtifi- issued under the preceding section to be published in cate. some newspaper printed in the city or county where the association is located for at least sixty days next after the issuing thereof; or, if no newspaper is published in such city or county, then in the newspaper published nearest thereto. Increase of (SEC. 5142.) Any association formed under this Title capital ctockal may, by its articles of association, provide for an increase stock. of its capital from time to time, as may be deemed expe dient, subject to the limitations of this Title. But the maximum of such increase to be provided in the articles of association shall be determined by the Comptroller of the Currency; and no increase of capital shall be valid until the whole amount of such increase is paid in, and notice thereof has been transmitted to the Comptroller of the Currency, and his certificate obtained specifying the amount of such increase of capital stock, with his 208 NATI-ON.AL BANKS AND BANK CURRENCY. 209 approval thereof, and that it has been duly paid in as part of the capital of such association. (SEC. 5143.) Any association formed under this Title Reduction may, by the vote of shareholders owning two-thirds of stOck.ait its capital stock, reduce its capital to any sum not below the amount required by this Title to authorize the fornation of associations; but no such reduction shall be allowable which will reduce the capital of the association below the amount required for its outstanding circulation, nor shall any such reduction be made until the amount of the proposed reduction has been reported to the Comptroller of the Currency and his approval thereof obtained. (SEc. 5144.) In all elections of directors, and in Rights of deciding all questions at meetings of shareholders, each ehrehtolvted shareholder shall be entitled to one vote on each share of atelections. stock held by him. Shareholders may vote by proxies Proxies. duly authorized in writing; but no officer, clerk, teller or bookkeeper of such association shall act as proxy; and no shareholder whose liability is past due and unpaid shall be allowed to vote. (SEC. 5145.) The affairs of each association shall be Number and elecmanaged by not less than five directors, who shall be tion of elected by the shareholders at a meeting to be held at directors. any time before the association is authorized by the Comptroller of the Currency to commence the business of banking; and afterward at meetings to be held on such day in January of each year as is specified therefor in the articles of association. The directors shall hold office for Term of one year, and until their successors are elected and have office. qualified. (SEC. 5146.) Every director must, during his whole qualifica tio1s of term of service, be a citizen of the United States, and at directors. least three-fourths of the directors must have resided in the State, Territory or District in which the association is located for at least one year immediately preceding their election, and must be residents therein during their continuance in office. Every director must own, in his own right, at least ten shares of the capital stock of the association of which he is a director. Any director who ceases to be the owner of ten shares of the stock, or who 9* HAND-BOOK OF FINANCE. becomes in any other manner disqualified, shall thereby vacate his place. Oath (SEC. 5147.) Each director, when appointed or elected, required from shall take an oath that he will, so far as the duty devolves directors. on him, diligently and honestly administer the affairs of such association, and will not knowingly violate, or wil lingly permit to be violated, any of the provisions of this Title, and that he is the owner in good faith, and in his own right, of the number of shares of stock required by this Title, subscribed by him, or standing in his name on the books of the association, and that the same is not hypothecated, or in any way pledged, as security for any loan or debt. Such oath, subscribed by the director making it, and certified by the officer before whom it is taken, shall be immediately transmitted to the Comp troller of the Currency, and shall be filed and preserved in his Office. Vacancies, (SEC. 5148.) Any vacancy in the board shall be filled how filled by appointment by the remaining directors, and any director so appointed shall hold his place until the next election. Proceed- (SEC. 5149.) If from any cause an election of directors ings where lngs wel re is not made at the time appointed, the association shall no election is held on not for that cause be dissolved, but an election may be the proper dhaey.rPer held on any subsequent day, thirty days' notice thereof in all cases having been given in a newspaper published in the city, town or county in which the association is lo cated; and if no newspaper is published in such city, town or county, such notice shall be published in a newspaper published nearest thereto. If the articles of association do not fix the day on which the election shall be held, or if no election is held on the day fixed, the day for the election shall be designated by the board of directors in their by-laws, or otherwise; or if the directors fail to fix the day, shareholders representing two-thirds of the shares may do so. The president (SEC. 5150.) One of the directors, to be chosen by the musthea b druetor a board, shall be the president of the board. director. Individual (SEC. 5151.) The shareholders of every national bankliahility of iar ng association shall be held individually responsible, hders. equhy and ratably, and not one for another, for all conholders. equally and ratably, and not one for another, for all con 210 NATIONAL BANKS AND BANK CURRENCY. 211 tracts, debts and engagements of such association, to the extent of the amount of their stock therein, at the par value thereof, in addition to the amount invested in such shares; except that shareholders of any banking association now existing under State laws, having not less than five millions of dollars of capital actually paid in, and a surplus of twenty per centum on hand, both to be dletermined by the Comptroller of the Currency, shall be liable only to the amount invested in their shares; and such surplus of twenty per centum shall be kept undiminished, and be in addition to the surplus provided for in this Title; and if at any time there is a deficiency in such surplus of twenty per centum, such association shall not pay any dividends to its shareholders until the deficiency is made good; and in case of such deficiency the Comptroller of the Currency may compel the association to close its business and wind up its affairs under the provisions of chapter four of this Title. (SEC. 5152.) Persons holding stock as executors, administrators, guardians, or trustees, shal-lnot be personally subject to any liabilities as stockholders; but the estates and funds in their hands shall be liable in like manner and to the same extent as the testator, intestate, ward, or person interested in such trust-funds would be, if living and competent to act and hold the stock in his own name. (SEC. 5153.) All national banking associations, designated for that purpose by the Secretary of the Treasury, shall be depositaries of public money, except receipts from customs, under such regulations as may be preseribed by the Secretary; and they may also be employed as financial agents of the government; and they shall perform all such reasonable duties as depositaries of public moneys and financial agents of the government, as may be required of them. The Secretary of the Treasury shall require the associations thus designated to give satisfactory security, by the deposit of United States bonds and otherwise, for the safe-keeping and prompt payment of the public money deposited with them, and for the faithful performance of their duties as financial agents of the government. And every associa Exception as to individual liability. Receiver may be appointed for deficiency in surplus. Executors, trustees, etc., not personally liable. Duties and liabilities of associations when designated as depositaries of public moneys. HIIAND-BOOK OF FINANCE. tion so designated as receiver or depositary of the public money shall take and receive at par all of the national currency bills, by whatever association issued, which have been paid into the government for internal revenue, or for loans or stocks. Organiiza- (SEc. 5154.) Any bank incorporated by special law, tion of State banks or any banking institution organized under a general law as national of any State, may become a national association under banking associa- this Title by the name prescribed in its organization certions. tificate; and in such case the articles of association and the organization certificate may be executed by a majority Miode of of the directors of the bank or banking institution; and procedure. the certificate shall declare that the owners of two-thirds of the capital stock have authorized the directors to make such certificate, and to change and convert the bank or banldng institution into a national association. A niiajor ity of the dlirectors, after executing the articles of associ ation and organization certificate, shall have power to execute all other papers, and to do whatever may be re quired to make its organization perfect and complete as a national association. The shares of any such bank may continue to be for the same amount each as they were before the conversion, and the directors may continue to be the directors of the association until others are elected or appointed in accordance with the provisions of this chapter; and any State bank which is a stockholder in any other bank, by authority of State laws, may continue to hold its stock, although either bank, or both, may be organized under and have accepted the provisions of this To have the Title. When the Comptroller of the Currency has given same rights to such association a certificate, under his hand aindofficial liabilities, etc.. as seal, that the provisions of this Title have been complied other national with, and that it is authorized to commence the business associa-tions. oof banking, the association shall have the same powers tions. and privileges, and shall be subject to the same duties, responsibilities, and rules, in all respects, as are prescribed for other associations originally organized as national banking associations, and shall be held and regarded as Mfiniintim such an association. But no such association shall have capital. a less capital than the amount prescribed for associations organized under this Title. 2 1 —) NATIONAL BAiNKS AND BANK CURRENCY. 213 (SEC. 5155.) It shall be lawful for any bank or bank- State banks having ing association, organized under State laws, and having branches. branches, the capital being joint and assigned to and used by the mother-bank and branches in definite proportions, to become a national banking association in conformity with existing laws, and to retain and keep in operation its branches, or such one or more of them as it may elect to retain; the amount of the circulation redeemable at the mother-bank, and each branch, to be regulated by the amount of capital assigned to and used by each. (SEc. 5156.) Nothing in this Title shall affect any ap- Reservati(,) pointinents made, acts done, or proceedings had or coni- of rights or associamenced prior to the third day of June, eighteen hundred tions. organized and sixty-four, in or toward the organization of any underact of national banking association under the act of February 1863. twenty-five, eighteen hundred and sixty-three; but all associations which, on the third day of June, eighteen hundred and sixty-four, were organized or commnenced to be organized under that act, shall enjoy all the rights and privileges granted, and be subject to all the duties, liabilities, and restrictions imposed by this Title, notwithstanding all the steps prescribed by this Title for the organization of associations were not pursued, if such associations were duly organized under that act. (SEc. 5185.) Associations may be organized in the Organizamanner prescribed by this Title for the purpose of issuing tiooi aons sociations9 notes payable in gold; and upon the deposit of allny for issuing United States bonds bearing interest payable in gold gold-note. wxith the Treasurer of the United States, in the manner prescribed for other associations, it shall be lawful for the Comptroller of the Currency to issue to the association making the deposit circulating notes of different denomi- Denominanations, but none of them of less than five dollars, and ticulaons of circulating not exceeding in amount eighty per centum of the par notes, and ratio of to value of the bonds deposited, which shall express the bonds promise of the association to pay them, upon present,o,- deposited. tion at the office at which they are issued, in gold coin of the United States, and shall be so redeemable. (SEC. 5186.) Every association organized under the rleqsirvee on preceding section shall at all times keep on hand not circulation less than twenty-five per centum of its outstanding cir- banks. less than twenty-five per centurn- of its outstanding cir- Obanks. HAND-BOOK OF FINANCE. culation, in gold or silver coin of the United States; and shall receive at par in the payment of debts the goldnotes of every other such association which at the time of such payment is redeeming its circulating notes in gold coin of the United States, and shall be subject to all the provisions of this Title: Provided, That, in applying the same to associations organized for issuing gold-notes, the terms "lawful money" and "lawful money of the United States" shall be construed to mean gold or silver coin of the United States. CHAPTER II. OBTAINING AND ISSUING CIRCULATING NOTES. What asso- (SEC. 5157.) The provisions of chapters two, three ciations are and four * of this Title, which are expressed without regoverned by Chapters strictive words, as applying to "national banking assoII, III and IV of this ciations," or to " associations," apply to all associations Title.* organized to carry on the business of banking under any act of Congress. United (SEC. 5158.) The term " United States bonds," as lotatdes used throughout this chapter, shall be construed to mean b)ond s d(efined. registered bonds of the United States. UInited (SEC. 5159.) Every association, after having comStates bonds to be plied with the provisions of this Title, preliminary to the bond" to be deposited commencement of the banking business, and before it before commencing shall be authorized to commence banking business under business. this Title, shall transfer and deliver to the Treasurer of the United States any United States registered bonds, beating interest, to an amount not less than thirty'thou sand dollars and not less than one third of the capital stock paid in. Such bonds shall be received by the Treasurer upon deposit, and shall be by him safely kept in his office, until they shall be otherwise disposed of, in pursuance of the provisions of this Title. Bondstobe (SEC. 5160.) The deposits of bonds made by each increased increase association shall be increased as its capital may be paidl * Chapters II, III and IV of this compilation and of the Revised Statutes. 214 Gold-notes to be received at par by all gold-banks. "Lawfu l ioliiey." ho,w conlstruedi for gold-banks. NATIONAL B.ANKS ANI) BANK CURRENCY. 215 up or increased, so that every association shall at all increase of times have on deposit with the Treasurer registered capital. United States bonds to the amount of at least one third M MaL,y b e of its capital stock actually paid in. And any association dininisel( upon thaft may desire to reduce its capital or to close up its reluctioi business and dissolve its organization, may take lip its of capital bonds upon returning to the Comptroller its circulating notes in the proportion hereinafter required, or may take up any excess of bonds beyond one third of its capital stock, and upon which no circulating notes have been delivered. That any association organized under this act, or any June 20, of the acts of which this is an amendment, desiring to 1874. withdraw its circulating notes, in whole or in part, may, Provisions l'or retiring upon the deposit of lawful money with the Treasurer of circulation the United States in sums of not less than nine thousand and with drawing dollars, take up the bonds which said association has on bonds. deposit with the Treasurer for the security of such circulating notes, which bonds shall be assigned to the bank in the manner specified in sections 5162 and 5163 of the Revised Statutes; and the outstanding notes of said association, to an amount equal to the legal-tender notes deposited, shall be redeemed at the Treasury of the United States, and destroyed as now provided by law: Pro,'ide(l, that the amount of the bonds on'deposit for Limit of withdrawal circulation shall not be reduced below fifty thousand dol- of bonds. lars. (SEC. 5161.) To facilitate a compliance with the two Excliange of coup.on preceding sections, the Secretary of the Treasury is f orregusauthorized to receive from any association, and cancel, teored any United States coupon bonds, and to issue in lieu thereof registered bonds of like amount, bearing a like rate of interest, and having the same time to run. (SEC. 5162.) All transfers of United States bonds, Transfer of made by any association under the provisions of this bonds torr Treasurer. Title, shall be made to the Treasurer of the United States in trust for the association, with a memorandum written or printed on each bond, and signed by the cashier, or some other officer of the association making the deposit. A receipt shall be given to the association by the Comptroller of the Currency, or by a clerk appointed by him HAND-BOOK OF FINANCE. for that purpose, stating that the bond is held in trust for the association on whose behalf the transfer is made, and as security for the redemption and payment of any circulating notes that have been or may be delivered to such association. No assignment or transfer of any such bond by the Treasurer shall be deemed valid unless coun tersigned by the Comptroller of the Currency. Registry of (SEC. 5163.) The Comptroller of the Currency shall transfers. keep in his office a book in which he shall cause to be entered, immediately uponl countersigning it, every trans fer or assignment by the Treasurer, of any bonds belong ing to a national banking association, presented for his signature. He shall state in such entry the name of the association from whose accounts the transfer is made, the name of the party to whom it is made, and the par value of the bonds transferred. Notice of (SEC. 5164.) The Comptroller of the Currency shall, transfer to be given to immediately upon countersigning and entering any transassociation. fer or assignment by the Treasurer, of any bonds belong ing to a national banking association, advise by mail the association from whose accounts the transfer is made, of the kind and numerical designation of the bonds, and the amount thereof so transferred. Comp- (SEC. 5165.) The Comptroller of the Currency shall lralleratcoess have at all times, during office hours, access to the books to l)onds, of the Treasurer of the United States for the purpose of .nd to books of ascertaining the correctness of any transfer or assignment Treasurer. of the bonds deposited by an association, presented to Treasurer the Comptroller to countersign; and the Treasurer shall to hav;e tocchest t have the like access to the book mentioned in section access to )ooks of fifty-one hundred and sixty-three, during office hours, to Comptroller. ascertain the correctness of the entries in the same; and the Comptroller shall also at all times have access to the bonds on deposit with the Treasurer, to ascertain their amount and condition. Annual ex- (SEC. 5166.) Every association having bonds deposited .,,lination of bonds tby in the office of the Treasurer of the United States shall, associa- once or oftener in each fiscal year, examine and compare tions. the bonds pledged by the association with the books of the Comptroller of the Currency and with the accounts of the association. and, if they are found correct, to execute 16 NATIONAL BANKS AND BANK CURRENCY. to the Treasurer a certificate setting forth the different kinds and the amounts thereof, and that the same are in the possession and custody of the Treasurer at the date of the certificate. Such examination shall be made at such time or times, during the ordinary business hours, as the Treasurer and the Comptroller, respectively, may select, and may be made by an officer or agent of such association, duly appointed in writing for that purpose; and his certificate before mentioned shall be of like force and validity as if executed by the president or cashier. A duplicate of such certificate, signed by the Treasurer, shall be retained by the association. (SEc. 5167.) The bonds transferred to and deposited Bonds to be with the Treasurer of the United States, by any associa- held to secu~re tion, for the security of its circulating notes, shall be circulation. held exclusively for that purpose, until such notes are redeemed. except as provided in this Title. The Comip- Interest on troller of the Currency shall give to any such association bonds, how collected. powers of attorney to receive and appropriate to its own use the interest on the bonds which it has so transferred to the Treasurer; but such powers shall become inoperative whenever such association fails to redeem its circulating notes. Whenever the market or cash value of any If bonds depreciate, bonds thus deposited with the Treasurer is reduced below deposite the amount of the circulation issued for the same, the to be Comptroller may demand and receive the amount of such crad. depreciation in other United States bonds at cash value, or in money, from the association, to be deposited with the Treasurer as long as such depreciation continues. And the Comptroller, upon the terms prescribed by the Exchange Secretary of the Treasury, may permit an exchange to or rbeturns. of bonds. be made of any of the bonds deposited with the Treasurer by any association, for other bonds of the United States authorized to be received as security for circulating notes, if he is of opinion that such an exchange can be made without prejudice to the United States; and he may direct the return of any bonds to the association which transferred the same, in sums of not less than one thousand dollars, upon the surrender to him and the cancellation of a proportionate amount of such circulating notes: Protcided, That the remaining bonds which shall 10 217 HAND-BOOK OF FINANCE. have been transferred by the association offering to surrender circulating notes are equal to the amount required for the circulating notes not surrendered by such association, and that the amount of bonds in the hands of the Treasurer is not diminished below the amount required to be kept on deposit with him, and that there has been no failure by the association to redeem its circulating notes, nor any other violation by it of the provisions of this Title, and that the market or cash value of the remaining bonds is not below the amount required for the circulation issued for the same. (SEc. 5171.) Upon a deposit of bonds as prescribed by sections fifty-one hundred and fifty-nine and fifty-one hundred and sixty, the association making the same shall be entitled to receive from the Comptroller of the Currency circulating notes of different denominations, in blank, registered and countersigned as hereinafter provided,- equal in amount to ninety per centum of the current market value of the United States bonds so transferred and delivered, but not exceeding ninety per centum of the amount of the bonds at the par value thereof, if bearing interest at a rate not less than five per centum per annum: Provided, That the amount of circulating notes to be furnished to each association shall be in proportion to its paid-up capital, as follows, and no more: Fir-st. To each association whose capital does not exceed five hundred thousand dollars, ninety per centurni of such capital. Second. To each association whose capital exceeds five hundred thousand dollars, but does not exceed one million of dollars, eighty per centumn of such capital. Third. To each association whose capital exceeds one million of dollars, but does not exceed three million[s] of dollars, seventy-five per centum of such capital. Fourth. To each association whose capital exceeds three millions of dollars, sixty per centum of such capital. (SEc. 5172.) In order to furnish suitable notes for circulation, the Comptroller of the Currency shall, under the direction of the Secretary of the Treasury, cause plates and dies to be engraved, in the best manner to Delivery of circulating notes to associations. Ratio to capital of circulating notes issued. Form. denominations and printing of circulating notes. 218 NATIONAL BANKS AND BANK CURRENCY. 219 guard against counterfeiting and fraudulent alterations, and shall have printed therefrom, and numbered, such quantity of circulating notes, in blank, of the denomina tions of one dollar, two dollars, three dollars, five dol lars, ten dollars, twenty dollars, fifty dollars, one hun dred dollars, five hundred dollars, and one thousand dollars, as may be required to supply the associations entitled to receive the same. Such notes shall express upon their face that they are secured by United States bonds, deposited with the Treasurer of the United States, by the written or engraved signatures of the Treasurer and Register, and by the imprint of the seal of the Treasury; and shall also express upon their face the promise of the association receiving the same to pay on demand, attested by the signatures of the president or vice-president and cashier; and shall bear such devices and such other statements, and shall be in such form, as the Secretary of the Treasury shall, by regulation, direct. That the Comptroller of the Currency shall, under such rules and regulations as the Secretary of the Treasury may prescribe, cause the charter numbers of the association to be printed upon all national-bank notes which may be hereafter issued by him. (SEC. 5173.) The plates and special dies to be procured by the Comptroller of the Currency for the printing of such circulating notes shall remain under his control and direction, and the expenses necessarily incurred in executing the laws respecting the procuring of such notes, and all other expenses of the Bureau of the Currency, shall be paid out of the proceeds of the taxes or duties assessed and collected on the circulation of national banking associations under this Title. (SEC. 5174.) The Comptroller of the Currency shall cause to be examined, each year, the plates, dies, bultpieces [bed-pieces], and other material from which the national-bank circulation is printed, in whole or in part, and file in his office annually a correct list of the same. Sutch material as shall have been used in the printing of the notes of associations which are in liquidation, or have closed business, shall be destroyed under such regulations as shall be prescribed by the Comptroller of June o0, 1874. The charter iiUlll)eI-s of banks to be printed upon their notes. Control of plates and dies, and expenses of bureau. Annual examination of plates, dies, etc. r Certain printing material to be destroyed. HAND-BOOK OF FINANCE. the Currency and approved by the Secretary of the Treasury. The expenses of any such examination or destruction shall be paid out of any appropriation made by Congress for the special examination of national banks and bank-note plates. (SEC. 5175.) Not more than one-sixth part of the notes furnished to any association shall be of a less denomination than five dollars. After specie payments are resumed no association shall be furnished with notes of a less denomination than five dollars. (SEC. 5176.) No banking association organized subsequent to the twelfth day of July, eighteen hundred and seventy, shall have a circulation in excess of five hundred thousand dollars.; J That section five thousand one hundred and seventyseven of the Revised Statutes, limiting the aggregate amount of circulating notes of national banking associations, be and is hereby repealed; and each existing banking association may increase its circulating notes in accordance with existing law without respect to said aggregate limit; and new banking associations may be organized in accordance with existing law without respect to said aggregate limit. And whenever, and so often, as circulating notes shall be issued to any such banking association, so increasing its capital or circulating notes, or so newly organized as aforesaid, it shall be the duty of the Secretary of the Treasury to redeem the legal-tender United States notes in excess only of three hundred million of dollars, to the amount of eighty per centumin of the sum of national-bank notes so issued to any such banking association as aforesaid, and to continue such redemption as such circulating notes are issued until there shall be outstanding the sumn of three hundred million dollars of such legal-tender United States notes, and no more. That the amount of United States notes outstanding and to be used as a part of the circulating medium shall not exceed the sum of three hundred and eighty-two million dollars, which said sum shall appear in each Issue of notes under fivec dollars, limited. (:irculation of certain batinks limoited to $~500,000. June 20, 1874. Repeal of limitatioll of aggregeate amount of circulating notes. Redelnption of lezal-tender notes in proportion to the issue of nationalbank notes. Legaltenders not to be reduced below $3WJ,000,000. Ulaximum amount of U. S. notes outstanding. * Sections 5177, 5178, 5179, 5180 and 5181, repealed by act of June 20, 1874. 220 NATIONAL BANKS AND BANK CURRENCY. 221 monthly statement of the public debt, and no part thereof shall be held or used as a reserve. (SEC. 5182.) After any association receiving circulating notes under this Title has caused its promise to pay such notes on demand to be signed by the president or vice-president and cashier thereof, in such manner as to make them obligatory promissory notes, payable on demand, at its place of business, such association may issue and circulate the same as money. And the same shall be received at par in all parts of the United States in payment of taxes, excises, public lands, and all other dues to the United States, except duties on imports; and also for all salaries and other debts and demands owing by the United States to individuals, corporations and associations within the United States, except interest on the public debt, and in redemption of the national currency. (SEC. 5183.) No national banking association shall issue post-notes or any other notes to circulate as money than such as are authorized by the provisions of this Title. Circulating notes, when may be issu,ed. Issue of other notes prohibited. Act of Feb. 18, 1875, correcting Rev. Stat. Merchatnts' Bank vs. State Balk, 1OWall. 604. (SEC. 5184.) It shall be the duty of the Comptroller of Merchants' the Currency to receive worn-out or mutilated circulating Bank rs. State Bank, notes issued by any banking association, and also, on due 10Wall. 604. proof of the destruction of any such circulating notes, to deliver in place thereof to the association other blank circulating notes to an equal amount. Such worn-out or Destroying 11 ~~~~~~~~~~~and mutilated notes, after a memorandum has been entered replacing in the proper books, in accordance with such regulations worn-out and mnutias may be established by the Comptroller, as well as all lated notes. circulating notes which shall have been paid or surrendered to be canceled, shall be destroyed by maceration instead of burning to ashes in presence of four persons, one to be appointed by the Secretary of the Treasury, Actof June one by the Comptroller of the Currency, one by the 23,1874. Treasurer of the United States, and one by the association, under such regulations as the Secretary of the Treasury may prescribe. A certificate of such maceration, signed by the parties so appointed, shall be made in the books of the Comptroller, and a duplicate thereof forwarded to the association whose notes are thus canceled. For what demands shall be received. HAND-BOOK OF FINANCE. CHAPTER III. REGULATION OF THE BANKING BUSINESS. Place of (SEC. 5190.) Tile usual business of each national besichantess., banking association shall be transacted at an office or Mlerchants Bank vs. banking-house located in the place specified in its organState Bank, lOWall. 604. ization certificate. RequireRequirent (SEc. 5191.) Every national banking association in ments as to lawful either of the following cities: Albany, Baltimore, Bosmoney reserve. ton, Cincinnati, Chicago. Cleveland, Detroit, Louisville, Milwaukee, New Orleans, New York, Philadelphia, Pittsburgh Saint Louis, San Francisco and Washmington, shall at all times have on hand, in lawful money of the United States, an amount equal to at least twenty-five Act June per centumn of the aggregate amount of its deposits; and 20, 1874. every other association shall at all times have on hand, in lawful money of the United States, an amount equal to at least fifteen per centum of the aggregate amount of No loans or its deposits. Whenever the lawful money of any associdividends to be made ation in any of the cities named shall be below the ilree i amount of twenty-five per centum of its deposits, and reserve is belowlimit. whenever the lawful money of any other association shall be below fifteen per centum of its deposits, such association shall not increase its liabilities by making any new loans or discounts otherwise than by discounting or purchasing bills of exchange payable at sight, nor make any dividend of its profits until the required pro portion, between the aggregate amount of its deposits and its lawful money of the United States, has been restored. And the Comptroller of the Currency may notify any association, whose lawful-money reserve shall be below the amount above required to be kept on hand, Receiver to make good such reserve; and if such association shall may be appointed fail for thirty days thereafter so to make good its reserve for failure of lawful money, the Comptroller may, with the concurto make good the rence of the Secretary of the Treasury, appoint a receiver reserve. to wind up the business of the association, as provided in section fifty-two hundred and thirty-four. 222 NATIONAL BANKS AND BANK CURRENCY. 223 That every association organized, or to be organized, under the provisions of the said act, and of the several acts amendatory thereof, shall at all times keep and have on deposit in the Treasury of the United States, in lawful money of the United States, a sum equal to five per centum of its circulation, to be held and used for the redemption of such circulation; which sum shall be counted as a part of its lawful reserve, as provided in section two of this act (Sec. 5191 Revised Statutes); and when the circulating notes of any such associations, assorted or unassorted, shall be presented for redemption, in sums of one thousand dollars or any multiple thereof,; to the Treasurer of the United States, the same shall be redeemed in United States notes. All notes so redeemed shall be charged by the Treasurer of the United States to the respective associations issuing the same, and he shall notify them severally, on the first day of each month, or oftener, at his discretion, of the amount of such redemptions; and whenever such redemptions for any association shall amount to the sum of five hundred dollars, such association so notified shall forthwith deposit with the Treasurer of the United States a sum in United States notes equal to the amount of its circulating notes so redeemed. And all notes of national banks, worn, defaced, mutilated, or otherwise unfit for circulation, shall, when received by any assistant treasurer or at any designated depository of the United States, be forwarded to the Treasurer of the United States for redemption as provided herein. And when such redemptions have been so reimbursed, the circulating notes so redeemed shall be forwarded to the respective associations by which they were issued; but if any of such notes are worn, mutilated, defaced, or rendered otherwise unfit for use, they shall be forwarded to the Comptroller of the Currency and destroyed, and replaced as now provided by law: Protidled, That each of said associations shall reimburse to the Treasury the charges for transportation, and the costs for assorting such notes; and the associations hereafte r organized shall also severally reimburse t o the Treasury the cost of engraving such plates as shall be ordered by each association respectively; and the amount June 20, 1874. Redemption fund to be deposited with Treasurer. May be counted as lawful reserve. Provisions relative to redemption of notes by Treasurer. Associations to reimburse the Treasury for cost of r edemption, new plates, etc. Mutilated notes to be returned by assistant treasurers. HAND-BOOK OF FINANCE. assessed upon each association shall be in proportion to the circulation redeemed, and be charged to the fund on deposit with the Treasurer. (SEC. 5192.) Three-fifths of the reserve of fifteen per centum required by the preceding section to be kept, may consist of balances due to an association, available for the redemption of its circulating notes, from associations approved by the Comptroller of the Currency, organized under the act of Juile three, eighteen hundred and sixtyfour, or under this Title, and doing business in the cities of Albany, Baltimore, Boston, Charleston, Chicago, Cincinnati, Cleveland, Detroit, Louisville, Milwaukee, New Orleans, New York, Philadelphia, Pittsburgh, Richmond, Saint Louis, San Francisco and Washington. Clearing-house certificates, representing specie or lawful money specially deposited for the purpose, of any clearing-house association, shall also be deemed to be lawful money in the possession of any association belonging to such clearing-house, holding and owning such certificate, within the preceding section. (SEC. 5193.) The Secretary of the Treasury may receive United States notes on deposit, without interest, from any national banking associations, in sums of not less than ten thousand dollars, and issue certificates therefor in such form as he may prescribe, in denominations of not less than five thousand dollars, and payable on demand in United States notes at the place where the deposits were made. The notes so deposited shall not be counted as part of the lawful-money reserve of the association; but the certificates issued therefor may be counted as part of its lawful-money reserve, and may be accepted in the settlement of clearing-house balances at the places where the deposits therefor were made. (SEc. 5194.) The power conferred on the Secretary of the Treasury, by the preceding section, shall not be exercised so as to create any expansion or contraction of the currency. And United States notes for which certificates are issued under that section, or other United States notes of like amount, shall be held as special deposits in the Treasury, and used only for the redemption of such certificates. Redemption cities and proportion of reserve which may be kept therein. See act of Juine 20, 1874. Clearinghouse certificates deemed lawful money. U. S. certificates of deposit may be issued, and may count as reserve. Limitation upon the issue of certificates of deposit. 224 NATIONAL BANKS AND BANK CURRENCY. 225 (SEc. 5195.) Each association organized in any of the cities named in section fifty-one hundred and ninety-one may keep one-half of its lawful-money reserve in cash deposits in the city of New York. But the foregoing provision shall not apply to associations organized and located in the city of San Francisco for the purpose of issuing notes payable in gold. Each association not organized within the cities named, shall select, subject to the approval of the Comptroller, an association in either of the cities named, at which it will redeem its circulating notes at par. The Comptroller shall give public notice of the names of the associations selected, at which redemptions are to be made by the respective associations, and of any change that may be made of the association at which the notes of any association are redeemed. Whenever any association fails either to make the selection or to redeem its notes as aforesaid, the Comptroller of the Currency may, upon receiving satisfactory evidence thereof, appoint a receiver in the manner provided for in section fifty-two hundred and thirty-four, to wind up its affairs. But this section shall not relieve anlly association from its liability to redeem its circulating notes at its own counter, at par, in lawful money on demand. (SEC. 5196.) Every national banking association formed or existing under this Title, shall take and receive at par, for any debt or liability to it, any and all notes or bills issued by any lawfully organized national banldking association. But this provision shall not apply to any association organized for the purpose of issuing notes payable in gold. (SEC. 5197.) Any association may take, receive, reserve, and charge on any loan or discount made, or upon any note, bill of exchange, or other evidences of debt, interest at the rate allowed by the laws of the State, Territory, or district where the bank is located, and no more, except that where by the laws of any State a different rate is limited for banks of issue organized under State laws,* the rate so limited shall be allowed for associations organized or existing in any such State under Agents for redemption of circulating notes to be designated. See act of June 20, 1874. Receiver may be appointed for failure to redeem notes. National banks to receive notes of all other national banks. Limitations upon rate ot interest which nmay be taken. Tiffany vs. National Bank of Missouri, 18 Wall. 409. * See table of Interest Laws of the States, page 254. 'HAND-BOOK OF FIN-ANCE. this Title. When no rate is fixed by the laws of the State, or Territory, or district, the bank may take, receive, reserve, or charge a rate not exceeding seven per centum, and such interest may be taken in advance, reckoning the days for which the note, bill, or other evidence of debt has to run. And the purchase, discount, or sale of a bona-fide bill of exchange, payable at another place than the place of such purchase, discount, or sale, at not more than the current rate of exchange for sight drafts in addition to the interest, shall not be considered as taking or receiving a greater rate of The purchase or discount of bills of exchange not usury. interest. Penalty for (SEC. 5198.) The taking, receiving, reserving, or taking usurious charging a rate of interest greater than is allowed by interest. the preceding section, when knowingly done, shall be deemed a forfeiture of the entire interest which the note, bill, or other evidence of debt carries with it, or which has been agreed to be paid thereon. In case the greater rate of interest has been paid, the person by whom it has been paid, or his legal representatives, may recover back, in an action in the nature of an action of debt, twice the amount of the interest thus paid from the association taking or receiving the same; provided such action is commenced within two years from the time the usurious transaction occurred. In what Suits, actions and proceedings against any associacourts suits may be tion under this Title may be had in any circuit, district, or brought. territorial court of the United States held within the See act of district in which such association may be established, Feb. 18, Fel. 18, or in any State, county, or municipal court in the county correcting or city in which said association is located, having juris ev. Stat. diction in similar cases. Dividends (SEC. 5199.) The directors of any association may, and surplus seri-annually, declare a dividend of so much of the net fund. profits of the association as they shall judge expedient; but each association shall, before the declaration of a dividend, carry one-tenth part of its net profits of the preceding half-year to its surplus fund until the same shall amount to twenty per centum of its capital stock. Limit of (SEC. 5200.) The total liabilities to any association, liabilities of any person, or of any company, corporation, or firm, 226 NATIONAL BANKS AND BANK CURRENCY. 227 for money borrowed, including, in the liabilities of a to an association company or firm, the liabilities of the several members of any thereof, shall at no time exceed one-tenth part of the person, firm, or amount of the capital stock of such association actually corporation. paid ill. But the discount of bills of exchange drawn in The discount good faith against actually existing values, and the dis- of bills of count of commercial or business paper actually owned exchange, etc., not a iy thile person negotiating the same, shall not be con- loan. sidered as money borrowed. (SEC. 5201.) No association shall make any loan or Associa tions not to discount on the security of the shares of its own capital loan upon stock, nor be the purchaser or holder of any such shares, theor purchase their own unless such security or purchase shall be necessary to stock. Bank vs. prevent loss upon a debt previously contracted in good Lanier, i11 faith; and stock so purchased or acquired shall, within BWall. rd369; Ballard vs. six months from the time of its purchase, be sold or dis- Bank, 18 posed of at public or private sale; or, in default thereof, Wall. 589. a receiver may be appointed to close up the business of Receiver the association, according to section fifty-two hundred apapointed and thirty-four. frfailure tosgell stock. (SEc. 5202.) No association shall at any time be Limit of indebted indebted, or in any way liable, to an amount exceeding ness of the amount of its capital stock at such time actually paid association. in and remaining undiminished by losses or otherwise, except on account of demands of the nature following: First. Notes of circulation. Exceptions. Second. Moneys deposited with or collected by the association. Third. Bills of exchange or drafts drawn against money actually on deposit to the credit of the associa tion, or due thereto. Fourth. Liabilities to the stockholders of the associa tion for dividends and reserve profits. (SEC. 5203.) No association shall, either directly or Circulating indirectly, pledge or hypothecate any of its notes of notes not to be hypothe circulation, for the purpose of procuring money to be cated, nor used to paid in on its capital stock, or to be used in its banking increase operations, or otherwise; nor shall any association use capital. its circulating notes, or any part thereof, in any manner or form, to create or increase its capital stock. HAND-BOOK OF FINANCE. Withdrawal (SEC. 5204.) No association, or any member thereof, of capital prohibited.al shall, during the time it shall continue its banking operations, withdraw, or permit to be withdrawn, either in the form of dividends or otherwise, any portion of its capital. If losses have at any time been sustained by any such association, equal to or exceeding its undivided Dividend profits then on hand, no dividend shall be made; and no not to exeed net tdividend shall ever be made by any association, while it exceed net profits. continues its banking operations, to an amount greater than its net profits then on hand, deducting therefrom Bad debts its losses and bad debts. All debts due to any associadefined. tions, on which interest is past due and unpaid for a period of six months, unless the same are well secured, and in process of collection, shall be considered bad debts within the meaning of this section. But nothing in this section shall prevent the reduction of the capital stock of the association under section fifty-one hundred and forty-three. Enforcing (SEC. 5205). Every association which shall have failed payment of deficiency to pay up its capital stock, as required by law, and every in capital association whose capital stock shall have become imstock. paired by losses or otherwise, shall, within three months after receiving notice thereof from the Comptroller of the Currency, pay the deficiency in the capital stock, by assessment upon the shareholders pro rata for the amount of capital stock held by each; and the Treasurer of the United States shall withhold the interest upon all bonds held by him in trust for any such association, upon notification from the Comptroller of the Currency, until Receiver otherwise notified by him. If any such association shall pmay be ap- fail to pay up its capital stock, and shall refuse to go pointed for failure to into liquidation, as provided by law, for three months pay up capital. after receiving notice from the Comptroller, a receiver may be appointed to close up the business of the associ ation, according to the provisions of section fifty-two hundred and thirty-four. June 30. And provided, that if any shareholder or shareholders 86 of such bank shall neglect or refuse, after three months' notice to pay the assessment, as provided in this section, it shall be the duty of the board of directors to cause a sufficient amount of the capital stock of such shareholder 228 I NATIONAL BANKS AND BANK CURRENCY. 229 or shareholders to be sold at public auction (after thirty days' notice shall be given by posting such notice of sale in the office of the bank, and by publishing such notice in a newspaper of the city or town in which the bank is located, or in a newspaper published nearest thereto) to make good the deficiency; and the balance, if any, shall be returned to such delinquent shl-trcholder or shareholders. That all United States officers charged with the receipt or disbursement of public moneys, and all officers of national banks, shall stamp or write in plain letters the word "counterfeit," "altered" or " worthless," upon all fraudulent notes issued in the form of, and intended to circulate as money, which shall be presented at their places of business; and if such officers shall wrongfully stamp any genuine note of the United States, or of the national banks, they shall, upon presentation, redeem such notes at the face value thereof. SEC. 6. That all savings banks or savings and trust companies organized under authority of any act of Congress shall be, and are hereby, required to make, to the Comptroller of the Currency, and publish, all the reports which national banking associations are required to quake and publish under the provisions of sections fiftytwo hundred and eleven, fifty-two hundred and twelve and fifty-two hundred and thirteen of the Revised Statutes, and shall be subject to the same penalties for failure to make or publish such reports as are therein provided; which penalties may be collected by suit before any court of the United States in the district in which said savings banks or savings and trust companies may be- located. And all savings or other banks now organized, or which shall hereafter be organized, in the District of Columbia, under any act of Congress, which shall have capital stock paid up in whole or in part, shall be subject to all the provisions of the Revised Stat utes, and of all acts of Congress applicable to national banking associations, so far as the same may be appli cable to such savings or other banks: Provided, that such savings banks now established shall not be required Bank offlicers to stamp cotunterfcit and altered notes. Act June 30, 1876. Sa viogs Banks and Trust Co's to make reports to the Comptroller of the Cuirrency. HANXD-BOOK OF FINANCE. to have a paid in capital exceeding one hundred thou sand dollars. Associ- (SEC. 5206.) No association shall at any time pay out atiopas not on loans or discounts, or in purchasing drafts or bills of to pay out uncurrent exchange, or in payment of deposits, or in any other note,,. mode pay or put in circulation, the notes of any bank or banking association which are not, at any such time, re ceivable, at par, on deposit, and in payment of debts by the association so paying out or circulating such notes; nor shall any association knowingly pay out or put in circulation any notes issued by any bank or banking association which at the time of such paying out or put ting in circulation is not redeeming its circulating notes in lawful money of the United States. Penalty for (SEC. 5208.) It shall be unlawful for any officer, clerk, certifying cfrtizng or agent of any national banking association to certify checks. any check drawn upon the association unless the person or company drawing the check has on deposit with the association, at the time such check is certified, an amount of money equal to the amount specified in such check. Any check so certified by duly authorized officers shall be a good and valid obligation against the Receiver association; but the act of any officer, clerk or agent of may be appointed any association, in violation of this section, shall subject for fal.-e such bank to the liabilities and proceedings on the part certification. of the Comptroller as provided for in section fifty-two hundred and thirty-four. List of (SEC. 5210.) The president and cashier of every nashareholders to tional banking association shall cause to be kept at all b) kept,t times a full and correct list of the names and residences subject to inspection. of all the shareholders in the association, and the. num ber of shares held by each, in the office where its busi ness is transacted. Such list shall be subject to the inspection of all the shareholders and creditors of the association, and the officers authorized to assess taxes under State authority, during business-hours of each day List to be in which business may be legally transacted. A copy of sent to Comp- such list, on the first Monday of July of each year, veritroller fled by the oath of such president or cashier, shall be annuall y. transmitted to the Comptroller of the Currency. 230 NATIONAL BANKS AND BANK CURRENCY. 231 (SEc. 5211.) Every association shall make to the Comptroller of the Currency not less than five reports d u r i n g each year according to the form whic h may be prescribed by him, verified by the oath or affirmation of the president or cashier of such association, and attested by the signature of at least three of the directors. Each such report shall exhibit, in detail and under appropriate heads, the resources and liabilities of the associations at the close of business on any past day by him specified; and shall be transmitted to the Comptroller within five days after the receipt of a request or requisition therefor from him, and in the same form in which it is made to the Comptroller shall be published in a newspaper published in the place where such association is established, or if there is no newspaper in the place, then in the one published nearest thereto in the same county, at the expense of the association; and such proof of publication shall be furnished as may be required by the Comptroller. The Comptroller shall also have power to call for special reports from any particular association whenever in his judgment the same are necessary in order to a full and complete knowledge of its condition. (SEC. 5212.) In addition to the reports required by the preceding section, each association shall report to the Comptroller of the Currency, within ten days after declaring any dividend, the amount of such dividend, and the amount of net earnings in excess of such dividend. Such reports shall be attested by the oath of the president or cashier of the association. (SEC. 5213.) Every association which fails to make and transmit any report required under either of the two preceding sections shall be subject to a penalty of one hundred dollars for each day after the periods, respectively, therein mentioned, that it delays to make and transmit its report. Whenever any association delays or refuses to pay the penalty herein imposed, after it has been assessed by the Comptroller of the Currency, the amount thereof may be retained by the Treasurer of the United States, upon the order of the Comptroller of the Currency, out of the interest, as it may become due to the association, on the bonds deposited with him to Provisions relative to reports of associations to Comptroller. Reports of dividends and earnings. Penalty for failure to make reports to Comptroller. HAND-BOOK OF FINANCE. secure circulation. All sums of money collected for penalties under this section shall be paid into the Treas ury of the United States. (SEC. 5214.) In lieu of all existing taxes, every asso ciation shall pay to the Treasurer of the United States, in the months of January and July, a duty of one-half of one per centum each half year upon the average amount of its notes in circulation, and a duty of one-quarter of one per centum each half year upon the average amount of its deposits, and a duty of one-quarter of one per centum each half year on the average amount of its capital stock, beyond the amount invested in United States bonds. (SEC. 5215.) In order to enable the Treasurer to assess the duties imposed by the preceding section, each association shall, within ten days from the first days of January and July of each year, make a return, under the oath of its president or cashier, to the Treasurer of the United States, in such form as the Treasurer may prescribe, of the average amount of its notes in circulation, and of the average amount of its deposits, and of the average amount of its capital stock, beyond the amount invested in United States bonds, for thie six nmouths next preceding the most recent first day of January or July. Every association which fails so to make such return shall be liable to a penalty of two hundred dollars, to be collected either out of the interest as it may become due such association on the bonds deposited with the Treasurer, or, at his option, in the manner in which penalties are to be collected of other corporations under the laws of the United States. (SEC. 5216.) Whenever any association fails to make the half-yearly return required by the preceding section, the duties to be paid by such association shall be assessed upon the amount of notes delivered to such association by the Comptroller of the Currency, and upon the highest amount of its deposits and capital stock, to be ascertained in such manner as the Treasurer may deem best. (SEC. 5217.) Whenever an association fails to pay the duties imposed by the three precedin. sections, the,ums due may be collected in the manner provided for the col Dlty3 oni circu,ilation, deposits, and capital stock. Semiannual return of circulation, deposits, t(nd capital stock. Penalty for failure to iiake return. Method of assessment if return is. not made. How tax ma t be collected if association fails to pay. 232 NATIONAL BANKS AND BANK CURRENCY. 233 lection of United States taxes from other corporations; or the Treasurer may reserve the amount out of the interest, as it may become due, on the bonds deposited with him by such defaulting association. (SEC. 521S.) In all cases where an association has Refunding excess of paid or may pay in excess of what may be or has been duties paid. found due from it, on account of the duty required to be paid to the Treasurer of the United States, the association may state an account therefor, which, on being certified by the Treasurer of the United States, and found correct by the First Comptroller of the Treasury, shall be refunded in the ordinary manner by warrant on the Treasury. (SEC. 5219.) Nothing herein shall prevent all the Provisions relative to shares in any association from being included in the rSetl,aat.veto valuation of the personal property of the owner or holder taxation of associaof such shares, in assessing taxes imposed by authority of tions. the State within which the association is located; but the Bank ofrce Cmmerce legislature of each State may determine and direct the vs. New York City, manner and place of taxing all the shares of national 2 B1. 620; banking associations located within the State, subject Van Allen vs. The only to the two restrictions, that the taxation shall not Assess)rs, 8 W a]l. 573' be at a greater rate than is assessed upon other moneyed People rs. capital in the hands of individual citizens of such State, The Conm missioners, and that the shares of any national banking association 4 Wall. 244; Bradley vs. owned by non-residents of any State shall be taxed in The People, the city or town where the bank is located, and not else- 4N Wall. 459; National where. Nothing herein shall be construed to exempt the Bank ts. - The Com reaLl property of associations from either State, county, or monw ealth, mnunicipal taxes, to the same extent, according to its 9 Wal. 353; Lio-nberger value, as other real property is taxed. vs. Rouse, (SEC. 5240.) The Comptroller of the Currency, with Ap.oi468t -~~~~~~~~wt Appoinit thle approval of the Secretary of the Treasury, shall, as ment, powers and often as shall be deemed necessary or proper, appoint a duties of suitable person or persons to make an examination of the bank examiners. affairs of every banking association, who shall have power to make a thoroughl examination into all the affairs of the association, and, in doing so, to examine any of the offi cers and agents thereof on oath: and shall make a full and detailed report of the condition of the association to the Comptroller. All persons appointed to be examiners 10' iv HAND-BOOK OF FINANCE. of national banks not located in the redemption-cities specified in section five thousand one hundred and ninetytwo of the Revised Statutes of the United States, or in anvy one of the States of Oregoni, California and Nevada, or in the Territories, shall receive compensation for such exan'iuation as follows: For examining national banks having a capital less than one hundred thousand dollars, twenty dollars; those hatvini,, a capital of one hundred thousand dollars and less thani three hundred thousand dollars, twenty-five dollars; those having a capital of three hundred thousand dollars and less than four hundred thousaId dollars, thirty-five dollars; those having a capital of four hundred thousand dollars and less than five hundred thousand dollars, forty dollars; those having a capital of five hniidred thousand dollars and less than six hundred thousand dollars, fifty dollars; those having a capital of six hundred th ousandl dollars and over, seventy-five dollars; which amounts shall be assessed by the Comptroller of the Currency upoIl, and paid by, the respective associations so examined, and shall be in lieu of the compensation and mileage heretofore allowed for making said examinations; and persons appointed to make exainiation of national banks in the cities named in section five thousand one hundred andcl ninety-two of the Revised Statutes of the United States, or in any one of the States of Oregon, California and Nevada, or in the Territories, shall receive such compensation as may be fixed by the Secretary of the Treasury upon the recollmmendation of the Comptroller of the Currency; and the same shall be assessed and paid in the -manner hereinbefore provided. But no person shall be appointed to examine the affairs of any banking association of which he is a director or other officer. (SEC. 5241.) No association shall be subject to any visitorial powers other than such as are authorized by this Title. or are vested in the courts of justice. (SEC. 5243.) All banks not organized and transacting business under the national-currency laws, or under this Title, and all persons or corporations doing the business of bankers, brokers, or savings institutions, except savings-banks authorized by Congress to use the word Compensation of examiners. Act of Feb. 19, 1875, Rex. s t t. Not to examine banks of which they are officers. Limitation of visitorial powers. Use of the word national" in title, prohibited to other than national banks. -— )34 40 NATIONAL BANKS AND B.ANK CURRENCY. "national" as a part of their corporate name, are prohibited from using the word "national" as a portion of the name or title of such bank, corporation, firm or partnership; and any violation of this prohibition committed after the third day of September, eighteen hundred and seventy-three, shall subject the party chargeable therewith to a penalty of fifty cdollars for each day during which it is comimitted or repeated. CHAPTER IV. DISSOLUTIONP AND RECEIVEIISHIP. (SEC. 5220.) Any association may go into liquidation Voluntary and be closed by the vote of its shareholders owning liquidation. two-thirds of its stock. (SEC. 5221.) Whenever a vote is taken to go into Notice of inlction liquidation it shall be the duty of the board of directors to go into to cause notice of this fact to be certified, under the seal liquidation. of the association, by its president or cashier, to the Comptroller of the Currency, and publication thereof to be made for a period of two months in a newspaper published in lthe city of New York, and also in a newspaper published in the city or town in which the association is located, or if no newspaper is there published, then in the newspaper published nearest thereto, that the association is closing up its affairs, and notifying the holders of its notes and other creditors to present the notes and other claims against the association for payment. (SEC. 5222.) Within six months from the date of the Deposit of lawful vote to go into liquidation, the association shall deposit money to with the Treasurer of the United States, lawful money redeelnt. circulation. of the United States sufficient to redeem all its outstanding circulation. The Treasurer shall execute duplicate receipts for money thus deposited, and deliver one to the association and the other to the Comptroller of the Currency, stating the amount received by him, and the purpose for which it has been received; and the money shall be paid into the Treasury of the United States, and placed to the credit of such association upon redemption account. 235 H-IIND-BOOK OF FINANC(E. Consolidat- (SEC. 5223.) An association which is in good faith ing banks eged banoks winding up its business for the purpose of consolidating neediaot deposit with another association shall not be required to deposit lawful money. lawful money for its outstanding circulation; but its assets and liabilities shall be reported by the association with which it is in process of consolidation. Re-assign- (SEC. 5224.) Whenever a sufficient deposit of lawful meut of bonds to money to redeem the outstanding circulation of an closed association proposing to close its business has been bk made, the bonds deposited by the association to secure payment of its notes shall be re-assigned to it, in the manner prescribed by section fifty-one hundred and Notes to be sixty-two. And thereafter the association and its sharetredeemed holders shall stand discharged from all liabilities upon the circulating notes, and those notes shall be redeemed Proceed- at the Treasury of the United States. And if any such ings when association bank shall fail to make the deposit and take up its bonds fails to for thirty days after the expiration of the time specified, deposit lawful the Comptroller of the Currency shall have power to sell money. the bonds pledged for the circulation of said bank, at See act of public auction in New York city, and, after providing Feb.18, for the redemption and cancellation of said circulation, 18-5, fr rdmto correcting and the necessary expenses of the sale, to pay over any Rev. Stat. balance remaining to the bank or its legal representative. Destruction (SEC. 5225.) Whenever the Treasurer has redeemed of redeemed ofrteeemed any of the notes of an association which has commenced to close its affairs under the six [five] preceding sections, he shall cause the notes to be mutilated and charged to Act of June the redemption account of the association; and all notes 23 1874. SO redeemed by the Treasurer shall, every three months, be certified to and destroyed in the manner prescrinbed in section fifty-one hundred and eighty-four. MNode of (SEC. 5226.) Whenever any national banking associaprotesting notes. tion fails to redeem in the lawful money of the United States any of its circulating notes, upon demand of pay ment duly made during the usual hours of business, at the office of such association, or at its designated place of redemption, the holder may cause the same to be protested, in one package, by a notary public, unless the president or cashier of the association whose notes aIre presented for payment, or the president or cashier of the 236 NATIONAL BANKS AND BANK CURRENCY. association at the place at which they are redeemable offers to waive demand and notice of the protest, and, in pursuance of such offer, makes, signs, and delivers to the party making such demand an admission in writing, stating the time of the demand, the amount demanded, and the fact of the non-payment thereof. The notary public, on making such protest, or upon receiving such admission, shall forthwith forward such admission or notice of protest to the Comptroller of the Currency, retaining a copy thereof. If, however, satisfactory proof is produced to the notary public that the payment of the notes demanded is restrained by order of any court of competent jurisdiction, he shall not protest the same. When the holder of any notes causes more than one note One protest fee, only, or package to be protested on the same day, he shall not on same receive pay for more than one protest. day (SEC. 5227.) On receiving notice that any national banking association has failed to redeem any of its circulating notes, as specified in the preceding section, the Comptroller of the Currency, with the concurrence of the ExaminaSecretary of the Treasury, may appoint a special agent, tpecibal Secretary ~~~~~~~~~~~~~special of whose appointment immediate notice shall be given agent, after notice of to such association, who shall immediately proceed to protest. ascertain whether it has refused to pay its circulating notes in the lawful money of the United States, when demanded, and shall report to the Comptroller the fact so ascertained. If, from such protest, and the report so Forfeiture made, the Comptroller is satisfied that such association of bonds. has refused to pay its circulating notes and is in default, he shall, within thirty days after he has received notice of such failure, declare the bonds deposited by such association forfeited to the United States, and they shall thereupon be so forfeited. (SEc. 5228.) After a default on the part of an asso- Association not to do ciation to pay any of its circulating notes has been business ascertained by the Comptroller, and notice thereof has after notice of protest. been given by him to the association, it shall not be lawful for the association suffering the same to pay out any Act of Feb. of its notes, discount any notes or bills, or otherwise cor187recting prosecute the business of banking, except to receive and Rev. Stat. 237 - HAND-BOOK OF FINANCE. safely keep money belonging to it, and to deliver special deposits. Notice to (SEC. 5229.) Immediately upon declaring the bonds noteholders. of an association forfeited for non-payment of its notes, the Comptroller shall give notice, in such manner as the Secretary of the Treasury shall, by general rules or otherwise, direct, to the holders of the circulating notes of such association, to present them for payment at the Redempl Treasury of the United States; and the same shall be lion of tiotl at paid as presented in lawful money of the United States; n-otes at TrIeasury, whereupon the Comptroller may, in his discretion, cancel andi cancellation of an amount of bonds pledged by such association equal bonids. at current market rates, not exceeding par, to the notes palid. Sale of (SEC. 5230.) Whenever the Comptroller has become bonds at teo Iauction atstisfied, by the protest or the waiver and admission auction. specified in section fifty-two hundred and twenty-six, or by the report provided for in section fifty-two hundred and twenty-seven, that any association has refused to pay its circulating notes, he may, instead of canceling its bonds, cause so much of them as may be necessary to redeem its outstanding notes to be sold at public auction in the city of New York, after giving thirty days' notice The United of such sale to the association. For any deficiency mn states to heave a the proceeds of all the bonds of an association, when paramount thus sold, to reimburse to the United States the amount lien upon assets ofas- expended in paying the circulating notes of the associasociations. tion, the United States shall have a paramount lien upon all its assets; and such deficiency shall be made good out of such assets in preference to any and all other claims whatsoever, except the necessary costs and expenses of administering the same. Sale of (SEC. 5231.) The Comptroller may, if he deems it for lii(,s at the interest of the United States. sell at private sale any private sale. of the bonds of an association shown to have made default in paying its notes, and receive therefor either money or the circulating notes of the association. But no such bonds shall be sold by private sale for less than par, nor for less than the market value thereof at the Transfer of time of sale; and no sales of any such bonds, either bonds sold. public or private, shall be complete until the transfer of 238 NATIONAL BANKS AND BANK CURRENCY. 239 the bonds shall have been made with the formalities prescribed by sections fifty-onle hundred and sixty-two, fiftyone hundred and sixty-three, and fifty-one hundred and sixty-four. (SEC. 5232.) The Secretary of the Treasury may, from Disposition to be made time to time, make such regulations respecting the dis- of notes reposition to be made of circulating notes after presenta- deemed by Treasurer. tion at the Treasury of the United States for payment, and respecting the perpetuation of the evidence of the payment thereof, as may seem to him proper. (SEC(. 5233.) All notes of national banking associa- Cancellations presented at the Treasury of the United States for tion of notes. payment shall, on being paid, be canceled. (SEC. 5234.) On beconming satisfied, as specified ill Appoint ment and sections fifty-two hundred and twenty-six and fifty-two duties of hundred and twenty-seven, that any association has receivers. Kennedy refused to pay its circulating notes as therein mentioned, vs. Gibson, 8 Wall. 498; and is in d(efault, the Comptiroller of the Currency may Bank of forthwith appoint a receiver, and require of him such Bethel Vi..e Pahqniioque bond and security as he deems proper. Such receiver, Bank, 14 Wall. 383; under the direction of the Comptroller, shall take posses- Banlk v8s sion of the books, records, and assets of every descrip- Kallnedy. 16; tion of such association, collect all debts, dues, and claims In re. Platt, Receiver, belonging to it, and, upon the order of a court of record etc., 1 Ben. of competent jurisdiction, may sell or compound all bad 534. or doubtful debts, and, on a like order, may sell all the real and personal property of such association, on such terms as the court shall direct; and may, if necessary to pay the debts of such association, enforce the individual liability of the stockholders. Such receiver shall pay over all money so made to the Treasurer of the United States, subject to the order of the Comptroller, and also make report to the Comptroller of all his acts and proceeclings. That whenever any national banking association shall June 30, be dissolved, and its rights, privileges, and franchises 1876. declared forfeited, as prescribed in section fifty-two hundred and thirty-nine of the Revised Statutes of the United States, or whenever any creditor of any national banking association shall have obtained a judgment against it in aniy court of record, and made application, accompanied HAND-BOOK OF FLNANCE. by a certificate from the clerk of the court stating that such judgment has been rendered and has remained unpaid for the space of thirty days; or whenever the Comptroller shall become satisfied of the insolvency of a national banking association, he may, after due examination of its affairs, in either case, appoint a receiver, who shall proceed to close up such association, and enforce the personal liability of the shareholders, as provided in section fifty-two hundred and thirty-four of said statutes. That when any national banking association shall have gone into liquidation under the provisions of section five thousand two hundred and twenty of said statutes, the individual liability of the shareholders provided for by section fifty-one hundred and fifty-one of said statutes may be enforced by any creditor of such association, by bill in equity in the nature of a creditor's bill, brought by such creditor on behalf of himself and of all other creditors of the association, against the shareholders thereof, in any court of the United States having original jurisdiction in equity for the district in which such association may have been located or established. That whenever any association shall have been or shall be placed in the hands of a receiver, as provided in section fifty-two hundred and thirty-four and other sections of said statutes, and when, as provided in section fifty-two hundred and thirty-six thereof. the Comptroller shall have paid to each and every creditor of such association, not including shareholders who are creditors of such association, whose claim or claims as such creditor shall have been proved, or allowed as therein prescribed, the full amount of such claims and all expenses of {he receivership, and the redemption of the circulating notes of such association shall have been provided for by depositing lawful money of the United States with the Treasurer of the United States. the Comptroller of the Currency shall call a meeting of the shareholders of such association by giving notice thereof for thirty days in a newspaper published in the town, city, or county where the business of such association was carried on, or if no newspaper is there published, in the newspaper published When the Coomptroller may appoint a receiver. Liability of stockholders of liquidating banks. Comptroller shall call meetings of shareholders of banks inthe hands of receivers. 240 NATIONAL BANKS AND BANK CURRENCY. nearest thereto, at which meeting the shareholders shall elect an agent, voting by ballot, in person or by proxy, each share of stock entitling the holder to one vote; and when such agent shall have received votes representing at least a majority of the stock in value and number of shares, and when any of the shareholders of the association shall have executed and filed a bond to the satisfaction of the Comptroller of the Currency, conditioned for the payment and discharge in full of any and every claim that may hereafter be proved and allowed against such association by and before a competent court, and for the faithful performance and discharge of all and singular the duties of such trust, the Comptroller and the receiver shall thereupon transfer and deliver to such agent all the undivided or uncollected or other assets and property of such association then remaining in the hands or subject to the order or control of said Comptroller and said receiver, or either of them; and for this purpose, said Comptroller and said receiver are hereby severally empowered to execute any deed, assignment, transfer, or other instrument in writing that may be necessary and proper; whereupon the said Comptroller and the said receiver shall, by virtue of this act, be discharged and released from any and all liabilities to such association, and to each and all of the creditors and shareholders thereof; and such agent is hereby authorized to sell, compromise, or compound the debts due to such association upon the order of a competent court of record or of the United States circuit court for the district where the business of the association was carried on. Such agent shall hold, control, and dispose of the assets and property of any association which he may receive as hereinbefore provided for the benefit of the shareholders of such association as they, or a majority of them in value or number of shares, may direct, distributing such assets and property among such shareholders in proportion to the shares held by each; and he may, in his own name or in the name of such association, sue and be sued, and do all other lawful acts and things necessary to finally settle and distribute the assets and property in his hands. In selecting an agent Transfer of assets of bank to agent of the shareholder. 11 241 HAND-BOOK OF FINANCE. as hereinbefore provided, administrators or executors of deceased shareholders may act and sign as the decedent might have done if living, and guardians may so act and sign for their ward or wards. Notice bv (SEc. 5235.) The Comptroller shall, upon appointing Comptroller tocrcditors. a receiver, cause notice to be given, by advertisement in such newspapers as he may direct, for three consecu tive months, calling on all persons who may have claims against such association to present the same, and to make legal proof thereof. Dividends (SEC. 5236.) From time to time, after full provision by Ctomp- has been first made for refunding to the United States troller to creditors. any deficiency in redeeming the notes of such association, Bank of Bethel vs. the Comptroller shall make a ratable dividend of the Pahquinque money so paid over to him by such receiver on all such Bank, 14 Wall. 383. claims as may have been proved to his satisfaction or adjudicated in a court of competent jurisdiction, anrd, as the proceeds of the assets of such association are paid over to him, shall make further dividends on all claims previously proved or adjudicated; and the remainder of the proceeds, if any, shall be paid over to the shareholders of such association, or their legal repre sentatives, in proportion to the stock by them respectively held. Injunction (SEC. 5237.) Whenever an association against which upon rpceiver- proceedings have been instituted, on account of any alreceivership. leged refusal to redeem its circulating notes as afore said, denies having failed to do so, it may, at any time within ten days after it has been notified of the appoint ment of an agent, as provided in section fifty-two hun dred and twenty-seven, apply to the nearest circuit, or district, or territorial court of the United States to enjoin further proceedings in the premises; and such court, after citing the Comptroller of the Currency to show cause why further proceedings should not be enjoined, and after the decision of the court or finding of a jury that such asso ciation has not refused to redeem its circulating notes, when legally presented, in the lawful money of the United States, shall make an order enjoining the Comp troller, and any receiver acting under his direction, from all further proceedings on account of such alleged refusal. 242 i NATIONAL BANKS AND BANK CURRENCY. 243 (SEC. 5238.) All fees for protesting the notes issued Fees and by any national banking association shall be paid by the expenses of protest and person procuring the protest to be made, and such asso- receiverciation shall be liable therefor; but no part of the bonds ship. deposited by such association shall be applied to the payment of such fees. All expenses of any preliminary or other examinations into the condition of any association shall be paid by such association. All expenses of any receivership shall be paid out of the assets of such association before distribution of the proceeds thereof. (SEc. 5239.) If the directors of any national banking Penalty for violation of association shall knowingly violate, or knowingly permit provisions any of the officers, agents or sewrvants of the association of this Title. to violate any of the provisions of this Title, all the rights, privileges and franchises of the association shall be thereby forfeited. Such violation shall, however, be Violation, how deterdetermined and adjudged by a proper circuit, district or mhined.eter territorial court of the United States, in a suit brought for that purpose by the Comptroller of the Currency, in his own name, before the association shall be declared dissolved. And in cases of such violation, every director Liability of directors who participated in or assented to the same shall be for dio-ctr held liable in his personal and individual capacity for all lation. damages which the association, its shareholders, or any other person. shall have sustained in consequence of such violation. (SEC. 5242.) All transfers of the notes, bonds, bills of Transfers, assi,gne x c h a n g e, or other evidences of debt owing t o a ny na- ments, etc., tional banking association, or of deposits to its credit; after an act of all assignments of mortgages, sureties on real estate, or insolvency, of judgments or decrees in its favor; all deposits of void. money, bullion, or other valuable thing for its use, or for the use of any of its shareholders or creditors; and all payments of money to either, made after the commission of an act of insolvency, or in contemplation thereof, made with a view to prevent the application of its assets in the manner prescribed by this chapter, or with a view to the preference of one creditor to another, except in payment of its circulating notes, shall be utterly null and void. HAND-BOOK OF FINANCE. No attachment, injunction, or execution, shall be issued against such association or its property before final judgment in any suit, action, or proceeding, in any State, county, or municipal court. Attachment not to issue before final judgqment in State court. CHAPTER V. TAX ON CIRCULATION NOT AUTHORIZED BY CONGRESS. (Sec. 3410.) The capital of any State bank or banking association which has ceased or shall cease to exist, or which has been or shall be converted into a national bank, shall be assumed to be the capital as it existed immediately before such bank ceased to exist or was converted as aforesaid. (SEC. 3411.) Whenever the outstanding circulation of any bank, association, corporation, company, or person is reduced to an amount not exceeding five per centum of the chartered or declared capital existing at the time the same was issued, said circulation shall be free from taxation; and whenever any bank which has ceased to issue notes for circulation, deposits in the Treasury of the United States, in lawful money, the amount of its outstanding circulation, to be redeemed at par, under such regulations as the Secretary of the Treasury shall prescribe, it shall be exempt from any tax upon such circulation. (SEC. 3412.) Every national banking association, State bank, or State banking association, shall pay a tax of ten per centum on the amount of notes of any person, or of any State bank or State banking association, used for circulation and paid out by them. (SEC. 3413.) Every national banking association, State bank, or banker, or association, shall pay a tax of ten per centum on the amount of notes of any town, city, or municipal corporation, paid out by them. (SEC. 3414.) A true and complete return of the monthly amount of circulation, of deposits, and of capital, as aforesaid, and of the monthly amount of notes of persons, town, city, or municipal corporation, State Capital of State bank converted into national association. Circulation, when exempted from tax. Tax on notes of persons or State banks, used for circulation. See act of Feb. 8, 1875. Tax on notes of towns, cities, etc., used for circulation. Ibid. Monthly returns of notes of persons, cities, 244 NATIONAL BANES AIND BANX CURRENCY. 245 banks, or State banking associations paid out as afore- State said for the previous six months, shall be made and banks, etc., paid out. rendered in duplicate on the first day of December and %d. the first day of June, by each of such banks, associations, corporations, companies, or persons, with a declaration annexed thereto, under the oath of such person, or of the president or cashier of such bank, association, corporation, or company, in such form and manner as may be prescribed by the Commissioner of Internal Revenue, that the same contains a true and faithful statement of the amounts subject to tax, as aforesaid; and one copy shall be transmitted to the collector of the district in which any such bank, association, corporation, or company is situated, or in which such person has his place of business, and one copy to the Commissioner of Internal Revenue. (SEc. 3415.) In default of the returns provided in In default the preceding section, the amount of circulation, deposit, of returns, Commis3capital, and notes of persons, town, city, and municipal sioner to corporations, State banks, and State banking associations stiate. paid out, as aforesaid, shall be estimated by the Commissioner of Internal Revenue, upon the best information he can obtain. And for any refusal or neglect to make return and payment, any such bank, association, corporation, company, or person so in default shall pay a penalty of two hundred dollars, besides the additional penalty and forfeitures provided in other cases. (SEC. 3416.)'Whenever any State bank or banking National association has been converted into a national banking bank to make association, and such national banking association has return and payment of assumed the liabilities of such State bank or banking tax of ~ converted association, including the redemption of its bills, by any cstate bank. agreement or understanding whatever with the representatives of such State bank or banking association, such national banking association shall be held to make the required return and payment on the circulation outstanding, so long as such circulation shall exceed five per centum of the capital before such conversion of such State bank or banking association. (SEc. 3417.) The provisions of this chapter, relating Provisions for tax on to the tax on the deposits, capital, and circulation of deposits, HAND-BOOK OF FINANCE. banks, and to their returns, except as contained in sections thirty-four hundred and ten, thirty-four hundred and eleven, thirty-four hundred and twelve, thirty-four hundred and thirteen, and thirty-four hundred and sixteen, and such parts of sections thirty-four hundred and fourteen and thirty-four hundred and fifteen as relate to the tax of ten per centum on certain notes, shall not apply to associations which are taxed under and by virtue of Title " NATIONAL BANKS." (SEC. 3701.) All stocks, bonds, treasury notes, and other obligations of the United States, shall be exempt from taxation by or under State or municipal or local authority. capital and circulation, not to apply to national banks. Act of Feb. 18, 1875, correcting Rev. Stat. United States securities exempt from local taxation. Bank vs. Supervisolrs, 7 Wall. 26. Tax oil bank checks. Act of Feb. 8, 1875, sec. 15. STAMP-TAX ON BANK-CHECKS. (SEC. 3418.) There shall be levied, collected, and paid for and in respect of every bank-check, draft, or order for the payment of money, drawn upon any bank, banker, or trust company, at sight or on demand, by any person who makes, signs, or issues the same, or for whose use or benefit the same is made, signed, or issued, two cents. (SEC. 3420.) All bank-checks, drafts, or orders, as aforesaid, issued by the officers of the United States Government, or by officers of any State, county, town, or other municipal corporation, are exempt from taxation: Provided, That it is the intent hereby to exempt from liability to taxation such State, county, town, or other municipal corporations in the exercise only of functions strictly belonging to them in their ordinary governmental and municipal capacity. (SEC. 3421.) No bank-check, draft, or order, required by law to be stamped, which is issued without being dailly stamped, nor any copy thereof, shall be admitted or used in evidence in any court until a legal stamp, denoting the amount of tax, is affixed thereto, as pre Official checks exempt from tax. Unstamped checks not admissible in evidence. scribed by law. (SEC. 3422.) Any person or persons who shall make, s ign, or issue, or who shall cause to be made, signed, or issued, any instrument, document, or paper of any kind or description whatsoever, or shall accept, nego Penalty for failure to stamp checks. 246 NATIONAL BANKS AND BANK CUR1RENCY. 247 tiate, or pay, or cause to be accepted, negotiated, or paid, any draft, or order, for the payment of money, without the same being duly stamped, or having thereupon an adhesive stamp for denoting the tax chargeable thereon, and canceled in the manner required by law, with intent to evade the provisions of this Title, shall, for every such offense, forfeit the sum of fifty dollars, and such instrument, document or paper, draft, [or] order, not being stamped according to law, shall be deemed invalid and of no effect: Provided, That hereafter, in all cases where the party has not affixed to any instrument the stamp required by law thereon, at the time of making or issuing the said instrument, and he or they, or any party having an interest therein, shall be subsequently desirous of affixing such stamp to said instrument, or if said instrument be lost, to a copy thereof, he or they shall appear before the collector of the revenue of the proper district, who shall, upon the payment of the price of the proper stamp required by law, and of a penalty of double the amount of tax remaining unpaid, but in no case less than five dollars, and where the whole amount of the tax denoted by the stamp required shall exceed the sum of fifty dollars, on payment also of interest, at the rate of six per centum on said tax from the day on which such stamp ought to have been affixed, affix the proper stamp to such instrument or copy, and note upon the margin thereof the date of his so doing, and the fact that such penalty has been paid; and the same shall thereupon be deemed and held to be as valid, to all intents and purposes, as if stamped when made or Stamp may be subsequently afirxed by collector. issued.... (SEC. 3423.) In all cases where an adhesive stamp is Stampsto used for denoting any tax imposed under this chapter, be canceled. except as hereinafter provided, the person using or affixing the same shall write thereon the initials of his name and the date on which such stamp is attached or used, so that it may not again be used. And every person who Penalty fraudulently makes use of an adhesive stamp to denote for fraudu lent use. any tax imposed by this chapter without so effectually canceling and obliterating such stamp, except as before mentioned, shall forfeit the sum of fifty dollars.. HAND-BOOK OF FINANCE. Method of (SEC. 3424.) The Commissioner of Internal Revenue is cancellation. authorized to prescribe such method for the cancellation of stamps as substitute for, or in addition to the method prescribed in this chapter, as he may deem expedient and effectual..,, CHAPTER VII. CRIMES AND MISDEMEANORS. (SEC. 5187.) No officer acting under the provisions of this Title shall countersign or deliver to any association, or to any other company or person, any circulating notes contemplated by this Title, except in accordance with the true intent and meaning of its provisions. Every officer who violates this section shall be deemed guilty of a high misdemeanor, and shall be fined not more than double the amount so countersigned and delivered, and imprisoned not less than one year and not more than fifteen years. (SEC. 5188.) It shall not be lawful to design, engrave, print, or in any manner make or execute, or to utter, issue, distribute, circulate, or use, any business or professional card, notice, placard, circular, hand-bill, or advertisement, in the likeness or similitude of any circulating note or other obligation or security of any banking association organized or acting under the laws of the United States which has been or may be issued under this Title or any act of Congress, or to write, print, or otherwise impress upon any such note, obligation or security any business or professional card, nbtice or advertisement, or any notice or advertisement of any matter or thing whatever. Every person who violates this section shall be liable to a penalty of one hundred dollars, recoverable one-half to the use of the informer. (SEC. 5189.) Every person who mutilates, cuts, defaces, disfigures, or perforates with holes, or unites or cements together, or does any other thing to any bankbill, draft, note, or other evidence of debt, issued by any national banking association, or who causes or procures Penalty for unlawfully coantersigning or (lelivering circuilating notes. Penalty for imitating ng.tionalbank notes, etc. 248 Penaltv for mutilating nationalbank notes, etc. NATIONAL BANKS AND) BANXK CUlRRENCY. 249 the same to be done, with intent to render such bankbill, draft, note, or other evidence of debt unfit to be reissued by said association, shall be liable to a penalty of fifty dollars, recoverable by the association. (SEc. 5207.) No association shall hereafter offer or re- Penalty for offering ceive United States notes or national-bank notes as secur- for recffe.riing ity or as collateral security for any loan of money, or for United States or a consideration agree to withhold the same from use, or nationaloffer or receive the custody or promise of custody of such bank notes as security notes as security, or as collateral security, or consideration for loan,etc. for any loan of money. Any association offending against the provisions of this section shall be deemed guilty of a misdemeanor, and shall be fined not more than one thousand dollars and a further sum equal to one third of the money so loaned. The officer or officers of any association who shall make any such loan shall be liable for a further sum equal to one quarter of the money loaned; and any fine or penalty incurred by a violation of this section shall be recoverable for the benefit of the party bringing such suit. (SEC. 5209.) Every president, director, cashier, teller, Penalty for embezclerk, or agent of any association, who embezzles. ab- zlement. stracts, or willfully misapplies any of the moneys, funds, or credits of the association; or who, without authority from the directors, issues or puts in circulation any of the notes of the association; or who, without such authority, issues or puts forth any certificate of deposit, draws any order or bill of exchange, makes any acceptance, assigns any note, bond, draft, bill of exchange, mortgage, judgment, or decree; or who makes any false entry in any book, report, or statement, of the association, with intent, in either case, to injure or defraud the association or any other company, body politic or corporate, or anyindividual person, or to deceive any officer of the association, or any agent appointed to examine the affairs of any such association; and every person who with like intent aids or abets any officer, clerk, or agent in any violation of this section, shall be deemed guilty of a misdemeanor, and shall be imprisoned not less than five years nor more than ten. EHAND-BOOK OF FINANCE. Obligations (SEC. 5413.) The words "obligation or other security or other securities of the United States" shall be held to mean all bonds, of the certificates of indebtedness, national-bank currency, couUnited States pons, United States notes, treasury notes, fractional defined. Act of notes, certificates of deposit, bills, checks or drafts for Feb. 1o8,r money, drawn by or upon authorized officers of the 1875. correcting United States, stamps and other representatives of value, Rev. Stat. of whatever denomination, which have been or may [be] issued under any act of Congress. Penalty (SEc. 5415.) Every person who falsely makes, forges, for counterfeiting na- or counterfeits, or causes or procures to be made, forged tional-bank or counterfeited, or willingly aids or assists in falsely notes. making, forging, or counterfeiting, any note in imitation of, or purporting to be in imitation of, the circulating notes, issued by any banking association now or hereafter authorized and acting under the laws of the United States; or who passes, utters, or publishes, or attempts to pass, utter, or publish, any false, forged, or counter feited note, purporting to be issued by any such association doing abanking business, knowing the same to be falsely made, forged, or counterfeited, or who falsely alters, or causes or procures to be falsely altered, or willingly aids or assists in falsely altering any such circulating notes, or passes, utters, or publishes, or attempts to pass, utter, or publish as true, any falsely altered or spurious circulating note issued, or purporting to have been issued, by any such banking association, knowing the same to be falsely altered or spurious, shall be imprisoned at hard labor not less than five years nor more than fifteen years, and fined not more than one thousand dollars. Penalty for (SEC. 5430.) Every person having control, custody, or using plates possession of any plate, or any part thereof, from which to print t porint has been printed, or which may be prepared by direction notes without of the Secretary of the Treasury for the purpose of printauthority. authorty. ing, any obligation or other security of the United States, who uses such plate, or knowingly suffers the same to be used for the purpose of printing any such or similar obli gation, or other security, or any part thereof, except as may be printed for the use of the United States by order Engravin'g of the proper officer thereof; and every person who enfalse plate. graves, or causes or procures to be engraved, or assists in 250 NATIONAL BANKS AND BANK CURRENCY. 251 engraving, any plate in the likeness of any plate designed for the printing of such obligation or other security, or who sells any such plate, or who brings into the United States from any foreign place any such plate, except under the direction of the Secretary of the Treasury or other proper officer, or with any other intent, in either case, than that such plate be used for the printing f the obligations or other securities of the United States; or who has in his control, custody, or possession any metal- Having in possession lic plate engraved after the similitude of any plate from false plate. which any such obligation or other security has been printed, with intent to use such plate, or suffer the same to be used in forging or counterfeiting any such obligation or other security, or any part thereof; or who has in Havingin possession his possession or custody, except under authority from spurious the Secretary of the Treasury or other proper officer, any nationalobligation or other security, engraved an d printed after bank notes. the similitude of any obligation or other security issued under the authority of the United States with intent to sel l or otherwise use the same; and every person who Printing or p r i n t s, photographs, or in any other manner makes or grphotingo graphing executes, or causes to be printed, photographed, made, notes, etc. or executed, or aids in printing, photographing, making, or executing any engraving, photograph, print, or impression in the likeness of any such obligation or other security, or any part thereof, or who sells any such engraving, photograph, print, or impression, except to the United States, or who brings into the United States Bringing from any foreign place any such engraving, photograph, into the United print or impression, except by direction of some proper States photoofficer of the United States, or who has or retains in his graphed control or possession, after a distinctive paper has been notes, etc. Having in adopted by the Secretary of the Treasury fox the obliga- possession distinctive tions and other securities of the United States, any similar bank-note paper adapted to the making of any such obligation or paper. other security, except under the authority of the Secretary of the Treasury or some other proper officer of the United States, shall be punished by a fine of not more than five thousand dollars, or by imprisonment at hard labor not more than fifteen years, or by both. IlAND-13OOK OF FINANCE. (SEC. 5431.) Every person who, with intent to defraud, passes, utters, publishes, or sells, or attempts to pass, utter, publish, or sell, or brings into the United States with intent to pass, publish, utter, or sell, or keeps in possession or conceals with like intent any falsely made, forged, counterfeited, or altered obligation, or other security of the United States, shall be punished by a fine of not more than five thousand dollars, and by imprisonment at hard labor not more than fifteen years. (SEC. 5432.) Every person who, without authority from the United States, takes, procures, or makes, upon lead, foil, wax, plaster, paper, or any other substance or material, an impression, stamp, or imprint of, from, or by the use of any bed-plate, bed-piece, die, roll, plate, seal, type, or other tool, implement, instrument, or thing used or fitted or intended to be used, in printing, stamping, or impressing, or in making other tools. implements, instruments, or things, to be used, or fitted or intended to be used, in printing, stamping, or impressing any kind or description of obligation or other security of the United States, now authorized or hereafter to be authorized by the United States, or circulating note or evidence of debt of any banking association under the laws thereof, shall be punished by imprisonment at hard labor not more than-ten years. or by a fine of not more than five thousand dollars, or both. (SEC. 5433.) Every person who, with intent to defraud, has in his possession, keeping, custody or control, without authority from the United States, any imprint, stamp, or impression, taken or made upon any substance or material whatsoever, of any tool, implement, instrument, or thing, used, or fitted or intended to be used, for any of the purposes mentioned in the preceding section; or who, with intent to defraud, sells, gives or delivers any such imprint, stamp, or impression to any other person, shall be punished by imprisonment at hard labor not more than ten years, or by a fine of not more than five thousand dollars. (SEC. 5434.) Every person who buys, sells, exchanges, transfers, receives, or delivers, any false, forged, counterfeited, or altered obligation or other security of the Penal ty f-,r passing, selling,etc., counterfeit or altered notes. Penalty for taking impre,sion o. tools, implements, etc. Penaltv for having ill possession Impression of tools, implements, etc. Penalty for buying, selling or dealing in 252 NATIONAL BANKS AND BANK CURRENCY. 253 United States, or circulating note of any banking associ- forged or altered ation organized or acting under the laws thereof, which notes. has been or may hereafter be issued by virtue of any act of Congress, with the intent that the same be passed, published, or used as true and genuine, shall be imprisoned at hard labor not more than ten years, or fined not more than five thousand dollars, or both. (SEC. 5437.) In all cases where the charter of any cor- Penalty for poration which has been or may be created by act of putti afully poration ~~~~~~~~~~~~~~~~puittinig in Congress has expired or may hereafter expire, if any circulation the notes, director, officer, or agent of the corporation, or any drafts, etc., of closed trustee thereof, or any agent of such trustee, or any per- associason having in his possession or under his control the tions. property of the corporation for the purpose of paying or redeeming its notes and obligations, knowingly issues, re-issues, or utters as money, or in any other way knowingly puts in circulation any bill, note, check, draft, or other security purporting to have been made by any such corporation whose charter has expired, or by any officer thereof, or purporting to have been made under authority derived therefrom, or if any person knowingly aids in any such act, he shall be punished by a fine of not more than ten thousand dollars, or by imprisonment not less than one year nor more than five years, or by both such fine and imprisonment. But nothing herein shall be Persons not officers or construed to make it unlawful for any person, not being affigents of such director, officer, or agent of the corporation, or any closed asso ciations trustee thereof, or any agent of such trustee, or any per- may son having in his possession or under his control the the noate,f property of the corporation for the purpose hereinbefore such as-,(t)-i. elationts. set forth, who has received or may hereafter receive such bill, note, check, draft, or other security, bona fide and in the ordinary transactions of business, to utter as money or otherwise circulate the same. HAND)-BOOK OF FINANCE. THE INTEREST LAWS OF THE STATES. [Compiled from the Banker's Almanac and Register for 1875.] See page 225 for penalty for usury by national banks. Rate per? cent. State. Legal. Special. 8.. -.. Loss of interest. 10.. ~.. None. 6.. ~.. None. 10.. ~.. None. 10.. ~.. None. 7.. ~.. Forfeiture of all interest. 7.. 18.. Forfeiture of contract. 6.. 6.. Forfeiture of contract. 6.. 10.. Forfeiture of all interest. 8.. ~.. None. 7.. 7.. None. 1 Alabama......... 2 Arizona..... None 3 Arkansas........ 4 California........ 5 Colorado......... 6 Connecticut...... 7 Dacotah.......... 8 Delaware........ 9 Dist. of Columbia. 10 Florida.......... 11 Georgia......... 12 Idaho........... *10.. 24.. $300, or imprison't 6 mos. or both. 10.. Forfeiture of all the interest. 10.. Forfeiture of interest and costs. 10.. Forfeiture of excess. 12.. Forfeiture of excess over 12 per ct. 10.. Forfeiture of all the interest. 8.. Forfeiture of interest. ~.. Forfeiture of excess. 6.. Forfeiture of excess. ~.. None. (6 per cent on judgments.) 10.. Forfeiture of excess. 12.. Forfeiture of excess over 7 per cent. ~.. None. 10.. Forfeiture of all interest. —.. None. 12.. Forfeiture of all interest, and costs. ~.. None. 6.. Forf. of 3 times the interest rec'd. 7.. Forfeiture of all interest. 12.. None. 7.. Forfeiture of contract. 8.. Forfeiture of interest. 13 Illinois........... 14 Indiana.......... 15 Iowa........... 16 Kansas.......... 17 Kentucky........ 18 Louisiana........ 19 Maine........... 20 Maryland........ 21 Massachusetts.... 22 Michigan........ 23 Minnesota........ 24 Mississippi....... 25 Missouri......... 26 Montana......... 27 Nebraska........ 28 Nevada.......... 29 New Hampshire.. 30 New Jersey...... 31 New Mexico...... 32 New York....... 33 North Carolina... 254 Penalty of Ubury. 6.. 6.. 6.. 7.. 6.. 5.. 6.. 6.. 6.. 7.. 7.. 6.. 6.. 10.. 10.. 10. 6.. 7.. 6.. *7. - 6.. THE INTEREST LAWS OF THE STATES. Rate per cent. State. Legal. Special. Penalty of Usury. 34 Ohio............ 6.. 8.. Forfeiture of excess. 35 Oregon.......... 10.. 12.. Forif. of inter't, principal and costs. 36 Pennsylvania..... 6.... Forf. of excess. Act Iay 28,1858. 37. Rhode I d.. t6... ~. - Forfeiture, unless a greater rate is 3Rhode Island.-. t. -. *- * contracted. 38 South Carolina... 7.... None. 39 T e nse...6.. 10.t. Forfeiture of excess over 6 per cent, 9Tennessee -... 6. - - * - and $100 fine. 40 Texas............ 8.. ~.. None. 41 Utah........... 10.. ~.. None. 42 Vermont.........6.. t7.. Forfeiture of excess. 43 Virginia......... 6.. 12.. Forfeiture of contract. 44 Washington Terr 10.. ~.. None. 45 West Virginia.... 6.. 6.. Forfeiture of excess. 46 Wisconsin........7.. 10.. Forfeiture of all the interest. 47 Wyoming........ 10.. 1.. None. * Usurers liable to arrest for misdemineanor.: On railroad bonds only. t Rate on judgments unless otherwise expressed. ~ No limit. 255 TABLE No. 1.-NATIONAL BANKS IN THE UNITED) STATES IN Capital. No. of Banks. 1863.................................. 1864.................................. 1865.................................. 1866.................................. 1867................................. 1868.................................. 1869.................................. 1870.................................. 1871.................................. 1872.................................. 1873.................................. 1874.................................. 1875.................................. 1876 (March).......................... For comparison with the above amounts the following summary of the cond: about January 1, 1857, is taken from the annual report of Hon. Howell Cobb, No. of Banks. Capital. 133.................................................... $370,834,686 Surpluk 66 5O8 1513 1644 1642 1644 1617 1615 1767 1919 1973 2004 2087 2090 $7,188,393 86,782,802 393,157,206 415,278,969 420,073,415 420,634,511 426,399,151 430,399,301 458,255,696 479,629,144 490,678,367 493,765,121 504,829,700 504,768,666 o...... 2,010,: 38,713,: 53,359,' 66,695,1 77,995,' 86,165,: 94,705,' 101,112,4 1 10,257,,' 120,314,, 128,958,: 134,356,( 133,089,( G(OLD VALUES OF U. S. NOTES. TABLE No. 2.-RELATIVE VALUES OF GOLD AND UNITED STATES NOTES. Showcing the gold ialue of United States notes wvith gold at any price not exceeding 285 * in currency. PPre- Gold Pre- Gold Pre- Gold mium Value mium Value miutm Value on Legal on Legal o on Legal Gold. T'rs. Gold. T'rs. Gold. T'rs. 75.....57~/ 112.....47~/ 149.....401~ 7 6.....563/4 113.....47 150.....40 77.....56~ 114.....46/4 151.....39Y 78.....56~ 115.... 46~ 152.....39,2,3 79.....554 116.....464 153... 39/ ,80.....55/2 117.... 46 154.....39Y 81.....55 14 118.....45Y 155.....39 82.....55 119.....453 156.....39 83.....54% 120.....45~ 157.....38Y 84 4....54 121.....45 158..... 384 85.....54 122.....45 159.....388 86....534 123.... 44%7 160.....388 87.....53y 124.....44}/2 161.....88%4 88.....53 125.....447~ 162.....38,/ 89.....53 126.....44%4 163....38 90.....525/ 127....44 164....37% 91.....52% 128.....43% 165.....37Y/ 92.....52 129....43% 166....37 93 5 1 3.....514 130....43~ 167.....37 94.....51y 131.....43fi 168.....37ffi 95.....51%y 132.....43 169.....378 96.....51 133.....42% 170.....37 97....504 134.....42~fi 171.....36 98.....50Y 135.....42~1172.....36/3 .'99....50% 136.....421 173.....36% 100.....50 137.....421/ 174.....36/~ 101.....49/4 138.....42 175.....36y 102.....49%d 139.... 41Y 176.....36, 103.....49%4 140.....41% 177.....368. 104.....49 141.....41y/ 178.....36 105.....48Y4 142....411/ 179.....35f/fi 1106.....48~ 143...41~ 180....354 1'07.....48%1 144.....41 181..... 35% 108.....48 145.....40% 182.....35~/ 109....47Y 146.... 40% 183.....35} 110.....47/, 147.-....40~ 184.....36 111.....473 148...40,~1185..... 35 * According to the officially-published quotations of the gold market in New York, the currency price of $100 gold reached its maximum on the 11th day of July, 1864, the quotations for that day ranging from $276 to $285. The average price of $100 gold for the month of July, 1864, wvas $258.10, and the average price of $100 gold for the quarter-year ending September 30, 1864, was $244.90. 11* 257 Pre- Gold Pre- Gold mium Value mium Value on Legal on Legal Gold. T'rs.!Gold. T'rs. 1......99 38...... 721,2 2......98,39...... 72 3......97 40...... 71~4 4......96 i41...... 71 5......95 9.:42...... 70o~ 6......94!43...... 70 7.....933.i44......692 8......92.60 9......91 46..... 68Y 1l. 91 147...... 68 11......901 148.....667~/ 12......89~/4!49......6718 13......88250......66G/, 14......87Y,51...... 66a3 15......87,i52...... 65 16......86,J 53...... 65Y 17......851/ 54......65 18.....84/3 55...... 64~4 19......84 i56...... 64 20.....831~ 57...... 63P. 21...... 82%58......631Y 22....82 i59...... 628 23......81 Y/ 60...... 62Y2 24. 8 0% 61......62Y, 2."5......80 62....61l/4 26......79Y163......61 27......78,34/164...... 61 28...... 65.60'Y 29...77? 66...... 600. 30......77 167...... 59 31...... 76/3!68...... 5/2 32....75Y,69...... 591~ 33 751/@ 7......58. 34......74Yi71...... 58~/2 35...... 74y!72... 58Y8 36...... 73Y273...... 57 37......73 174...... 5732 TABLE No. 3. Showting ciurrenicy price in dollars of one hiundred dlollars in gold in the Neiv Yo years, half-years, calendar yiears and fiscal years, from January 1, 1862, to AI 1867. 1868. 1869. 1 134. 6,138. 5135. 6 137.4 141.4 134.4 135 139.5 t1.31 135.6 138.7 132.9 137 139.6 139.2 137.5 140.1 138.1 139.4 142.7 136.1 140.81145.5 134.2 143.4,143.6 136.8 143.5 137.1 130.2 139.6 134.4 126.2 134.8 135.2 121.5 135.7 139.8 133.8 136.7 139.5 136.7 141.21143.9 135.7 139.3 135.6 126 136.24il39.6 1:35.31 140.3 139.8 130.8 138.2t139.7 133 141 j139.9 137.5 Periods. January................ February............... March.................. April................... May.................... June................... July.................... August................. September.............. October................ November.............. December............... First quarter-year....... Second quarter-year..... Third quarter-year....... Fourth quarter-year..... First half-year.......... Second half-year........ Calendar year........... Fiscal year ended June 30. FiscalyearendedJune30.......137.1 156.21201.91140.4141 139.9137.5123. I 1862. 102.5 103.5 101.8 101.5 103.3 106.5 115.5 114.5 118.5 128.5 131.1 132.3 102.6 103.8 116.2 130.6 103.2 123.4 ;13.3 1863. 145.1 160.5 154.5 151.5 148.9 144.5 130.6 125.8 134.2 147.7 148.0 151.1 153.4 148.3 130.2 148.9 150.8 139.6 145.2 137.1 1864. 1865. 155.5 216.2 158.6 205.5 162.9 173.8 172.7 148.5 176.3 135.6 210.7 140.1 258.1 142.1 254.1 143.5 222.5,143.9 207.21145.5 233.5 147 227.5 146.2 159 198.5 186.6 141.4 244.9 143.2 222.7 146.2 172.8 169.9 233.8 144.7 203.3 157.3 156.21201.9 1866. 140.1 138.4 130.5 127.3 131.8 148.7 151.6 148.7 145.5 148.3 143.8 136.7 136.3 135.9 148.6 142.9 136.1 145.8 140.9 140.4 1870 121. 119. 112. 113. .14. 112. 116. 117. 114. 112. 111. 110. 117. 113. 116. 111. 115, 114 114, 123. VALUES OF FOREIGN COINS. TABLES Nos. 4 AND 5. EXHIBITING THE VALUES, IN UNITED STATES MONEY OF ACCOUNT, OF THE PURE GOLD OR SILVER REPRESENTING, RESPECTIVELY, THE MONETARY UNITS OF FOREIGN COUNTRIES, AND THE VALUE OF THE STANDARD COINS IN CIRCULATION OF THE VARIOUS NATIONS OF THE WORLD, JANUAERY 1, 1874. TREASURY DEPARTMENT, WASHINGTON, D. C., January 1, 1874. The first section of the act of March 3, 1873, provides "that the value of foreign coin, as expressed in the money of account of the United States, shall be that of the pure metal of such coin of standard value," and that "the values of the standard coins in circulation of the various nations of the world shall be estimated annually by the Director of the Mint, and be proclaimed on the first day of January by the Secretary of the Treasury." The following tables have been prepared and are published in compliance with the above stated provisions of law: TABLE 4.- Valutes, in United States money of account, of the pure gold or silver representing the monetary units, respectiviely, of foreign couit?tries. Value in Country. Monetary unit. Standard. U. ofS. money of account. Argentine Republic Peso fuerte........... Gold......... $1.00.00 Austria........... Florin...............Silver.........47.60 Belgium.......... Franc................Gold and silver.19.30 Bolivia........... Dollar............... Silver.........96.50 Brazil......Millreis of 1,000 reis.. Gold..........54.56 Brit'h Possessions Dollar...............Gld in N Ameica.~...............Gold......... 1.00.0O) in N. America. Central America... Dollar...............Silver.........96.50 Chili.............. Peso...............Gold..........91.23 China.............Tael............... Pure silver.... 1.61.00 Cuba............. Peso.................Gold..........92.58 Denmark........ Crown............. Gold..........26.80 Ecuador......... Dollar.............Silver..........96.50 Egypt........... Dollar of 20 piasters.. Silver........ 1.00.39 France.......... Franc................ Gold and silver.19.30 Great Britain.....Pound sterling........ Gold.........4.86 65 Greece.......... Drachma..............Silver.........19.30 German Empire... Mark.............. Gold..........23.82 Hayti......... Dollar............... Silver........ 1.00.00 259 HAND-BOOK OF FINANCE. Value in U. S. money of account. 4.86.65 .99.70 .45.84 .19.30 1.00.o0 1.04.75 .40.50 .26.80 1.00.00 .96.50 .92.58 1.C8.47 .77.17 1.00.00 .19.30 .26.80 .19.30 .87.09 .12.50 .04.39 .96.50 .94.98 .77.73 Monetary Unit. Pound sterling........ Yen................. Rupee of 16 annas.... Lira................. Dollar............... Dollar............... Florin............... Crown............... Peso................. Dollar............... Peso................. Millreis of 1,000 reis.... R oubles of 100 copecks Dollar.............. Peseta of 100 centimes G Crown............... Franc................ Mahbub of 20 piasters. Piaster of 16 caroubs.... Pia,ster............... Peso................. Patacon............. Peso................. NOTE.-Where silver is the legal standard and represents the unit of account, its value is reduced to the basis of gold, on the assumption that the ratio of 15X to 1 represents the relative values of silver and gold. TABLE 5.-TVeight, fineness and value of foreign coins, as determined by United States mnint assays. EXPLANATORY REMARKS. 1. The weight is expressed in fractions of an ounce troy, agreeing with the terms used in the United States mints. If it is desired to have the weight of any piece in grains, regard the thousandths of an ounce as integers, take their half, from which deduct 4 per cent of that half, and the remainder will be grains. 2. The fineness is expressed in thousandths parts, i.e., so many parts of pure gold or silver in 1,000 parts of the coin. The old carat system is generally abandoned (except for jewelry), but it may be worth while to say that 41F/3 thousandths equal one carat. 3. The valuation of gold is a direct calculation from weight and I 260 Cotintry. Sta-ndard. Jamaica.......... Japan............ Ind.............. Italy.............. Liberia........... Mexico............ Netberlands....... Norway........... Paray......... Peru............. Poi-to Rico........ Portugal.......... Russia............ Sandv,-ich Islands Spain............. Sweden.......... Switzerland - -.. .. Tripoli............ Tunis............. Turkey........... U. S. of Colombia UruguaX.......... Venezuela......... Gold......... Gold......... Silver........ Gold and silver Gold......... Silver........ Silver........ Gold......... Gold......... Silver........ Gold......... Gold......... Silver........ Gold......... Gold and silver Gold......... Gold and silver Silver........ Silver....... Gold......... Silver........ Gold......... Silver........ VALUES OF FOREIGN COINS. fineness, at the legal rate of 25.8 grains, 900 fine, being equal to $1; or $20.672 (nearly) per ounce of fine gold. Foreign coins, if converted into United States coins, will be subject to a charge of one-fifth of one per cent. 4. For the silver there is no fixed legal valuation as compared with gold. The value of the silver coins is computed at the rate of 120 cents per ounce, 900 fine, payable in subsidiary silver coin, that having been the mint price when the assays were made. The gold value of silver is to be found in the bullion markets; at present it is about 113 cents per ounce, 900 fine. 5. These tables generally give the one principal coin of each country, from which the other sizes are easily deduced. Thus, when the franc system is used, there are generally gold pieces of 40, 10, 20, and 5 francs, all in due proportion. But in silver the fractional coins are very often of less intrinsic value than the normal coin, proportionately. These are seldom exported. GOLD COINS. Denomination. Value in U. S. gold coin. Dl8. cts. ms. 9 13 2 6 75 4 I 93 5 4 72 0 10 89 4 3 68 8 0 48 8 9 13 6 15 50 3 7 90 0 4 97 4 4 86 5 4 85 6 Fourfold ducat........ Souverain (not now c'd) 4 florins (new)........ 25 francs............. 20 millreis............ C2 escudos............. 4 reals............... 10 pesos (dollars)...... Austria........ Do........ Do........ Belgium....... Brazil......... Central America Do Chili........... Colombia andt S. America, generally... Denmark...... Egypt -:........ England....... Do....... Old doubloon*........ Old 10 thaler......... Bedidlik (100 piasters). Pound or sov'gnt (new) Pound average (worn). * The doubloon (doblon, or more properly onza, though not really an ounce Spanish) is now generally discontinued. These figures answer as well for the doubloon of Peru, Chili, Bolivia, etc., and therefore this item stands for all. Popayan pieces were rather inferior. t The sovereigns coined at Melbourne and Sydney, in Australia, and distinguished only by the mint marks M and S, are the same as those of the London mint. Sovereigns generally are up to the legal fineness, 916% (or 22 carats). 261 Fineiaess. Weight. Ounce,g. 0.448' 0.363 0.104 0.254 0.575 0.209 0.027' 0.492 0.867 0.427 0.2'5 0.256.8 0.256.3 Country. loooths. 986 900 900 899 916.5 853.5 875 898 870 895 875 916.5 916.5 HAND-BOOK OF FINANCE. Value in U. S. gold coin. Dls. cts. nu. 3 84 7 7 97 1 3 44 2 7 10 5 3 84 7 3 57 6 19 94 4 15 59 3 19 64 3 19 51 5 3 99 7 9 67 5 19 21 3 5 80 7 3 97 6 4 96 4 3 86 4 5 01 5 2 23 7 1 93 5 2 99 5 4 37 0 Denomination. Fineness. 1000ths. 899 903 900 916.5 899 572 900 870 875 873 899 891.5 899 912 916 896 869.5 896 975 900 900 915 20 franc (no new issues) Old 10 thaler (Prussian) e0 drachmas.......... nohur, or 15 rupees.. 20 lire (francs)........ J. obang (obsolete)..... oew 20 yen........... IOld doubloon (average) o0 pesos (empire)...... '0 pesos (republic), new L0 guilders........... L0 pesos (dollars)...... '0 soles.............. Poroa (crown)......... i roubles............. .00 reals............ o0 reals.............. 10 escudos............ Ducat................ Carolin (10 francs)..... 25 piasters............ 100 piasters........... SILVER COINS. Value in subsidiary silver coin. Dls. cts. ms. I O0 2 1 00 5 0- 50 1 0 47 6 0 71 5 1 00 0 0 96 0 0 35 6 0 96 1 1 00 4 0 18 5 0 23 1 0 98 1 1 04 6 Denomination. Weight. 0Ounces. Old rix dollar......... 0.902 Old scudo (crown).... 0.836 Florin, before 1858.... 0.451 New florin........... 0.397 New Union dollar..... 0.596 Maria Theresadol.,1780 0.895 5 francs.............. 0.803 2 francs.............. 0.320 New dollar........... 0.801 Double millreis....... 0.820 20 cents............. 0.1500 25 cents.............. 0.187.5 Dollar................ 0.866 Old dollar............ 0.864 The last coinage of mtohurs was in 186. I I 262 Country. Weight. a France......... Germany....... Greece......... India (British) Italy.......... Jarn......... 0......... Mexico........ Do........ Do........ Netherlands - -. - New Granada Peru........... Portugal....... Russia......... Spain.......... Do.......... Do.......... Sweden........ Do........ Tunis......... Turkey........ Ounce8. 0.207 0.427 0.185 0.375 0.207 0.289 1.072 0.867 1.086 1.081 0.215 0.525 1.055 0.308 0.210 0.268 0.215 0.270.8 0.111 0.104 0.161 0.231 Fine ness. loooth,. 833 902 833 900 900 838 897 835 900 918.5 925 925 1 850 1 i i 908 Country. Austria........ Do......... Do......... Do......... Do......... Do......... Belgium....... Do........ Bolivia........ Brazil......... Canada........ Do.. Central''m'e'nca Chili........... VALUES OF FOREIGN COINS. Value in subsidiary silver coin. Dls. cts. mns. 0 961 2 1 04 0 0 10 5 1 08 4 0 04 0 0 22 5 0 21 9 0 96 0 0 35 6 0 71 2 0 71 4 0 40 8 0 96 5 0 86 3 0 45 7 0 96 0 0 17 8 0 33 1 1 04 0 0 42 8 1 04 0 1 03 6 1 Ot 2 1 08 4 0 96 0 1 04 3 0 92 8 0 37 5 0 96 0 0 48 6 0 35 8 0 77 8 0 96 0. 0 17 8 0 27 3 0 35 6 0 61 2 0 85 2 Weight. nes Fne-s New dollar........... Dollar (English mint). 10 cents.............. 2 rigsdaler........... Piaster (new)........ Shilling (new)....... Shilling (average).... 5 franc (average)..... 2 franc............... Thaler (before 1857 ).. Thaler (new)......... Fiorin................ 5 marks (new)....... 5 drachmas.......... Rupee................ 5 lire.................. Lira................. Itzebu, no longer coined I yen............... 50 sen............... Dollar (average)...... Peso of Maximilian... 2/2 builders.......... Specie daler.......... Dollar of 1857........ Old dollar............ Dollar of 1858........ Half dollar of 1836-'38 Sol.................. 500 reis.............. 2 lei (francs), new.... Rouble............... 5 pesetas (dollar)..... Peseta (pistareen)..... Ricksdaler............ 2 francs.............. 5 piasters............ 20 piasters........... WM. A. RICHARDSON, Secretary of the Treasury. 263 Country. Denomination. Chili........... China.......... Do.......... Denmark....... E,,ypt......... England....... Do France......... Do......... N. Germ'n States Do Do S. German States German Empire. Greece......... Hindostan Italy........... Do.......... Japan......... Do......... Do......... Alexico......... Do......... Netherlands.... Norway........ New Grenada.. Peru........... Do.......... Do.......... Do.......... Portugal....... Romania....... Russia......... Spain..........i Do.......... Sweden........ Switzerland.... Tunis.......... Turkey........ 1000ths. 900.5 901 901 877 755 924.5 925 900 835 750 900 900 900 900 916.5 900 835 890 900 800 901 902.5 944 877 896 901 909 650 900 912 835 875 900 835 750 835 898.5 830 Ounces. 0.801 0.866 0.087 0.927 0.040 0.182.5 0.178 0.800 0.320 0.712 0.595 0.340 0.804 0.719 0. 3i 4 0.800 0.160 0.279 0.866.7 0.402 0.866 0.861 0.804 0.927 0.803 0.866 0.766 0.433 0.802 0.400 0.322 0.667 0.800 0.160 0.273 0.320 0.511 0.770 IHAND-BOOK OF FINANCE. TABLE No.6. Showing the values in United States money of the pure gold or silver representing, respectively, the monetary units and standard coins of foreign countries, January 1, 1876. TREASURY DEPARTMENT, WASHINGTON, D.C., January 1, 1876. The estimate of values contained in the following table has been made by the Director of the Mint, and is hereby proclaimed in compliance with the provisions of law. iValne in! Standard.. U. S. Standard Coins. Monley. Silver.....45.3 Florin. Gold and soilver d.19.3!5, 10 and 20 francs. Gold and.96.5 Escudo, bolivar silver*.. and bolivar. Gold......54.5 None. Gold..... i$1.00 Fl ori n.............. Franc................ Dollar............... Millreis of 1,000reis.. Dollar............... Peso................ Dollar.............. Peso................. Crown.............. Dollar.............. Pound of 100 piasters Franc................ Austria.......... Belgium......... Bolivia.......... Brazil........... Brit. Possessions in N. America. Bogot a.......... Central America. Chili............. Denmark....... Ecuador......... Egypt............ France........... Great Britain.... Greece........... German Empire. Japan........... India............ Italy............. Liberia.......... Mexico.......... Netherlands..... Norway.......... Peru............ Portugal......... Russia........... Sandwich Islands Spain............ Sweden.......... Switzerland..... Tripoli........... Tunis............ Turkey.......... United States of Columbia...... Dollar. Condor, doubloon and escudo. 10 and 20 crowns. Dollar. (ters. 5,10, 25 and 50 pias5, 10 and 20 francs. sovereign and sover eign. 5,10, 20, 50 and 100 drachmas. 5, 10 and 20 marks. 1, 2, 5, 10 and 20 yen. Gol d..... Silver.... Gold..... Gold..... Silver.... Gold..... Gold and silver.. Gold..... Gold and silver.. Gold..... Gold..... Silver.... Gold and silver.. Gold..... Silver.... Gold and silver.. Gold..... Silver.... Gold..... Silver.... Gold.... Gold and silver.. Gold..... Gold and silver.. Silver.... Silver.... Gold..... Silver.... Pound sterling....... Drachma............. Mark............... Yen.................. Rupee of 16 annas... Lira................. Dollar............... Dollar............... I.96.5 .91.8 .91.2 .26.8 .91 8 1 4.97.4 .19.3 4.86.6~ .19.3 .23.8 .99.7 .43.6 .19.3 1.00 .99.8 .38.5 .26.8 .91.8 1.08 .73.4 1.00 .19.3 .26.8 .19.3 .82.9 .11.8 .04.3 .91.8 Peso or dollar, 5, 10, 25 and 50 centavo. Flor in; 10 g uld ens, gold ($4.01.9). 10 and 20 crowns. 2, 5 and 10 millreis. 3, V and 1 rouble. Florin............... Crown............... Dollar............... Millreis of 1,000 reis.. Rouble of 100 copecks Dollar............... Peseta of 100 centimes Crown............... Franc................ Mahbub of 20 piasters Piaster of 16 caroubs. Piaster.............. Peso................. 5, 10, 20, 50 and 100 pesetas. 10 and 20 crowns. 5, 10 and 20 francs. 25, 50, 100, 250 and 500 piasters. B. H. BRISTOW, Secretary of the Treasury. 264 Country. Monetary Unit. 5, 10, 20, 50 and 100 lire. __________ __ ~Year. ~ ~ Mess Beef, _bbl. ~ ~~ ~ ~ ~~"~ ~ ~ ~E~ ~ ~ ~ ~ ~~Mess Pork, $ bbl. I ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~,~ ~ CodFish, _~ ~ ~~~ ______ __ m ~ ~~quintal. ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~~~~~~~~~~~~~~ C 1 S'fine Flour, ______ _ ___ ~ I1'bbl. Southern Y ~ ~ ~ ~ ~m~ ~ ~ ~~-~ ~ -~ ~ Corn,fbu. m Rice, - ~ - - - - - -St. D. Coffee, Vlb. ~ ~ C Tea,' lb. ~ ~ ~ ~ ~~II~ ~ ~ ~ ~- C m Mus. Sugar, ___ c, l, 10abs. B. A.D salted Hides, lb. N. 0. mid. f'r Cotton,I lb. 74 1y ~ a 71Smyrna was'd :R CA I''og'= Wool, lb. -. I II II I i I I I CD CD O4 CD CD CD kbo I is o cnX -- - - - - Wheat, per bushel. 8 - ~ c o. c~ c co Flour, per barrel. ~, osowensc~t~o* Corn, per bushel. ~ I [C orn meal, per barrel. ocnc~ ~ ~utc ~~v0c~ I g~ ~ ~;~ ~ o g{ ~ ~ Coal, per chaldron. I Cotton middlings, per ~X~P=~~=E npound. o~ooaocrosooo { Iron pig per ton. ~00000000000~00 ~' a ~ c c cz.co,.- I u Lead, pig, per hundred :co oo~888o8oooo Ipounds. o X g 09:>.q 0@AD~ |Leather, sole, per p'nd. o Molasses. New Orleans, ____ v coeDs o b$ 8 o fc^ ~ c cpergallon. I co: ~~ ~~ zo t. e::- Molasses, foreign, per c~c~0~:cn. o co. [s Igallon. '~;: ~ ~~co _-~ IPork mess, per barrel. goooooogooocgon r~~~ ~ ______'0 OO~ ; >t g ~ g, 8 o o, Beef, mess, per barrel. -c~ ~ ~~~ - Hams, smoked, per p'd. 3 eo n c | Jb~~~Lard,perpound. o vco u ~ cz | Butter, per pound. '~'co ~ ~'=~,o cheese, per pound. CO CO CO C. to} C. C. to C. C C. O C. Rice, per hundred p'ds. c to. C. G. g | Salt, per bushel. Q Sugar, New Orleans, per pound. .,o ~D CD CD e-I oQ CD 0 g3 or C ~Dp a ~b - Cb b,GD e, 0 r u ~0 ID 9: 0 Po v ot, e n m: m.~.. ~..~~w:. Sugar, foreign, per p'd. 381-=s g 8cl a 0 I? g |Wool, per pound. 'IDKYxIa dO xOOt-a(VH d I -1 I I .:.....,...9. 1.. ............ tz ~ tO 9 90 1 tz t tt 0 It 999 14 37 50...... 23 9 37 50...... 17 9 35 00...... 27 2 12 8 34 00 4 00 18 7 27 00...... 1 6.. 8 31 00...... 16' 5 30 00 3 00 1 4 6 38 00 4 75 13 10 33 00 4 37 11 7 35 00 4 25 14 6 25 00 4 25 13 11 23 00 4 25 15 13 22 00 4 80 14 8 19 50 4 42 12 9 30 00 6 00 17 10 37 50 6 00 23 7 27 50 6 25 19 9 32 00 7 00 24 13 30 00 6 75 31 9 26 00 5 00 22 11 25 00 5 55 25 11 24 00 5 70 21 12 20 00 5 25 20 36 21 00 7 00 20 66 23 00 8 00 29 81 42 00 10 50 31 1 20 38 00 14 75 38 51 50 00 9 75 35 35 49 00 6 75 32 15 38 00 6 45 27 26 4 0 00 6 50 28 26 38 00 6 25 30 15 31 00 6 30 29 21 36 00 5 90 28 21 45 00 6 50 28 18 35 00 6 87 27 15 26 00 6 15 28 14 23 00 6 00 27 (....) are inserted no quol 5 7 9 8 7 0 1839.. 1840.. 1841.. 1842.. 1843.. 1844.. 1845.. 1846.. 1847.. 1848.. 1849.. 1850.. 1851.. 1852.. 1853.. 1854.. 1855.. 1856.. 1857.. 1858.. 1859.. 1860.. 1861.. 1862.. 1863.. 1864.. 1865. 1866.. 1867.. 1868.. 1869.. 1870.. 1871.. 1872.. 1873.. 1874.. 1875. 1876.. 1 37 1 00 1 00 1 25 87 1 00 1 00 1 27 1 00 1 20 120 124 1 18 1 03 1 30 2 00 2 35 2 12 170 1 35 1 35 1 40 140 134 158 1 53 2 55 2 30 305 2 80 200 135 1 47 168 1 85 165 1 17 1 26 8 7~ 5 8' 49, 601 4 65 4 6~ 4 6~ 5 58 5 5( 6 31 5 8 5 3' 5 0( 5 0( 57~ 7 8' 9 1' 8 2~ 6 1( 4 2( 49.I 5 25 5 2( 5 4( 58 8 O( 10 75 8 25 11 4 10 75 7 0o 560 6 25 825 9 50 6)80 525 540 90 3 87 57 3 87 50 2 87 66 3 00 57 2 56 43 2 56 56 2 50 73 4 00 78 3 87 76 3 25 70 2 93 60 2 93 64 2 93 70 3 00 68 3 81 82 3 75 1 00 425 92 4 12 73 3 25 58 3 20 76 340 88 3 75 72 3 10 66 3 00 70 3 90 1 27 5 30 1 86 7 75 90 4 25 1 15 500 1 38 6 15 106 425 109 475 76 400 76 3 65 60 3 28 78 400 93 460 74 365 750 6 50 700 8 00 5 00 5 00 5 00 5 00 6 00 550 7 00 5 50 6 50 5 00 5 00 6 50 7 00 5 90 6 50 5 00 525 5 50 5 50 4 25 8 50 8 75 9 50 13 00 800 6 50 900 750 6 50 450 500 5 25 6 00 650 32 26 26 22 27 20 25 16 19 16 29 21 24 25 23 20 34 15 28 23 28 18 26 21 29 22 27 18 29 20 27 23 24 22 48 42 80 38 34 18 36 19 53 23 32 15 50 20 50 24 50 38 1 35 53 1 00 35 65 40 70 37 60 35 70 30 65 20 48 23 60 32 71 40 ...... 37 ............ 23 00 15 75 14 0o 12 O0 13 00 9 75 9 00 7 50 825 600 10 O0 6 12 9 25 5 50 13 25 8 00 10 25 8 25 11 00 8 25 14 12 10 25 11 75 8 50 12 12 8 75 14 62 8 25 19 50 9 50 13 37 8 50 12 62 8 25 17 25 10 50 19 37 10 50 15 50 9 00 17 25 7 75 16 12 5 00 16 00 5 75 12 00 5 00 14 00 7 00 19 75 5 80 36 00 20 00 27 75 11 00 920 00 12 00 20 90 12 00 26 50 9 00 29 50 8 00 20 00 10 00 14 00 8 00 14 75 11 00 14 50 10 00 20 00 12 00 21 00 12 50 14 ..... ..... ..... ..... 5 10 6 9 9 10 8 .... .... .... .... .... .... .... .... .... .... .... ..... ..... ..... .... ..... ..... 13 Where the leaders_ ations were given in the New' POPULATION OF THE GLOBE. HE population of various countries of the globe, but particularly of the countries of Europe, is a question that is constantly coming up in connection with the amounts of the precious metals available for use as money. In regard to Asia, containing more than half the entire population of the world, there is even yet comparatively little definite information, but on the whole the knowledge of the distribution of the world's inhabitants has been greatly improved in the last quarter of a century. Twenty-five years ago the commonly accepted estimate was one thousand millions, but a recent estimate by Dr. Wagner (of which a synopsis was printed in the Bankers' Magazine for May, 1875,) places the estimate for the total at 1,391,032,000. The population of each of the countries in the period from 1874 to 1876 may be stated as in the following table, in which I have also given the populations of some of the most important countries at various previous dates to show the increase- though it is possible that a part of the apparent increase may be due to more accurate enumeration. EUROPE. Prior to 1874. Russian Empire, in Europe and Asia...................... 65.200,000 (1855) German Empire...................... France...................... 35,780,000 (1851) Austria-Hungary..................I.." Great Britain and Ireland, in cluding Gibraltar, Malta and Heligoland............... 29.293,300 (1861) Italy Monaco and San Marino 21,728,500 (18615) Spaan...................... 15,464,340 (1857) 1873-5. 87,700,000 (1875) 41,060,695 36,102,921 35,912,755 31,977,128 26,811,584 16,551,647 POPULATION OF THE GLOBE. Turkey, including Servia, Ro mania and Montenegro............. Belgium..................... 4,671,187 (1861) Portugal and Azores........................ Sweden.............................. Netherlands......................... Switzerland.......................... Denmark, with the islands of Iceland and Faroe........................ Norway............................. Greece............................... Luxemburg............................ Andorra............................. Population of Europe and European islands, and Russia in Asia...... NORTH AMERICA. Greenland........................... Canada.............................. Newfoundland....................... St. Pierre and Miquelon............... United States and Alaska..... 23,191,876 (1850) Mexico (census 1869)........................ Bermudas........................... Total North America...... SOUTH AMERICA. Venezuela................... States of Colombia........... Guiana...................... Brazil....................... Ecuador..................... Peru........................ Chili....................... Argentine Republic........... Uruguay..................... Patagonia and Fireland....... Paraguay.................... Falklandi/ Isads.. 316.500,000 1874-6. 10,500 4,000,000 (1875) 146,536 4,383 42,000,000 (1875) o,o0o,000 (1875) 12,686 56,169,000 1,400,000 2,774,000 282,300 10,000,000 1,300,000 4,500,000 2,043,000 1,812,500 400,000 24,000 1,000,000 800 00,000 uatemala......................................... 1,194,000 onduras.......................................... 351,800 ritish Honduras................................... 24,700 n Salvador...................................... 600,000 icaragua........................I................. 250,000 Csta Rica...................................165,000 mama........................................... 236,000 Total of Central America......................... 2,891,500 269 15,737,019 5,087,105 4,249,503 4,250,402 3,674,402 2,669,147 1,864,496 1,741,621 1,457,849 197,528 12,000 ........ ........ i,'6'7',iO'6 (1850) ........ ........ ........ ........ ........ ........ ........ ........ G H B Sa Ni Co p HAND-BOOK OF FINANCE. WEST INDIES. Spanish possessions, Havana, 202,488 (census 1867).... British possessions.................................. French possessions.................................. Dutch possessions.................................. Danish possessions.................................. Swedish possessions................................. Hayti............................................. San Domingo...................................... Total of West Indies............................. ASIA (EXCLUSIVE OF RUSSIA). Turkey in Asia..................................... Arabia............................................ Persia............................................. Toorkistan, Toorkomania, Khokand, Bokhara and Chiva Afghanistan, with Beluchistan and Kalfiristan........ China............................................. Japan............................................. Hindoostan, with British Possessions and Ceylon...... Burmah, Siam and Cochin-China.................... East India Islands.................................. Total of Asia and Asiatic islands.................. AUSTRALIA AND POLYNESIA. Australian Continent............................... Polynesian Islands.................................. Population of Australia, etc....................... AFRICA. Egypt............................................. Morocco........................................... Tu nis............................................. Algiers................................................ Tripoli, Barka and Fezan........................... Sahara........................................... Abyssinia.......................................... Samauli........................................... Galla-country and country east of White Nile......... Mohammedan States of Central Soudan..............8, West Soudan, Upper Guinea and Equatorial Region... South Africa....................................... Islands............................................ Population of Africa............................. 270 2,068,870 1,042,585 306,244 35,482 37,821 2,898 572,000 136,500 4,202,400 187". 13,686,315 3,700,000 5,000,000 4,556,000 5,300,000 425,392,937 33,110,503 240,112,001 25,935,082 30,465,030 787,200,000 1,674,500 2,763,500 4,438,000 8,442,000 6,000,000 2,000,000 2,414,000 .1,150,000 3,,qOO,000 3,000,000 8,000,000 15,058,000 38,800,000 89,100,000 20,285,000 5,351,000 203,300,000 PUBLISHED BY S. C. GRIGGS 6 CO., CHICAGO. ROBERT'S RULES OF ORDER, For Deliberative Assemblies.By Major H. M. Robert, Corps of Engineers, U.S.A. Pocket size, cloth, 75 cents. This book is far superior to any other parliamentary manual in the English language. It gives in the simplest form possible all the various rules or points of law or order that can arise in the deliberations of any lodge, grange, debating club, literary society, convention, or other organized body, and every rule is complete in itself, and as easily found as a word in a dictionary. Its crowning excellence is a "Table of Rules relating to Motions," on two opposite pages which contains the answers to more than two hundred questions on parliamentary law, which will be of the greatest value to every member of an assembly. "It should be studied by all who wish to become familiar with the correct usages of public meetings."-E. O. Haven, D. D., Ckancellor of Syracuse University. "It seems much better adapted to the use of societies and assemblies than either Jefferson's Manual or Cushing's."-_. M. Gregory, LL. D., late President of the Illinois Industrial University. "I shall be very glad to see your Manual brought into general use, as I am sure it must be, when its great merit and utility become generally known.-Hon. T. M. Cooley, LL. D, author of' Cooley's Blackstone,'" etc. "After carefully examining it and comparing it with several other books having the same object in view, I am free to say that it is, by far, the best of all. The ' Table of Rules' is worth the cost of the work."-Thomas Bowman, D. D., Bishop of Baltimore M. E. Conference. "This capital little manual will be found exceedingly useful by all who are concerned in the organization or management of societies of various kinds... If we mistake not, the book will displace all its predecessors, as an authority on parliamentary usages."-New York World. "I admire the plan of your work, and the simplicity and fidelity with which you have executed it. It is one of the best compendiums of Parliamentary Law that I have seen, and exceedingly valuable, not only for the matter usually embraced in such a book, but for its tables and incidental matter, which serve greatly to adapt it to common use."-Dr. D.C. Eddy, SAeaker of the Massachusetas Howie of Refirestentatives. MISHAPS OF MR. EZEKIEL PELTER.-Illustrated. 12mo, cloth.....................................................................$1.50. "So ludicrous are the vicissitudes of the much-abused Ezekiel, and so much of human nature and every-day life intermingle, that it will be read with a hearty zest for its morals, while the humor is irresistible. If you want to laugh at something new, a regular side-plitter, get this book."-The Evangelist, St. Louis. "We have read Ezekiel. We have laughed and cried over its pages. It grows in interest to the last sentence. The story is well told, and the moral so good, that we decidedly like and commend it."-Pacific Bantist, San Francisco. PUBLISH~ED BY S. C. GRIGGS & CO., CHICA GO. GETTING ON IN THE WORLD; or, Hints on Success in Life.- By WM. MATHEWS, LL.D., Professor of English Literature etc., in the University of Chicago. Beautifully printed and handsomely bound. Price, I vol.,.2mo., Cloth —--— $2 Half calf binding, gilt top ---— $3 50 The same, gilt edges ----------— 2 50 Full calf, gilt edges ----------- 5 oo CONTENTS: - Success and Failure - Good and Bad Luck- Choice of a Profession- Physical Culture-Concentration - Self-Reliance -Originality in A ims and Mthethods-A ttention to Details- Practical Talent-DecisionManner - Business Habits - Self-Advertising- The Will and the WayReserved Power- Economy of Time- Money, its Use and A buse - Mercantile Faziures - Over-Work and Under-Rest- True and False Success. "A book in the highest degree attractive, * * and which will be sure today in dollars and cents many times over the cost of the work, and the time devoted to its perusal."-Lockport yournal, New York. "It is sound, morally and mentally. It gives no one-sided view of life; it does not pander to the lower nature; but it is high-toned, correctly toned throughout. * * There is an earnestness and even eloquence in this volume which makes the author appear to speak to us from the living page. It reads like a speech. There is an electric fire about every sentence."-E-iscoial Register, Pkiladelphia. "There is no danger of speaking in too high terms of praise of this volume. As a work of art it is a gem. As a counselor it speaks the wisdom of the ages. As a teacher it illustrates the true philosophy of life by the experience of eminent men of every class and calling. It warns by the story of signal failures, and encourages by the record of triumphs that seemed impossible. It is a book of facts and not of theories. The men who have succeeded in life are laid under tribute, and made to divulge the secret of their success. They give vastly more than'hints;' they make a revelation. They show that success lies not in luck, but in pluck. Instruction and inspiration are the chief features of the work which Prof. Mathews has done in this volume."-Christian Era, Boston. THE GREAT CONVERSERS, and Other Essays.By WM. MATHEWS, LL.D., author of " Getting On in the World." I volume,.2mo., 306 pages, with Map, price. —--------— $x 75 "As fascinating as anything in fiction."-Concord Monitor. "These pages are crammed with interesting facts about literary men and literarywork."-New York EveningMail. "They are written in that charming and graceful style, which is so'attractive in this author's writings, and the reader is continually reminded by their ease and grace of the elegant compositions of Goldsmith and Irving."-Boston Transcript. "Twenty essays, all treating lively and agreeable themes, and in the easy, polished and sparkling style that has made the author famous as an essayist. * * The most striking characteristic of Prof. Mathews' writing is its wonderful wealth of illustration. * * One will make the acquaintance of more authors in the course of a single one of his essays than are probably to be met with in the same limited space anywhere else in the whole realm of our literature."-The Chicago Tribune. PUBLISHED BY S. C. GRIGGS & CO., CHICAGO. WORDS; THEIR USE AND ABUSE, By Prof. Wm. Mathews, Author of "Getting on in the World," "The Great Conversers," Etc.,......... $2.00. "A book of rare interest."-Brooklyn Eagle. "Every page sparkles with literary gems."- The Interior. "An interesting, well-written and instructive volume."-Indeendent, N. Y. "Every literary man and woman should read it."-Sunday Times, N. Y. "A valuable companion for writers, talkers and people generally."-Bostio 7ournal. "Although written for popular reading, they are scholarly and instructive, and in a very high degree entertaining. No one can turn to a single page of the book without finding something worth reading and worth remembering. It is a book both for libraries and general reading, as scholars will not disdain its many valuable illustraions, while the rising writer will find in it a perfect wealth of rules and suggestions to help him form a good style of expression."-Pubishers' Weekly, New York. "To this large class, (the great body of our people in every rank, occupation and profession) it will prove a most entertaining recreation and useful study. Young men in higher schools, academies and colleges will also find it a useful and helpful guide, which will not only save them from committing vulgar solecisms and awkward verbal improprieties, but from contracting vicious habits that will stick to them, if once suffered to be formed, like the shirt of Nessus."-Ckristian Intelligencer,New York. "The final chapter on'Common Improprieties of Speech' should be printed in tract form.... We should like to put a copy of this book into the hands ofevery man and woman who is using or intends to use, our good old Anglo-Saxon with voice or pen for any public service. It is a text book, full of information, and contains hints, rules, criticisms and illustrations. which authenticate their own value."Christian at Work, New York TWO YEARS IN CALIFORNIA, By Mary Cone. Withl5fine engravings, a map of California, and a plan of the Yosemite Valley. Cloth..... $1.75 "One of the most reliable and authentic works on California yet issued."-Sunday Times, New York. "One of the best descriptions of the Golden State that has met our eye,.,. unbiassed, impartial, and intelligent."-Christian at Work, New York. "This is a book of absorbing interest... No description can do justice to it. Every page deserves to be read and studied."-Albany aournal. "It would be difficult to compress within the same limits more really valuable information on the subject treated than is here given."-Morning, Star, Boston. "Will be of much value to every one who contemplates either visiting or emigarting to California."-New York Evening Mail PUBLISHED BY S. C. GRIGGS & CO., CHICAGO. PRE-HISTORIC RACES OF THE UNITED STATES. By J. W. FOSTER, LL.D., Author of "The Physical Geography of the Mississippi Valley," etc. 4x5 pages, crown 8vo, with a large number of illustrations. Price, cloth ----------------------------------------- $3 5~ Half calf binding, gilt top ---------------------------- 6 oo Full calf, gilt edges.. —------------------------------- 7 50 "One of the best and clearest accounts we have seen of those grand monuments of a forgotten race."-London Saturday Reviewv. "The reader will find it more fascinating than his last favorite novel."Eclectic Magazine, N.Y. " The book is literally crowded with astonishing and valuable facts."Boston Post. "It is an elegant volume and a valuable contribution to the subject. * * * Contains just the kind of information in clear, compressed and intelligible form, which is adapted to the mass of readers."-A~ileton's Po ular Science Monthly. "The book is typographically perfect, and with its admirable illustrations and convenient index is really elegant and a sort of luxury to possess and read. * * Dr. Foster's style reminds us of Tyndall and Proctor, at their best. * * He goes over the ground, inch by inch, and accumulates information of surprising interest and importance, bearing on this subject, which he gives in his crowded but most instructive and entertaining chapters in a thoroughly scientific but equally popular way. We have marked whole pages of his book for quotation, and finally from sheer necessity have been compelled to put the whole volume in quotation marks, as one of the few books that are indispensable to the student, and scarcely less important for the intelligent reader to have at hand for reference."-Golden Age, New York. A MANUAL OF CESTURE.-With over xoo Figures, embracing a complete system of Notation, with the Principles of Interpretation and Selections for Practice. By Prof. A. M. BACON. Price ---------------—. —--------------------------— $I 75 "Prof. Bacon has given us a work that, in thoroughness and practical value, deserves to rank among the most remarkable books of the season. There has in fact, been no work on the subject yet offered to the public which approached it for exhaustiveness and completeness of detail. * * It is of the utmost value, not merely to students, but to lawyers, clergymen, teachers, and public speakers, and its importance as an assistant in the formation of a correct and appropriate style of action can hardly be over-etimated."-The P/iladelthia Inquirer. "Prof. Bacon's Manual seems expressly arranged for the help of those who study alone and have undertaken self-instruction in the art of persuasive delivery. The work in the hands of our ministry, well studied, would have the effect of emphasizing the living words of the Gospel all over the land, and making them two-edged with meaning."-The Chicago Pulpit. FIUBLISHED BY S. C. GRIGGS & CO., CHICAGO. ANDERSON'S NORSE MYTHOLOCY; or The Religion of Our Forefathers.-Containing all the Myths of the Eddas carefully systematized and interpreted, with an Introduction, Vocabulary and Index.-By R. B. ANDaRSON, A. M., Professor of Scandinavian Languages, in the University of Wisconsin. Crown 8vo, cloth, $2 50; full gilt, $3 oo; half calf, $5 oo. "Professor Anderson has produced a monograph which may be regarded as exhaustive in all its relations."-Tke New York Tribune. "A masterly work... No American book of recent years does equal credit to American scholarship, or is deserving of a more pronounced success."-Boston Globe. "I have been struck with the warm glow of enthusiasm pervading it, and with the attractiveness of its descriptions and discussions. I sincerely wish it a wide circulation and careful study."- William Dwiga t Wlhitney, Professor of Sanscrit and Comparative-Philology, Yale College. "I like it decidedly. A mythologist must be not only a scholar but a bit of a poet. otherwise he will never understand that petrified poetry out of which the mythology of every nation is built up. You seem to me to have that gift of poetic divination, and, therefore, whenever I approach the dark runes of the Edda, I shall gladly avail myself of your help and guidance." Yours truly, F. Max Muller, University of Oxford. "We have never seen so complete a view of the religion of the Norsemen. The Myths which Prof. Anderson has translated for us are characterized by a wild poetry and by suggestions of strong thought. We see images of singular beauty in the landscape of ice and snow. Sparks of fire are often struck out from these verses of flint and steel."-Bibliotheca Sacra. "Professor Anderson is an enthusiastic as well as an able scholar; and he imparts his enthusiasm to his readers. His volume is deeply interesting as well as in a high degree instructive. No such account of the old Scandinavian Mythology has hitherto been given in the English language. It is full, and elucidates the subject in all points of view. It contains abundant illustrations in literal and poetic translations from the Eddas and Sagas... Professor Anderson's interpretations of the myths throw new light upon them, and are valuable additions (as is the whole work) to the history of religion and of literature... It deserves to be welcomed, not only as most creditable to American scholarship, but also as an indication of the literary enterprise which is surely growing up in our North-western States."- The Presbyterian Quarterly and Princeton Review. AMERICA NOT DISCOVERED BY COLUMBUS.-A Historical Sketch of the Discovery of America by the Norsemen in the loth century. By PROF. R. B. ANDERSON, of the University of Wisconsin, with an Appendix on the Historical, Literary and Scientific value of the Scandinavian Languages. Price, 12mo, cloth.....................................................................$I oo00 "A valuable addition to American history. The object is fully described in its title page, and the author's narrative is very remarkable. * * * The book is full of surprising statements, and will be read with something like wonderment,"Not" and Queries, London. PUBLISHED BY S. C. GeIGGS & CO., CHICAGO. THE WORLD ON WHEELS, and Other Sketches.By BENJ. F. TAYLOR. Illustrated. I vol., 12mo. Price, $ti.5o. "Full of humor and sharp as a Damascus blade."-Presbyterian, Phil a. "The pen-pictures of B. F. Taylor are among the most brilliant and eccentric productions of the day. They are like the music of Gottschalk played by Gottschalk himself; or like sky-rockets that burst in the zenith, and fall in showers of fiery rain. They are word-wonders, reminding us of necromancy,'with the dazzle and bewilderment of their rapid succession."-Chicago Tribune. "Reader, do you want to laugh? Do you want to cry? Do you want to climb the Jacob's ladder of imagination, and dwell among the clouds of fancy for a little while at least? Do you? Then get B. F. Taylor's World on Wheels, read it, and experience sensations you never felt before! * * It is a book of'word pictures,' a string of pearls, the very poesy of thought."- The Ckristian, St. Louis. "Another of Benj. F. Taylor's wonderful word-painting books. * * In purity of style and originality of conception, Taylor has no superiors in this country. The book before us is a gem in every way. It is quaint, poetical, melodious, unique, rare as rare flowers are rare. He has an exquisite faculty of illustration that is unsurpassed in the whole range of American literature."-St. Louis Dispatch. OLD-TIME PICTURES and SHEAVES of RHYME. By BENJ. F. TAYLOR. Red line edition, small quarto, silk cloth, with eight fine full page illustrations. Price ---------------------------------------------— $2 oo The same, full gilt edges and gilt side 2 —------------------ 5o JOHN G. WHITTIER writes:-" It gives me pleasure to see the poems of B. F. Taylor issued by your house in a form worthy of their merit. Such pieces as the 'Old Village Choir,'' The Skylark,'' The Vane on the S.Aire,' and'yune,' deserve their good setting. * * I do not know of anyone who so well reproduces the home scenes of long ago. There is a quiet humor that pleases me." "Unless it be Whittier, we know of no American poet so sweet, tender and gentle in his lyrics as B. F. Taylor. No writer of to-day sings the praises of rural life and scenery as eloquently, and we do not wonder that many of his poems have become classic. The holiday volume of his happy verses, OLD TIME PICTURES AND SHEAVES OF RHYME is a very eloquent and daintily bound volume, and comes from that growing and reliable publishing house of the West, S.C. Griggs & Company, of Chicago. Taking up this handsomely printed book, we have to linger on the delightful imagery and graceful diction of its pages, glowing as they are with pure and tender thoughts, and the earnest, indescribable music of sunny fields and rural joys. * * No one can read it but will be the better for so doing."- The A lbany Morning ~xiress.