The American Annual Cyclopaedia and Register of Important Events of the Year, 1861-1865, vols. 1-5. New York: Appleton & Co., 1868.

Finances of the United States, 1861

FINANCES OF THE UNITED STATES. The finances of the Federal Government for the year 1861 underwent a very important and radical change, both in respect to the policy of a national debt, and in relation to the mode of raising revenue. The Constitution of the Federal Government provides for raising revenue as well by direct taxes as by indirect duties upon consumable articles. It has been the case, however, that the former have been unpopular, while the latter have not only had the merit of being easily collected, but, while they have sufficed to meet all the ordinary wants of the Government, and sometimes greatly to exceed them, as in 1838, when a surplus revenue of $28,000,000 was distributed among the States, they have served to give incidental protection to the nascent manufactures of the Union. The revenue derived from the sales of land was also a resource which did not bear directly upon the industry of the people. In times of unforeseen difficulty, like commercial revulsion or war, the Government has always been able to borrow sufficient to meet the exigency, and returning prosperity has always afforded the means of paying off the debt. During the war of 1812 an attempt at direct taxation was made without very satisfactory results, and the taxes were soon repealed. The aggregate resources and payments of the Federal Government, from its origin down to the close of the fiscal year 1861, were as follows:

Customs revenue. ………...$1,575,152,579.02

Land…………………………..175.817,961.00

Taxes and other receipts……….95,305,522.56

Total ordinary revenue, March 4,1789, to July 1,1801, ……………………………$1,848,275,863.43

Total ordinary expenditure, March 4,17S9, to July 1,1861, 1,453,790,780.00

Total execs revenue …………..$392,485,077.48

Total amount received for loans 1759 to 1861 …$452,935,644.64

Total amount paid for loan 1789 to l861 ………...781.886,375 00

Excess payments for loans.. $318,950,730.33

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Thus by far the largest portion of all the expenses of the Government during its existence, including war expenses, purchase of territories, indemnities to Mexico, Texas, &c, was discharged by the customs revenues. If we deduct from the debt $90,867,828, that existed July 1, 1861, the amount of $28,101,044 deposited among the States under the law of 1836 and never returned, and also the debt made necessary by the troubles in the latter part of the fiscal year 1861, there will remain very little, thus showing that all the expenses of the Federal Government from its origin have been paid by customs revenues, leaving in the hands of the Government an immense amount of property acquired in land, and still at its disposal, also vast military resources and public buildings, in the whole Union.

The magnitude of the civil war caused, however, a complete change in the finances, involving as it did an amount of expenditure within the year, never before undertaken by any nation. The capital of the country seemed, however, equal to the exigency, although the public mind was at first somewhat startled by events. In June, 1860, Congress had authorized a loan of $20,000,000; of this, $10,000,000 was offered in the month of October in a 5 per cent, stock, which was taken at a small premium. Inasmuch, however, as the Presidential election of November 6, 1860, intervened before the instalments were paid up, the resulting inquietude caused some of the bidders to decline the stock, and $7,022,000 only was issued. The same circumstances caused a great decline in the customs revenues, and the means of the Government in December were greatly cramped. The Secretary of the Treasury, Howell Cobb, resigned December 10. On the 14th of that month Congress passed a law, approved on the 17th, permitting the issue of $10,000,000 treasury notes, payable in a year, at the lowest rates of interest offered. The Secretary offered $5,000,000 of the notes, bids to be opened December 28. "When the time expired, however, but $500,000 had been bid, at 12 per cent. There were some offers at 24 per ct., and some as high as 86 per cent. The Secretary rejected all over 12 per cent. It was highly necessary that the money should be had to meet the interest on the Federal stocks due January 1, and a number of banks and bankers offered for $1,500,000 at 12 per cent., on condition that the money should be applied to the interest. On the 31st the remainder was taken by the same association at the same rate. It may be here stated that the State of New York had offered for $1,200,000 in a 7 per cent, stock, 8 1/2  years to run, and it was taken at 101.12,"average 102.71, on the 20th December.

General Dix was appointed Secretary of the Treasury in January, and he offered the remaining $5,000,000 of the loan authorized.

The bids were opened on the 19th, and the notes awarded as follows: […] per cent.

The condition of the finances now seriously engaged the attention of Congress. The apparent discredit of the Government made some vigorous means necessary to replenish the treasury. The necessity of revising the tariff! so that it would produce a larger revenue, was obvious, and a bill to that effect was introduced. Meantime a bill was passed, February 8, authorizing a loan of $25,000,000, to bear 6 per cent, interest, to run not less than ten nor more than twenty years; the stock to be sold to the highest bidder. The Secretary offered $8,000,000 of this stock. The bids were opened February 27, and the whole amount offered was $14,365,000, ranging from 75 to 96 per cent. All bids below 90 were  refused, and the stock, as awarded, ranged at 90 to 96 per cent.

The tariff bill reported by the Committee of Ways and Means under such circumstances had been passed with little debate. It restored the highest protective character to the tariff, replaced ad valorem duties with complicated specific duties, and gave but 30 days' notice before going into operation. It was passed March 2, to go into operation April 1, and it authorized a loan of $10,000,000. The immediate effect of the tariff was to produce larger entries at the custom-house, in order to avoid the new tax. The consequently improved customs revenue supported the Government credit, and this, with renewed hopes of continued peace, caused the Government stock to advance in the market. The new Secretary of the Treasury, S. P. Chase, offered $8,000,000 more of the stock, for which bids were opened April 2. It was found that for $3,000,000, 94 to 100 per cent, was offered, and 93}, or 8} per cent, higher than the bids in February, for an amount equal to the balance of the loan. The department thought proper to reject all bids below 94, consequently only that part of the loan was placed, $3,099,000, average 94.01, netting $2,913,395. This decision was unfortunately made at the moment when the expedition was about to sail from New York to reenforce Fort Sumter, a fact not known to the public. "When it became known, much uneasiness was created, and in the midst of it the department offered $5,000,000 of the balance of the loan in 6 per cent, treasury notes, payable in two years, and convertible into twenty-years stock. These bids were  opened on the 11th April, when only $1,000,000 had been offered. Parties interested then procured a delay, in order that further effort in favor of the stock might be made. The price Page 297 of money at call was then in the market 4 per cent., and could with difficulty be placed at that rate, and the United States 6 per cent. 20-years stock was selling at 83. Finally the bids amounted to $2,500,000, and the leading banks and bankers with great exertion made np the remainder, completing the $5,000,000 6 per cent, treasury notes at par. These being receivable for customs-duties, while money in the open market was only 4 per cent., large importers who had funds lying idle to meet duties, could invest them in these notes, where they would earn 6 per cent., and be available for the duties.

The department was now comparatively easy for the moment, but the immense expenses rapidly absorbed means. Congress was not to meet until July 4, and the Government credit, as apparent from the price of its 6 per cent, stock being 84, when money was only worth 4 per cent., for the same description for which the Government a few years before had itself paid 22 per cent, premium, was shaken. The resources of the Treasury now consisted of $14,000,000, that had been authorized by the act of June, 1860, but which could not be sold under par for a 6 per cent, stock. There was the balance, $9,000,000, of the $25,000,000 authorized by the law of February, 1861, which might be sold to the best advantage, and there was also the $10,000,000, authorized by the tariff law of March 2, 1861 ; but this could not be used until after June 80, or the close of the fiscal year 1861. The difficulty was to raise means upon these stocks. The banks and capitalists began to feel the necessity of aiding the Government and sustaining its credit as a matter of self-defence. Under these circumstances the New York Chamber of Commerce, with various sub-committees, and the New York and Boston banks, took the matter in hand, and after much difficulty issued the following card, May 16:

"The undersigned, a committee of the Chamber of Commerce, having, by a sub-committee, recently visited Washington to confer with the Secretary of the Treasury on the subject of the loans, which he is authorized by law to issue, they beg to call the attention of the public to the particulars of these loans, as follows:

"1. A loan of about nine million dollars, which will be issued in bonds or stock having twenty years to run, and at six per cent, interest. For this proposals are invited, and it will be awarded to the highest bidder, at Washington, on Tuesday, the 21st inst.

"2. A loan of fourteen million dollars, ($14,000,000,) which is limited by the law of June, 1860, at par. This loan is now advertised to be awarded on the 30th instant, but from its limitation it will probably have to be issued in treasury notes having two years to run, and convertible into twenty-years stock or bonds, as above, at the pleasure of the holder; which notes the Secretary is by law authorized to substitute, and which are also restricted to par. "And the committee invite all capitalists and moneyed institutions to avail of these opportunities for investment.

"Committee.-Pelatiah Perit, Stewart Brown, William II. Aspinwall, J. J. Astor, jr., August Belmont, James Gallatin, A. T. Stewart, J. M. Morrison, Moses Taylor, George S. Coe, F. A. Palmer, John Q. Jones, D. K. Martin, Jacob Campbell jr."

When the time expired for the proposals, the bids were not completed, and Mr. Chase postponed the opening of the bids until May 25. The intermediate time was employed by influential parties in endeavoring to make up the loan. Finally, on opening the bids, the offers for the $9,000,000 reached 84 to 93 for the stocks, of which $6,396,000 were awarded at 85 to 93, a large portion to the New York banks, and $2,241,000 in 6 per cent, treasury notes at par.

The proposals for the $14,000,000 were to be opened on the 30th of May. That, however, was only a formality, since no one would bid par for stocks that he could buy in the market at 84. The compliance with the law, however, enabled the Secretary to issue the amount in treasury notes. Some of these were taken, and the remainder was paid out gradually to creditors.

While the Federal Government was thus struggling for money, the various States were also in the market with war loans. New York City procured $1,000,000 at the close of April; Pennsylvania sold $3,000,000 of a 5 per cent, loan, Ohio $1,000,000, Indiana offered $1,500,000 in a 6 per cent, stock, Illinois $1,000,000, Michigan, $500,000 at 7 per cent., Iowa $400000 at 7 per cent., Connecticut $2,000,000 at 6 per cent. The State of New York obtained $700,000 7 per cent, loan at 101.38 to 101.65, Maine $1,000,000 in a 5 per cent, stock at a premium.

Towards the close of June the Government wants were again attracting attention, and the banking interest was urging the adoption of the loan or stock system, rather than the treasury note plan which the Secretary seemed to favor. There were no measures adopted, however, until the meeting of Congress. The Secretary then required $5,000,000 to carry him along until Congress should devise means. The two-years treasury notes that had been issued at par were at 2 per cent, discount, and were therefore not directly available. It was finally decided to borrow of the banks the required amount at 60 days on pledge of the 6 per cent, notes as collateral security. The amount of $5,000,000 was promptly made np on these terms.

At the meeting of Congress, July 4, the Secretary of the Treasury, in his report, set forth the financial difficulties that beset the Government, and stated the probable expenditure for the year at $318,519,581.97.

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Civil list……………………. $831,496.90

Interior department………….. 431,525.75

War Department………… 180,296,397.19

Navy Department………… 30,609,520.29

Public debt……………….. 12,639,861.64

_________________________________

Total extra: …………….$224,808,801.77

Ordinary expenses ……… 93,710,780.30

__________________________________

Total for 1862………… $318,619,582.07

This was the sum Congress was called upon to meet. According to the Secretary $80,000,000 might he raised by import duties and taxation,, and $240,000,000 by loans. Taxes on coffee and tea were proposed, and higher rates upon most other articles of consumption. Congress immediately took the matter into consideration, and, July 17, passed a law authorizing a loan of $250,000,000 in form as follows:

Stock, 7 per cent., redeemable after 20 years.... $250,000,000

 “  “  “ equal to par for 7 per cent 100,000,000

Stock, 7 per cent., redeemable after 20. years, payable in Europe

Treasury notes, 7 3/10 per cent., redeemable at 3 years, convertible into 6 per cent. Stock

Treasury notes, 3 redeemable at 1 year, convertible into 3-years bonds Demand notes, issued as money, not less than $5, nor more than 50,000,000

Treasury notes, 6 per cent., payable within 12 months 20,000,000

The whole amount of stock, treasury notes, and demand notes was not to exceed $250,000,000, except the 6 per cent, notes left, which were to be used as collaterals for temporary loans, and were meant to legalize what the Secretary had already negotiated in that shape. The permission to issue $100,000,000 in foreign stock was in the hope that a portion of it might be placed abroad. The act, as it passed the House, pledged the customs revenues for the payment of the interest, but the clause was subsequently stricken out. The law of July 17 limited the rate at which the 7 per cent, stock might be sold, to par; but a supplemental act of August 5 allowed the sale of a 6 per cent, at a rate equal to par for a 7 per cent, stock.

Having given this authority to borrow, Congress proceeded to pass such laws as might improve the revenues. A direct tax, an income tax, and higher duties, were imposed. The direct tax act provided for the levy of $20,000,000 upon all the States, which would give from the loyal States $12,000,000, from which the expenses of collection were to he deducted. The income tax provided for the payment of 3 per cent, on incomes over $800, to be levied in April, 1862, on the incomes of 1861. The increase of duties embraced taxes on cocoa, coffee, tea, sugar, which it was supposed would yield $22,500,000. The Secretary remarked "that the total revenue from imports during the present year may be $57,000,000, to which may be added the sum of $3,000,000, to be derived from the sales of the public lands and miscellaneous sources, making the total revenue for the year $60,000,000. While, therefore, there is every reason to believe that under a modified tariff, when the prosperity of the country shall be fully restored, an annual revenue of not less than $80,000,000, and probably more, may be realized, it will be necessary, in order to sustain fully the public credit, to provide for raising the sum of $20,000,000 for the current year, at least, by direct taxes, or from internal duties or excises, or from both."

With these provisions the Secretary had now to come into the market to raise the money, and his prospect was not promising. The law limited the sale of the stocks to a price equal to par for a 7 per cent, stock, which was 89.32, and the 6 per cent, had been at 83 ½  in June, and were at the passage of this act, August 5, 86 ¾ . The disaster at Bull Run had placed the whole country in peril. Washington was in immediate danger of capture; Baltimore was of doubtful loyalty, and several large States now held by the armies, were then ready to cast their influence into the preponderating scale. Congress had adjourned after binding the Secretary of the Treasury by law, to obtain money at a minimum rate, and there was no resort left but the issue of paper money, based upon the faith and future resources of a country discouraged, distracted, and whose future was shrouded in gloom. It was under these circumstances that the Secretary visited New York, and after an interview with the bank officers, it was agreed that the banks of Boston, Philadelphia, and New York should take the 7 3/10 notes of $50 and upwards, three years to run, in the proportions as follows: […].The Secretary to draw the money no faster than he required it for his weekly, expenses. Hence as the notes all drew interest from the date they were taken, the banks had the use of the money a part of the time.

The amounts taken were as follows:

August 19.  Notes to draw Interest from date $50,000,000

October 1.  …………………………………...50,000.000

December 1. Stock  ………………………… 50,000,000

This was a supply of $150,000,000 for three months, in addition to which the Secretary had the right to issue $50,000,000 of paper money; but to the exercise of this power the banks strongly objected, since the notes being made redeemable in coin in New York, and paid out in the interim, might cause a drain of specie from New York, which the department would be compelled to meet under the law, by drawing the coin from the banks, thus jeopardizing their solvency. The Secretary, therefore, used them very sparingly. It was also agreed that the Secretary should make an appeal to the public for the sale of the 7T30per cent, notes, and that he should appoint agents for the sale in all prominent places; but that all sales so made should be supplied from those taken by the banks, until the amount should be exhausted. Page 299 The Secretary made an address to the people in accordance with this understanding, and some 500 agents were appointed. The appeal was, however, without the anticipated success. The public responded but to a comparatively small extent. The Secretary continued to draw upon the credit in his favor opened by the banks, which thus found their means passing from them, without much prospect of getting them back, since the notes they had taken would no longer sell at par in the open market. Hence, as the 1st December approached, they decided to take $50,000,000 in the 6 per cent. 20years stock at a rate equal to par for the 7 per ct. This was 89.822, or in amount $44,661,231 91 for the fifty millions, to which was added the interest from July, making $45,795,478.

Congress was now again in session. The report of the Secretary, that had been looked for with the greatest interest, was at last made, and it contained the following statement of the money that had been raised since the adjournment of Congress in August:

There were paid to creditors, or exchanged for coin at par, at different dates in July and August, six per cent, two-year notes, to the amount of …………………………… $14,019,034.66

There was borrowed, at par, in the same months, upon sixty-days six per cent, notes, the sum of …….$50,000,000.00

There was borrowed, at par for seven per cent., on the 10th of November, upon twenty-years six per cent, bonds, reduced to the equivalent of sevens, including Interest …$45,795,478.48

There have been issued, and were in circulation and on deposit with the Treasurer, on the 30th of November, of United States notes, payable on demand …………………..$24,550,325.00

Making an aggregate, realized from loans in various forma, of ………………………….$197,242,588.14

It will be observed that in the whole of this borrowing very little was really subscribed by capitalists for investment. About $38,000,000 of the 3-years notes only had been taken, mostly by small investors, and they were already again offering them in the market to an extent which reduced the price to 96 for those that were endorsed, and 98 for clean notes. The banks had invested the idle capital accumulated in their vaults, belonging to depositors, and the securities were still hanging over the market in prospective competition with the future loans of the Government. The department, nevertheless, had obtained the money. "While thus successful in borrowing, the revenues had been far less than the estimates, and the expenses far greater—the former, by reason of the stagnation of trade, and the latter in consequence of the great increase in the army.

The Secretary, therefore, revised his estimates for the year as seen in the following table: The Secretary advised a resort to taxation as a means of raising $50,000,000 in excess of the customs for the service of the year 1863, in which year he estimated the expenses at $475,334,245. This result was very unsatisfactory, and the public credit did not revive on the exposition, and the year closed with the suspension of the banks, amid gloomy prospects.

On emitting the demand notes, the Secretary of the Treasury addressed a circular to the various Assistant Treasurers, to the following effect:

Under the acts of July 19th and August 5th last, Treasury notes of the denomination of $5, $10, and $20, have been, and will continue to be issued, redeemable in coin on demand at the offices of the Assistant Treasurer at Boston, New York, Philadelphia, St. Louis, and at the Depository of Cincinnati. Those notes are intended to furnish a current medium of payment, exchange, and remittance, being at all times convertible into coin at the option of the holder, at the place where made payable, and everywhere receivable lor public dues. They must be always equivalent to gold, and often and for many purposes more convenient and valuable.

A sufficient amount of coin to redeem these notes promptly on demand will be kept with the depositaries, by whom they arc respectively made payable. And all depositors and collecting officers will receive them, enter them on their books, and pay them to public creditors as money. Large amounts of the notes of small denominations are rapidly being issued and distributed.

General Scott issued the following order:

                            HEAD-QUARTERS OF THE ARMY, 

                                 WASHINGTON, Sept 3,1861. 

The General-in-Chief is happy to announce that the Treasury Department, to meet future payments to the troops, is about to supply, besides coin, as heretofore, Treasury notes in fives, tens, and twenties—as good as gold at all banks and Government offices throughout the United States, and most convenient for transmission by mail from the officers and men to their families at home. Good husbands, fathers, sons, and brothers, serving under the Stars and Stripes, will thus soon have the ready and safe means of relieving an immense amount of suffering, which could not be reached with coin. In making up such packages, every officer may be relied upon, no doubt, for such assistance as may be needed by his men.

   By command of                    Lieutenant-General SCOTT.

   E. D. Townsend, Assistant Adjutant-General.

Of these, the Secretary had issued about

ESTIMATES OF REVENUE AND EXPENDITURE FOR THE YEAR 1862.

Revenue.

August estimate. December estimate. Decrease. Increase.

$57,000,000 3,000,000 20,000,000 $32,198,602 2,354,062 20,000,000 $24,801,398 045,933 $80,000,000 318,519,582 854.552.664 543.406422 $25,447,336 $224,886,840

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$24,500,000 up to the 11th December. There then remained to him for resources the remainder of the demand notes, $25,500,000, to be issued; also, the instalments due from the banks on the $50,000,000 of stock, taken December 1st; and also, $50,000,000 balance of the $250,000,000 loan. These resources, he said, would carry him to the 15th January, when new legislation would become necessary. The suspension of the banks involved the suspension of the Government on its demand notes, and, notwithstanding the circular of the Secretary and the law of Congress, no one of them was paid in coin. The last instalments of coin due from the banks on the loan was applied to the interest on the public debt, which, at the close of the year, as compared with the previous year, was as follows:

UNITED STATES DEBT-CLOSE OF 1860 & 1861.

Loan 1842 "1847 "1848 "1858 "1860 "1861 Texan Indemnity Texas debt Oregon War debt. Treasury notes issued under acts prior to 1857. Treasury notes issued under act of December 23d, 1857 Treasury notes issued under act of December 17th, 1860 Treasury notes issued under acts of June 22d, 1860, and February and March, 1861—two years Treasury notes issued under acts of March 2d, July 17th and August 5th, 1861, for 60 days—temporary loan.. Three-years bonds, dated August 19th. 1801, issued underact of July 17th, 1861 Three-years bonds, dated October 1st, 1861, issued under acts of July 17th, 1861 Three-years bonds under act of July, 1861 Twenty-years six per cent, bonds, dated July' 1st, 1861 United States notes, issued under act of July 17th, 1861 United States notes, issued underact of February, 1862 Total […].

There were subsequently authorized the following amounts:

Stock, six per cent., payable after ten years.........$500,000,000

Notes on demand, legal tender, may be" funded $150,000,000

Certificates of indebtedness, six per cent., one year unlimited.

Deposit certificates, five per cent., ten days' notice $50,000,000

Of the demand notes, $50,000,000 in lieu of the $50,000,000 issued in August, which are to be called in, may be funded in the six per cent, stock; but, if they are not, the whole may be issued, which would make the debt $1,002,989,710, besides the certificates of indebtedness, about $100,000,000, but not limited in amount.

Most of the Northern States had also advanced considerable sums to the Federal Government, of which 40 per cent, had been returned by the close of the year.

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[….].Taxation.—The levying of a direct tax for the support of the Federal Government involved the apportionment of the tax among the States, according to their Federal representation, since direct taxes, or taxes upon property, are by the Constitution so ordered. Hence, the proportion of the whole tax which each State is required to pay depends, not upon its ability, but upon its numbers.

The following table gives the population of each State, the amount of its debt in 1861, the amount of the State valuation on which local taxe9 are levied, and the portion which each State must pay of the Federal tax of $20,000,000: .

Alabama Arkansas California Connecticut .... Delaware Florida Georgia Illinois Indiana. Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Mississippi Missouri Michigan Minnesota New Hampshire. New Jersey New York North Carolina Ohio Oregon Pennsylvania ... Rhode Island South Carolina. Tennessee Texas Vermont  Virginia Wisconsin Grand Total. Population. […].

Debt. Valuation. Tax apportionment. $5,098,000

The imposition of this tax falls very unequally. Thus, Missouri must pay nearly as much as Massachusetts, although the latter has more than double the taxable wealth, and quite five times the actual wealth of Missouri, which has been impoverished by the war operations, while the industry of Massachusetts has been less interrupted by hostilities. The tax in Missouri is two dollars on the thousand of valuation; in Massachusetts, it is less than one dollar. Illinois, with less than half the taxable property, must pay 40 per cent, more tax as compared with Massachusetts; and taxes on articles of consumption will, of course, fall heaviest on the largest population. The aggregate valuation here given is that on which the State taxes are levied. The census gave another estimate of valuation which carried the amount to $16,000,000,000.

The following shows the Federal representative numbers and the census valuation, distinguishing real and personal property. The aggregate of real and personal property is given at $17,088,417,635, or $5,792,110,693 in excess of the amount on which the State taxes are levied. Yet in New York and Massachusetts the State valuation is the highest.

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TABLE SHOWING THE FEDERAL POPULATION, AND THE ASSESSED VALUE OF REAL AND PERSONAL PROPERTY OF THE SEVERAL STATES OF THE UNION. CENSS8, 1860.

Alabama Arkansas California Connecticut... Delaware Florida Georgia Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota.— Federal Population. Value of Real Personal Property. Mississippi Missouri New Hampshire. New Jersey New York North Carolina.. Ohio Oregon Pennsylvania.. Rhode Island.. South Carolina Tennessee Texas Vermont Virginia Wisconsin Total Federal Population. […].

616,717 1,186,331 826,072 672,081 8,SS0,727 860,284 2,839,599 52,464 2,906.870 174,021 642,795 999,533 530,159 815.116 1,899.781 775,878 Value of Real »157.S36,787 153,450,577 69,688.346 151,161,942 1,069.658,080 116.366,578 6S7,518,121 6.279,602 661,1»2.9S0 88.778,204 129,772,684 210,691,180 112,476,018 65,689,978 417,952,228 148,28S,766 29,568.427 1*12.006,756.5S5 1)5,081.661,050 Value of Personal Property. f351.68t.175 114455.274 64,171,748 145.520,650 820,8116,558 175,981,029 272,34S.9S0 12.745.818 158,060,855 41,826,101 859.546,444 162.504.020 155,816.822 19,118.646 239.069.103 87,706,728

TRUE VALUE OF REAL AND PERSONAL ESTATE,

According to the Seventh Census, 1850, and the Eighth Census, 1860, respectively.

States.     1850.      1860.

Real and Personal Estate. Real and Personal Estate. Increase. Increase per cent, for 10 years. Alabama Arkansas California Connecticut Delaware Florida Georgia Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri New Hampshire New Jersey New York North Carolina Ohio Oregon. Pennsylvania Rhode Island South Carolina Tennessee Texas Vermont Virginia "Wisconsin District of Columbia. Nebraska New Mexico Utah Washington Total  […].

The State valuation is, however, the practical one. In addition to the aggregate debt of the States, there are the city, town, and county debts, which swell the amount to fully $300,000,000, and make the whole public debt, actual and authorized, $1,400,000,000, bearing an annual average charge of $84,000,000, or, in round numbers, $100,000,000, with a one per cent, sinking fund. The $781,000,000 that have been paid in the past eighty years of the Government, were met by the duties levied on the goods purchased abroad with the proceeds of cotton sold. That resource is, for the present, at all events, cut off, and the general exports of the country will not sustain an import revenue more than equal to the ordinary expenses of the Government; hence, the whole burden of the debt must fall upon taxation, direct and indirect. These taxes, which are now new in the country, will be systematized, so as hereafter to yield the largest portion of the Government revenue made necessary by the debt.

The currency necessities of the Government have produced also another radical change. Heretofore, under the Constitution, gold and silver have been the only legal currency, and the powers of Government have been repeatedly directed to its increase as the basis of the circulating medium. The Government has, however, resorted to paper money as a resource, by which $150,000,000 are obtained by the use of notes, where bank notes have previously circulated to the extent of $200,000,000. This paper, competing with that of the banks, as a matter of course, would depreciate in the proportion in which it is emitted to the amount of taxes collected. If the taxing is sufficient to meet the wants of the Government, there will be no depreciation of paper, whether the notes are paid in coin or not. The banks issue, in the United States, some $200,000,000 of paper for circulation, payable in coin; yet, in ordinary times, they are never really paid in coin, because they are carried back to the issuer through the concealment of the credits on which they were issued. If that did not take place, redemption in coin would be impossible; as it does take place, redemption in coin is not asked. The case is not different with the Government. No possible form or device of paper issue can save its credit, unless it makes available, by taxation, the vast property in the country. The payment of these taxes will carry the paper money back to the Treasury, and $200,000,000 might easily float at par. The question is, how to make the notes float until the taxes are available, and this object is sought by making them a legal tender for all debts. It is to be borne in mind, that a certain amount of currency is requisite for the transaction of business. Hitherto specie has supplied a considerable portion of the circulating medium. The disappearance of the metals on the suspension of the hanks, left a vacuum which the Government notes could supply to some extent. The amount of the metals in the country may be approximated as follows: […]. January, 1862... $237,510,143

The amount in the country in 1821 was the estimate of the Secretary of the Treasury. The result is the amount in the whole country, including about $60,000,000 which is in banks, &c, at the South. It has been estimated that there is $50,000,000 in plate, jewelry, &c. There would then remain about $127,000,000 in Northern banks and circulation. Of this amount, $50,000,000 are gold dollars and silver fractions. A considerable portion of the whole has gone out of circulation, leaving an opening for an equal quantity of paper, which, for denominations above $5, will be well supplied with Government notes, and bank issues for small notes.

The large increase which took place in the imports of specie in 1861 grew out of the balance due the United States from the foreign trade, which brought large sums of specie into the country, and caused the retention of the California supplies. The general state of the trade, as manifest in the rates of bills and money, and the amount of specie in the city of New York monthly during the year, are expressed in the following tables: […].

Page 304

[…] In December, the amount drawn from the banks was very large, and involved their suspension. It is to be regarded as a matter of course, that the stagnation of trade which caused specie to arrive from abroad in place of goods, and which caused money to accumulate in the banks, also produced unusually low prices for money. Few people wished to employ it, and the lenders were fain to accept low rates. The table on page 803 shows the highest and lowest rates of sterling bills in each month, the highest and lowest rates for money, and the amount of specie in the banks and subtreasury, forming the total in mints.

The year opened with a very low rate for sterling bills, being nearly seven per cent, under the nominal par, and several per cent, below the cost of importing specie. The arrivals consequently were largo; and none of the California receipts being shipped, the amount in the city rose nearly $20,000,000 to March. The metals continued to fluctuate between the banks and the Treasury in proportion as the banks paid it over for loans and gradually re-collected it from the Government disbursements. The supply of gold from California was indeed less in the year 1861 than for previous years. The State has of late supplied more of its own wants, and has therefore exported less gold, while of that diminished export a larger quantity has gone direct to Europe.

California Gold Receipts, Exports, and Coinage. (40,676,758 40

The following is the proportion of shipments from California to New York: […]

The shipments have declined since 1854, when they were, at the highest, $10,700,000 per annum; but the proportion sent to New York has, it appears, fallen off more than $13,000,000, by reason of the greater quantities sent to China and to England direct. The gold exported from California to New York is in refined bars mostly. These are stamped with the value according to the fineness. The bars, on being lodged at the New York Assay Office for coinage, are charged five cents per ounce for parting the silver, one-half per cent, for coinage. The silver required for coinage is TJ-T of the standard. This is taken from the parted silver, and the remaining silver is coined at a charge of one-half per cent. (4,694,838 $2,715,002 These results show a successive decline of $5,184,082 in three years from the mines at San Francisco; but it appears that the decline in exports in the same time has been greater, reaching $6,963,704; thus indicating that other industries in California are encroaching upon the mining, which may have become comparatively less profitable. 14.8432

Net value of gold, as above …………………….$17 27,7519

Value in coin, gold bar, 840 fine ……………….$17 42.5951

The invoices of gold received from California range from 675 to 950 fine. The average of the bars governs the deposit. We have annexed a carefully prepared table, showing at a glance the value of any bar deposited.

No allowance for silver is made, unless the bars deposited yield $5 above the expense of parting.

Page 305

Page 306

[…] The California and Philadelphia mints were  in the past year nearly the chief sources of supply of coin, since the Southern mints early in the year passed into the hands of the Confederates. The two mints, it appears, supplied the following quantities of American coin:

This immense supply of coin has been poured into the markets in a year of war panic, and has probably been hoarded to a very considerable extent, since the banks held but very little more at the close of 1861 than at its commencement. In fact, during the eleven years in which California and Australia have poured their supplies upon the markets of the world, the specie currency of Europe has scarcely been increased.

The London circular of Mr. James Low states Tiara, Gold. […]This is an amount very nearly equal to the whole California product in that period. The only effect, therefore, rias been to substitute gold for silver, and without increasing the aggregate metallic currency of Europe.

the amount of specie shipped from England to the East by the steamers of the Peninsular and Oriental Company during the last eleven years. The aggregate in that period is nearly ninety millions sterling, of which scarcely even the smallest portion has ever returned:

Mm. Gold.

Total. Philadelphia.... (496,000 8,107,740 $15,630,000 67,631,850 (16,! 26.000 70,789,096

Total $3,603,740 (88,261.856 (66,S65.096

Page 307

In the year 1861 the amount exported to the East was, it appears, $36,800,000, mostly silver, and from Europe to the United States $84,400,000, mostly gold, making $71,200,000, without producing any other effect than adverse exchanges in France, which usually draws some sixty millions in bills on England for goods, silks, wines, &c, sold to the United States. This year those sales did not take place, and she was obliged to remit an equivalent in specie to England, and to rectify it, loans of specie were made in the London market for account of the Bank of France.

Stocks.—The range of the leading stock securities in the past year, as compared with former AVERAGE OF years, is as follows, the highest, lowest, and average quotations for 1859, 1860, and 1861, at the New York Stock Exchange for the stocks most largely dealt in. The fluctuations have been very great, and being produced by causes bearing unequally upon different portions of the country, show extraordinary changes in relative prices. Bonds of Southern and Border States have suffered a very great decline; on the other hand, railroad shares in the Northern States have shown a great improvement over 1859, and under the influence of the confidence in the Union cause, have reached extraordinary high figures, which may be regarded as excessive for peace prices, and higher than can be maintained.

STOCK SALES.[…]

State War Loans.—Indiana passed a loan of $2,000,000. It was mode pursuant to one of the very few provisions of the amended Constitution of Indiana in regard to the creation of new debt, viz.: For the public defence against threatened hostilities. The only other contingencies authorizing the exercise of this power are to pay the annual interest on the preexisting debt, and to repel invasion and insurrection. The old or preexisting public debt of Indiana is:

In 5 per cents $5,322,000

In 2½  per cents  2,055,000

Together $7,877,000

Involving an annual charge of only $307,226

These new bonds bear interest at the rate of six per cent, per annum, payable semi-annually in New York, and the principal reimbursable in twenty years from date. For the payment of this interest, and the ultimate liquidation of the principal, a special tax has been levied of five cents on each hundred dollars in value of the taxable property of the State, which is to be collected annually, until the bonds are paid or redeemed. In addition, a regular tax of two cents, and in 1863 and thereafter of five cents is levied for reducing the State debt, making in all, for the years 1861 and 1862, seven cents, and for the year 1863 and thereafter, 10 cents on each one hundred dollars' valuation of taxables in the State applicable to the reduction of this loan. The Legislature also, at its last session, pledged for the redemption of this loan, in addition to the tax levy, whatever may be received from the General Government in the way of reimbursement of the moneys advanced by the State for war purposes—this fund, it is expected, will be Page 308 nearly sufficient to pay the debt. The same Legislature refused unanimously to pass any stay or stop laws interfering with the collection of debts.

The taxables of the State are of the value of four hundred and fifty millions. Under the amended general banking law of the State, the basis of circulation is confined to the Indiana State and Federal stocks.

The State of New Jersey at its session in May passed laws for raising a six per cent, loan of $2,000,000, the bonds to be redeemable after 1865, at the rate of $100,000 per annum; and a State tax of $100,000, to raise four new regiments, to purchase arms, artillery, and munitions of war; to pay the families of volunteers $6, and to volunteers without families $4 a month extra; to authorize the cities of Trenton, Newark, Camden, New Brunswick, Jersey City, and Bordentown, to borrow money to aid the volunteers, were passed. New Jersey had previously no military. The State of Massachusetts issued a loan for $1,000,000, six per cent, per annum, and issued in denominations and redeemable as follows:

$200,000 in pieces of $100 each July 1,1871.

200,000 in pieces of $500 each July 1, 1872.

200,000 in pieces of $100 each July 1, 1873.

200,000 in pieces of $1,000 each July 1,1874.

200,000 in pieces of $1,000 each July 1,1875.

The bids ranged from 98 to 101 ½  per cent. All below par were rejected, amounting to $66,500. At par the bids reached to $598,000. Between par and 100.50 they reached $577,000. Above 100.50 they reached $16,000.

The Connecticut Legislature authorized a war loan of two millions of dollars, bearing 6 per cent, interest. The State had before no debts. The bids were opened for a portion of it July 21. A large share of the bids were at par, although many were given at an eighth premium, and in rare instances more. The banks offered a quarter of a million at par. The bidding would have commanded premiums, had it not been that the United States loan was pending, and with such rates of interest that the men who had the money at hand, were holding up for that which would give them a cent and a fraction additional every year. For the $800,000 offered July 24, $1,279,900 were offered at par to 5 per cent, premium.

The loan of the State of Maine was opened July 28, and the average rate was 1 per cent, premium.

The State of Illinois offered $1,000,000, interest at the rate of six per cent, per annum, payable semi-annually in New York, and the principal reimbursable after 1879. The bonds have coupons attached for $3 each, for each half year during which they have to run, and will of course be receivable for taxes and all other State dues at the Treasury. The bids in Wall street did not meet the views of the commissioner, and it was withdrawn. A considerable number of these small bonds were, however, subscribed for by citizens of Illinois, and the whole amount was thus taken at par.

The State of Michigan offered a war loan of $500,000, 7 per cent., redeemable after twenty-five years. The State of Iowa also created a loan. The Constitution of that State provides:

Article 7, Sec. 4. In addition to the above limited power to contract debts, ($250,000 altogether,) the State may contract debts to repel invasion, suppress insurrection, or defend the State in war, &c.

Sec. 5. Except the debts hereinbefore specified in this article, no debt shall be hereafter contracted bv, or on behalf of this State, unless such debt shall be authorized by some law for some single work or object, to be distinctly specified therein, &c. . . . But no such law shall take effect until, at a general election, it shall have been submitted to the people, and hare received a majority of all the votes cast for and against it at such election, &c.

The General Assembly, at its extra session, recognizing, probably, the existence of "insurrection"—the State having been called upon by the President to furnish its quota of troops to meet such a crisis—considered that the provisions in Sec. 4, above cited, warranted an increase of indebtedness without the sanction of a popular vote as required by Sec. 5, the contingency contemplated in Sec. 4 having arisen. A new issue of bonds was therefore authorized, amounting to $800,000, which, when sold, would make the entire bonded debt of the State about $1,000,000.

Objections seem to have been made to the legality of these new bonds; it was contended that the law should have been submitted to a popular vote, pursuant to Sec. 5; that Sec. 4 applies only when the State is invaded, or in case of insurrection within the State against its authority.

The negotiation did not succeed. But the same difficulty applies to some other State bonds which were successfully placed upon the market.

The State of Ohio, April 26, authorized a loan of $2,000,000 for war purposes, at 6 per cent., 7 years to run, and not subject to State taxes. The bids for the loan in New York were not satisfactory to the State, and as the General Government reimbursed the State at about the same time $1,000,000 for its advances, the low offers were not accepted. The loan was subsequently placed in Ohio.

The State of New York made a loan of $3,000,000, 7 per cent., which was negotiated 1.38 to 4.50 premium.

The State of Pennsylvania made a loan of $3,000,000, which was promptly taken. The bonds bear six per cent, interest, payable in specie—are payable after ten years—are not subject to taxation—of denominations not less than $25. Those less than $100 have coupons attached.

Pennsylvania also passed a State law, granting one year's stay upon all judgments, and all that might be obtained within six months from the passage of the act.

The contributions that were made by various public bodies up to the close of May were as follows: […].

Page 309

Confederate Finances—When the war broke out, the currency of the South was sound. The mints at New Orleans, Charlotte, and Dahlonega supplied a fair share of the coinage. Its banks held $36,000,000 in coin, and had emitted $82,000,000 of circulation. The merchants of the section were largely indebted to the North for goods sold in the usual course of trade on credit, and the supplies of produce were  generally good. The moment that hostilities commenced, discredit overtook the currency, and a disposition to hoard manifested itself. The currency of the suspended banks began to depreciate, and it was manifest that the new Government would encounter great difficulty in its financial movements. The debts of the Southern merchants were due at the North in specie, and foreseeing the depreciation in the current funds, many had hoarded specie, which soon disappeared almost entirely from circulation. If oil those funds were sent North in the discharge of debts, estimated to reach $200,000,000, it was clear that it would greatly enhance the financial difficulty of the Confederate Government at a time when, by reason of the blockade, the produce of the country, that in Page 310 ordinary times would realize $400,000,000 per annum, was no longer available. Hence it was determined that the Northern debts should not be paid. The following is the text of the act on this subject, passed by the Confederate Congress:

An Act to authorize certain Debtors to pay the Amount due by them into the Treasury of the Confederate States.

Section 1. The Congress of the Confederate States of America do enact, that all persons in any manner Indebted to individuals, or corporations, in the United States of America, (except the States of Delaware, Maryland, Kentucky, and Missouri, and the District of Columbia,) be and are hereby prohibited from paying the same to their respective creditors, or their agents or assignees, pending the existing war waged by that Government against the Confederate States, or any of the slaveholding States before named.

Sec. 2. Any person indebted as aforesaid shall be, and is hereby authorized to pay the amount of his indebtedness into the Treasury of the Confederate States, in specie or treasury notes, and shall receive from the Treasurer a certificate, countersigned by the Register, showing the amount paid, and on what account, and the rate of interest which the same was bearing.

Sec. 3. Such certificate shall bear like interest with the original contract, and shall be redeemable at the close of the war and the restoration of peace, in specie or its equivalent, on presentation of the original certificate.

Sec. 4. All laws and parts of laws militating against this act. be and the same are hereby repealed.

               HOWELL COBB, President of the Congress.

              Approved May 21, 1861.

           Jefferson Davis.

The Confederate Congress passed a law authorizing $100,000,000 treasury notes, payable six months after the ratification of a treaty of peace between the Confederate States and the United States. The notes not less than five dollars, to be reissuable at pleasure, to be received in payment of all public dues, except the export duty on cotton, and the whole issue outstanding at one time is not to exceed one hundred millions of dollars.

There were also issued bonds payable within twenty years, 8 per cent, interest, to the amount of $100,000,000, for the purpose of funding the treasury notes, or for the purchase of specie, military stores, etc. The bonds are not less than $100, except when the subscription is for a less amount, when they may be issued as low as $50.

Many of the banks had come forward with efforts to give the bonds currency, and the banks of Charleston adopted the following:

Resolved, That this bank will credit the Secretary of the Treasury with the sum of $1,000,000, at the rate of Bix per cent, per annum, secured by large treasury notes, and to be convertible into eight per cent, bonds of the Confederate States, at the option of the holders.

There was, for the special purpose of paying the principal and interest of the public debt, and of supporting the Government, a war tax of fifty cents upon each one hundred dollars in value of the following property in the Confederate States, namely: real estate of all kinds; slaves; merchandise; bank stocks; railroad and other corporation stocks; money at interest, or invested by individuals in the purchase of bills, notes, and other securities for money, except the bonds of the Confederate States of America, and cash on hand, or on deposit in bank or elsewhere; cattle, horses and mules; gold watches, gold and silver plate; pianos and pleasure carriages: the taxable property of a family, of value less than five hundred dollars, shall be exempt from taxation.

On the 3d of June the banks held a convention at Atlanta, Georgia. Delegates were in attendance from Tennessee, Georgia, South Carolina, Alabama, and Florida, representing soma twenty-six banking institutions.

Mr. G. B. Lamar, of Georgia, was chosen President, and Mr. James S. Gibbs, of South Carolina, Secretary.

After full discussion, the following resolutions were unanimously adopted:

Resolved, That this Convention do recommend to all the banks of the Southern Confederacy to receive in payment of all dues to them the treasury notes of the same on deposit, and pay them out again to customers.

That, until the said treasury notes can be prepared and issued, it be recommended that all the banks agree to advance to the Government, in current notes, such sums severally as may be agreed upon between them and the Secretary of the Treasury—the paid advance to be made on the deposit with the banks of treasury notes of large denomination, on eight per cent, stock bonds.

That all the banks in the Southern Confederacy are earnestly urged to take immediate action on the foregoing resolutions, as a measure of the greatest importance to the Government and the people, and communicate the same without delay to the Secretary of the Treasury, at Richmond.

That it be recommended to all the railroad companies in the Southern Confederacy to receive the treasury notes in payment of fares and freights.

That the Legislatures of the several States do make it lawful for their tax-collectors and other officers to receive the treasury notes in payment of all taxes and all other public dues.

That all the States, cities, and corporations having coupons payable in the city of New York or elsewhere in the enemy's country be requested, during the continuance of the war, to appoint some place of payment in the Confederate States, and to give their creditors notice of the same.

The convention adjourned to meet at Richmond simultaneously with the Confederate Congress, July 24.

On that day the convention again assembled, and it embraced representatives from all the principal banking institutions of the Southern States. It was resolved to take treasury notes in payment of dues, and to advance money for the use of the Government, until the treasury notes could be issued. Resolutions were also adopted approving of the course of the Confederate Government in vigorously prosecuting the war. The following resolutions were also adopted:

Resolved, unanimously. That it is the duty of the banks, capitalists, and property holders generally to give the Government all the support in money oud other means demanded by the war.

Resolved, unanimously. That it is the opinion of this meeting that the capital resources of this country arc abundantly adequate to supply oil the demands created by the war, and that this Convention will cheerfully contribute its aid to render those resources available to the people and the Government.

Page 311

The Confederate Congress enacted some of the recommendations of the banks, particularly that one requiring all of the interest on Southern securities to be made payable in the Southern States. The nature of these provisions is best illustrated by an example.

A prominent private banking house in New York, doing a large business as agent of foreign capitalists, on application to draw the interest on some Virginia inscriptions, owned abroad, were refused payment direct by the State authorities, with an announcement that the payment could only be made through some house in the Confederate States. Having some coupons belonging to the same foreign parties, which they proposed to collect through a correspondent in Richmond, they were furnished with the following list of interrogatories, as necessary to be answered before any collection could be made:

Interrogatories to be propounded to , who it claiming to draw interest on the certificates of State debt.

Are you the bona fide owner of the bond on which interest is now due, or from which this coupon was taken?

Were you such owner before the 26th day of June, 1861?

If not the owner of the bond, are you the bona fide owner of the coupon? If you are, were you such owner before the end of 26th of June, 1861?

If the owner of the bond or of the coupon, of what State or nation are you a citizen ?

If not the owner of the bond or of the coupon, in what right do you claim the interest? Give the name of the person or persons from whom you received the coupon, his residence, and business.

If you are the owner of bond and coupon, or of the coupon only, are you such by transfer, verbal or written?

If written, produce the written transfer.

If not a citizen of Virginia, arc you a citizen of either of the States of the Confederate States of America?

If not a citizen of the Confederate States, or either of them, are you a citizen of the United States as it now exists, or of any State adhering to the United States?

If claiming to collect for another, of what State or nation is that other person a citizen?

And now give a full, just, true, and perfect account and discovery of the right, title, and interest you have, and of the right, title, and interest held by the person or persons under whom you claim, and in like manner state whether such person or persons has or have any right, title, or interest therein in possession, reversion, or remainder, or whether the same is held by you or them in any manner to evade or circumvent the ordinance passed on the 26th day of June, 1861, in relation to the interest of the State bonds.

I do hereby solemnly swear (or affirm, as the case may be) that I have truly answered all the questions propounded to me in the preceding interrogatories, so help me God.

Sworn to before me this day of , 1861.

These are in some respects similar to the restrictions imposed by the Union Treasury Department on the coupons of the State of Texas, but which were not enforced, because opposed to public opinion.

The difficulty of obtaining means was, however, very great on the part of the Confederate Congress, and a scheme of loans in kind was projected, called the cotton and produce loan.

An issue of treasury bonds was authorized to be made in exchange for the proceeds of the sales of crops and other industry, and these are to draw interest at the rate of eight per cent, per annum.

The Government proposed to every planter and farmer to receive from him a subscription in advance of his crop of any portion thereof exceeding one hundred dollars in value, and to pay him in Confederate bonds when the crop should be gathered and sold. The illustration is simple: If there be subscribed 1,000 bushels wheat, 1,000 bushels corn, 1,000 bales of cotton, &c, or less, and the place of delivery specified, the proceeds when sold are received in Confederate 8 per cent, bonds.

The form of subscription is as follows:

Form of Subscription.

We, the subscribers, agree to contribute to the defence of the Confederate States the portion of our crops set down to our respective names; the same to be placed in warehouse or in our factor's hands, and sold on or before the first day of next; and the net proceeds of sale we direct to be paid over to the Treasurer of the Confederate States, for bonds for the same amount, bearing eight per cent, interest.

N. B.—The agent in charge of this subscription will fill the blank as to date oi sale, with the month best suited to the locality of the subscriber, in all cases selecting the earliest practicable date.

[Here follow name, post-office, and State, quantity subscribed, place of delivery, and name of factor or warehouse.]

The issues of paper by the Confederate Congress were received and paid out everywhere by the banks and people. As, however, gold was hoarded, and paper money was issued by States, towns, and cities in profusion, while there was little or no sale for the produce, all being blockaded, the paper frightfully depreciated. In August gold and silver were already 10 to 15 per cent, premium for current bills, and at New Orleans trade nearly came to a stand for want of change, until a state of barter threatened, and all dealers were forced to issue checks receivable in trade, as was the case in New York during the suspension of 1837. Towards the close of the year the depreciation of the paper reached nearly 60 cents on the dollar, and neither the taxes, the cotton loan, nor the investments of Northern debts sufficed to stay the downward tendency. Nothing but raising the blockade, and permitting the realization of the vast wealth of the section in produce could restore the finances.

Failures.—The political events of the year could not but produce the most disastrous influences upon the outstanding credits which represent the commercial business of the country. But this influence was modified by two leading circumstances. One was that the panic of 1857 had weeded out, so to speak, the weakest of the houses, while in November, 1860, when affairs became threatening, the fall trade was passed, stocks of goods on hand were light, and there was little effort to prepare for a large spring business. Hence the payments due in the spring were, to a considerable extent, realized before

Page 312

FAILURES IN THE UNITED STATES FROM 1857 TO 1861.

This page contains a Chart. […]

Page 313

non-intercourse took place. The number of persons doing business is pretty accurately recorded by the mercantile agency of Dun & Company, whose agencies extend all over the Union. [In the foregoing table the failures in the Southern States (with the exception of the cities of Baltimore, Louisville, and St. Louis, the State of Delaware and District of Columbia, which embrace the entire year) are shown to 1st May only.]

[…]

In the Southern States, the number of failures for the entire year of 1857 was 675, with an indebtedness of $25,932,000, while the partial returns for the year 1861 reveal 1,058 failures, with liabilities amounting to $28,578,257, although the returns from the seceded States embrace a period of only four months, or up to May 1st, when the regular facilities were interrupted. The unusual amount of failures in that section during these four months, is to be accounted for mainly on the ground that many were intentional, in order to evade obligations due at the North. Subsequent State action, annulling all Northern claims; the entire cessation of trade; and the impoverished condition of the South, led to the fear that the entire indebtedness of that section would be swallowed up in carrying on the war: involving a general mercantile bankruptcy there. The amount of the mercantile indebtedness of the South to Northern merchants, by a very close examination of the books, confirmed by other sources of information, appears to be to the four cities of New York, Boston, Philadelphia, and Baltimore, about $211,000,000, divided as follows:

New York ……………$159,800,000

Philadelphia. ……………24,600,000

Baltimore ……………….19,000,000

Boston ……………………7,600,000

In the dry goods interest alone in these cities estimates show that New York loses $75,000,000; Philadelphia, $14,000,000; Baltimore, $6,500,000, and Boston $2,000,000; making a total indebtedness to the dry goods trade of $97,500,000. From this and other data, the total liabilities of the South to the Northern States are estimated at nearly $300,000,000.

The cutting off of such an amount of present means was a severe blow to Northern dealers, and it is matter of surprise that so few failures took place in proportion to the whole. The average liabilities of the Northern failed firms appear to have been about $30,000; if the liabilities of the whole number in business are as large, then the aggregate of Northern liabilities is $5,167,110,000, and it is quite probable that the sum of outstanding credits much exceeds this amount. In New York City, 980 firms failed, owing nearly $70,000 each, and there are 19,127 still in business that probably owe as much, which would give $1,338,890,000 of credits. (The American Annual Cyclopaedia and Register of Important Events of the Year 1861, vol. 1. New York: Appleton & Co., 1868, pp. 295-313.)


Source: The American Annual Cyclopaedia and Register of Important Events of the Year, 1861-1865, vols. 1-5. New York: Appleton & Co., 1868.