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reaus, viz.: the Secretary's, First Comp- with the certificates of deposit and the troller's, Second Comptroller's, Com- books. Thereupon the certificates of missioner of Customs, First, Second, deposit are cancelled to prevent their Third, Fourth, Fifth, and Sixth Audit- use again, and the cancelled certificates or's, Treasurer's, Register's, Solicitor's, and bonds are returned to the Register, Comptrollers of the Currency and of who issues the latter to the public Internal Revenue, Statistics, Court Sur- creditor. The legal-tender notes, comvey, and Light-Houses. Of these the monly called “greenbacks,” are Auditors and Comptrollers are engaged graved and printed in New York by the in examining accounts of receipts and American and National Bank-Note Comexpenditures, the investigation and de- panies.* The notes are forwarded by escision by the Auditor being prelimi- press to the Secretary, delivered to the nary, and by the Comptroller final. Chief of the Currency Bureau, there Three Auditors and one Comptroller are counted, separated, trimmed, examined, occupied with military and naval ac- and delivered to the Treasurer, who credcounts, and the like force with the civil. its them in his accounts, and he becomes Every payment is authorized by the debited on the books of the Register. Secretary only after its propriety has They are paid to the public by the been certified by an Auditor and Comp- Treasurer. No money is received into troller.' Accounts of all receipts and or paid from the Treasury except on expenditures are kept by the Treasurer, the signature of a Comptroller, the the Comptroller, the Register, and the Register, and finally of the Secretary Secretary, but most fully by the Reg. himself. All moneys are received and ister. Collectors and Receivers account certificates of deposit are issued by the weekly, monthly, and quarterly, accord- receiver as deposited to the credit of ing to the amounts of their collections. the Treasurer, and paid by checks on They are brought to account in cases the depositaries. In conducting the of delay by the Comptroller and So- Treasury, there is no alternative but to licitor of the Treasury. The functions exempt the Secretary from responsibilof the other Bureaus are suggested by ity for the countless millions which go their titles. Each of these Bureaus is through his hands, or to pass every further divided into divisions, of which dollar under his eye. The latter course, the Secretary's comprises the following: the only one involving actual safety to “Of Warrants," " Appointments," "Cur- either the Secretary or the people, inrency,” “ Redemption," " Loans," " Cap- volves a great deal of drudgery in the tured and Abandoned Property," “Reve- mere reading and signing of papers, in nue-Tariff," "Revenue-Marinc,” “Remis- which a single erroneous signature sion of Forfeitures,” “Fines and Pen- might cost the country thousands of alties,”

," "Internal Revenue Law," " In- dollars, and the Secretary his honor and ternal Revenue Finance," " Customs, position. By no amount of organiza" Administration, and Warehousing," tion, therefore, can the Secretary avoid “Steamboat-Inspection," “Shipping and the vast drudgery essential to the mereConsular Correspondence,” “Supervis- ly honest performance of his duties. ing Architect," " Recording and Library Only after this labor has been performed Documents and Files,” and “Printing.” can he give attention to the appoint

In effecting loans, the money loaned ment and removals of his 16,000 subis deposited to the credit of the Treas- ordinates, and to the myriad questions ury. Upon the certificates of deposit of law, expediency, method, and detail, the Register fills out the bonds, which which come up to him from every city since 1863 are printed in the Printing Division of the Secretary’s Bureau, and * In the printing of notes by these Companies, sends them to the Loan Branch of the

whether for our own Government or for the vari.

ous European and American nations which they Secretary's office, where they are re- have furnished with a paper currency, no instanoo corded, countersigned, and compared of loss has ever occurred.

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him as a

and village in the land in swarms like there completed his legal studies. Havthe flies of Egypt into the palaces of ing long previously resolved to make Pharaoh, for his assignment, considera- his home in the West, he left Boston in tion, and decision, and finally to those April, 1833, and in June following ar: great and unprecedented questions of rived in Fort Wayne, Indiana, then politics, political economy, and finance, a frontier trading-post, described by wherein he is often expected to agree

mere dot of civilization in with the less informed, to ignore ob- the heart of a magnificent wilderness." stacles which he knows to be insur- About that time, however, it began to mountable, to dash after results without grow rapidly, and is now the second the means of attaining them, and to city in the State. drop the unattractive but essential sub- In the Fall of 1835 he was invited, stance for the more alluring shadow. though a young man with little experi

No Secretary of the Treasury has ence in business, to organize and take enjoyed larger opportunities than Mr. the management of a Branch of the McCu och for a thorough and practical State Bank of Indiana, at Fort Wayne. education in finance before entering He accepted the offer without intending upon his office. He is of Scottish fa- to abandon his profession, but in a few mily, as his name indicates, and his months became so interested in bankpersonal habits and financial views are ing, that he determined to make it his of the Scottish-American pattern. He permanent business.

In 1836 he was aims to succeed through patient labor, elected a Director of the State Bank, economy, cautious, prudent calculation, and he continued to be the Cashier and and strict honesty, rather than by bril- manager of the Branch, and a Director liant strokes of genius.

of the Bank, until the expiration of the His grandfather, Adam McCulloch, charter, in 1857. The great success of emigrated from Dornoch, Scotland, and that admirably conducted banking insettled in Arundel, Maine (now Kenne- stitution was very largely the result of bunk Port), about the year 1765. He his financial conservatism and ability. was a fine scholar, and, like so many of In 1856 a new bank, known as the the Scotch, was thrifty, hospitable, Bank of the State of Indiana, was charclannish, and of most excellent humor. tered, with twenty branches, and an As a merchant he acquired a handsome authorized capital of six millions of fortune. His father was likewise a dollars. Mr. McCulloch was, by the merchant, and, at the commencement of unanimous vote of the Directors, elected the war of 1812, was one of the largest President. Under his skilful manageand most enterprising ship-owners in ment, aided by the best financiers in New England. The war, with the re- the State, this Bank took high rank strictions it involved, swept away his among the large banking institutions fortune in its general havoc of com- of the country. It maintained specie mercial interests. About the time his payments during the trying periods of father's embarrassments commenced, Mr. 1857 and 1861, and until its branches McCulloch was born, and he received were merged in the National Banking only the advantages of an academical System, it was one of the strongest (if education, and of a little more than a not the very strongest) and most wisely single year at Bowdoin College. Leav- conducted Banks in the United States. ing college in his sophomore year, then The bill providing for a National seventeen years old, he engaged in Currency through the agency of Nationteaching, and continued to teach until al Banks, became a law in February, 1829, when by close economy he bad 1863. In April of that year Mr. McCulsaved enough to enable him to read loch was requested by Mr. Chase, the law. He commenced the study of law Secretary of the Treasury, to become in Kennebunk, his native town, whence the Comptroller of the Currency, and he removed, in 1832, to Boston, and to undertake the very difficult task of


organizing a National Currency Bureau, announced his policy to be, 1st. To and bringing the banking institutions raise by loans the money necessary to of the States under the national bank- pay the soldiers of the great Union ing law.

The request was promptly army, and all other demands upon the complied with, although the acceptance Treasury; 21. To fund all obligations of the office involved a large sacrifice as they should mature into gold-bearof income and of comfort on the part ing bonds; 3d. To contract the currency of Mr. McCulloch. The ability with steadily, on the theory that its depreciawhich this task was accomplished was tion was due in great part to the excesrecognized and appreciated by the sive quantity in circulation, until its bankers and business men throughout value should advance to par with gold, the country, and, in connection with thereby restoring the government and bis previous experience as a banker, the country to specie payments, and had great weight with the press and turning the people from speculation and people in influencing them to urge gambling, with all their unhealthful upon President Lincoln his appoint- immoral tendencies, back to legitimate ment as Secretary of the Treasury. industry and business, with the blessings

This office came to him almost by which attend them ; 4th. To keep the necessity, as the consequence of his public revenues sufficiently in excess of banking experience and his familiarity the expenses to enable him to derote with finance. Mr. Fessenden, talented $200,000,000 per annum toward paying as he is, bad accepted with reluctance, the principal and interest of the nationand held with hesitation and diffidence, debt, thereby securing the payment the reins of the Treasury. Mr. Chase, in of the debt in less than a third of a whose great abilities enthusiastic con- century. Whatever adverse criticism fidence was felt by a very large party, the carrying out of these views subsehad been transferred to a higher but quently provoked, they received, when less difficult and arduous position. Mr. uttered, the general assent of the people, Cisco, who had been in charge of the as well as the special concurrence of Sub-Treasury at New York, and whose Congress. Though the masses of the practical acquaintance with banking people are not versed in finance, yet it and finance was second only to that of is one of the characteristics of a repubMr. McCulloch, was the leading name lican government that, even in finance, mentioned in Eastern circles for the no policy can be maintained which position. Mr. McCulloch, as Comptrol- the masses of the people cannot comler of the Currency, already presided prehend and approve. Mr. McCulover a leading bureau of the Treasury, loch has been held to account because and was most familiar with the work- some $800,000,000 of 7.30s and $600,ings of the entire department during 000,000 of other securities due in '66, the two last years of the war. His '67, and '68, and bearing interest at 7,8 antecedents, experience, and character, per cent. in currency, have been funded combined to present him as the most into Five-Twenty bonds bearing interest able and available successor of Mr. Fes- at 6 per cent. in coin. It is argued that senden. The Western press and people, as coin has maintained from the year led by the Chicago Tribune and the '65 to the present time an average preLegislatures of Indiana, Illinois, and mium of 40 per cent. over currency, the other Western States, by resolution six per cent. coin interest has been spontaneously concurred in praying for equivalent to at least 8;4interest in his appointment. President Lincoln, as currency, and this increase of 11's per was his wont, bowed to the popular cent. interest in currency has thus far demand, with which his own judgment increased our annual interest by at least fully agreed.

$10,000,000. By lessening the utility On Mr. McCulloch's accession to the of currency in paying the national inoffice of Secretary, in March, 1865, he terest and increasing the necessity for

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gold, it has depreciated the former and interest-bearing notes, i. e., a less conenhanced the latter, thus increasing that venient form of currency for one far premium on gold which is a practical more convenient. They point, in supobstacle to specie payments. It is true port of the dependence of currency for that when we return to specie payments its value on the bonds, to the fact that our interest will have been diminished the bonds and currency, whether at par by the funding of the 7.30s, but thus with gold as in 1860, at 40 per cent, as far it has been increased. To all such in 1864, or at 78 per cent. as now, have criticisms it may fairly be replied, that always fallen and risen pari passuthe the 7.30s ran for so sbort a time, that bonds being worth only as much more had they not been funded their holders than currency as was caused by their would long ere this have been demand- interest-bearing quality. While these ing their payment. And as the Govern- views have great plausibility, if not ment was clearly unable then to pay, force, their advocates will hardly claim either in gold or currency, nearly one that a bond for a large sum, due with half of the national debt, it was neces- interest at a distant day, has all the feasary to fund them into bonds, and none tures of currency which belong to notes more favorable were authorized or pos- for small sums, payable on demand sible than the 5.20s. Moreover, the Act without interest. As the ready exof Congress made them convertible, at changeability of the security increases, the pleasure of the holders, into 5.20s; its liability to be used and classed as a and though the Secretary executed the currency increases. Evidently, the conlaw, he cannot be held responsible for version of the whole national debt into a policy laid down for him by the currency would vastly increase its dehigher authority of Congress. The Sec- preciation, and probably would reduce retary's policy of contraction of the cur- its value to a merely nominal figure, like rency was at first endorsed by Congress, that attained in 1863 and 1864 by Conand was regarded for a time as the very federate notes. It is undeniable that test of soundness in finance.

It was

the existence of a given amount of the subjected to only a partial trial, and the national debt in the form of non-interestcurrent of opinion soon set so strongly bearing notes, tends far more to depreagainst it, as a means of restoring specie ciate public credit, enhance the premium payments, that it was overruled by on gold, and delay a return to specie Congress, and the Secretary, though payment, than would any amount of adhering to his original views, obeyed debt invested in long interest-bearing the voice of the people's representatives. bonds. So far, therefore, the violent The opponents of contraction have been assaults on the theory of contraction more successful in thwarting the policy have bred distrust, but have failed to than in agreeing upon the grounds for vindicate the absolute denial of its its defeat. Its more ultra opponents efficacy. urge that the theory of contraction is Other opponents of contraction allege defective at the outset, in that it as- that, after business has adapted itself to sumes that the value of the currency a certain volume of currency, no matter depends on its volume merely, whereas what that volume may be, it is as great its value, they argue, depends on that an evil to contract as it was to expand of the entire bulk of the national debt. it; that business requires chiefly perma

Paper currency has been defined by nence, and that specie payments should some economists as transferable debt, be resumed by authorizing all contracts since all transferable debt may be used to be made in gold or depreciated paper, as a means of payment and therefore as as parties prefer, and all courts of law a currency. Hence, in the view of such, to recognize the difference of value. the only true contraction is the payment This, it is thought, would lead to the of the debt, and any other only substi- gradual substitution of the gold standtutes interest-bearing bonds for non- ard for the paper, reducing the sums


named in outstanding debts payable in of England is $25 per capita, and that currency, to the sums in gold which said of France $30 per capita, though about debts are actually worth. This would half of the former and seven eighths produce resumption, without swelling of the latter are specie. He attribthe burden of debts contracted in cur- utes our eras of expansion and specularency, worth only 40 or 78 cents per tion to the excessive discounts and de dollar in gold, by compelling the debtor posits of the banks, contending that to pay them in currency worth 100. these are the most fruitful sources of Undoubtedly, the popular objection to expansion, and that they, rather than resumption now lies in the hostility of bank-notes or Government-notes, conthe debtor-class to having 40 per cent. stitute a currency which needs check, added to the burden of their debts, by regulation, and limitation. On the contracting to that extent the currency other hand, Mr. McCulloch, in his Rein which they are to be paid. The diffi- port for 1865, elaborately argues that culty lies, not in resumption by the Gov- the expansions in bank deposits and ernment, but by the people. It would be discounts, which led to the crises of of no use to make their paper currency 1837 and 1857, were preceded by correworth 40 per cent. more than their sponding expansions in the bank-note private debts, for they could not afford circulation, and that the inflation of to use it as a means of payment any notes occasioned the inflation of deposits more than they can now afford to use and discounts, the underlying cause of gold. In the event of a contraction both being our overtrading with Euthat would carry greenbacks to par rope, and the enormous credits, and with gold, their private debts would delay in settling the balances to which therefore go unpaid, and would soon this overtrading gave rise. constitute an inferior currency, over The policy suggested by Mr. McCulwhich the greenbacks would bear a pre- loch, in 1865, for paying the debt in mium. In short, contraction would "de- thirty-two years, was exceeded during monetrize” greenbacks, as it has gold, the years '66 and 67, in which one tenth and leave the people without a currency

of the entire debt was paid off. Indeed, corresponding in value to their money if we include the unliquidated portion of account and exchange, except in so of the debt incurred at the close of the far as they should make one for them- war for back pay, bounties, pensions, selves, by substituting private notes for transportation, etc., with the amount for those of Government. Without agree- which bonds were issued, our entire (leht ing with all these premises, Mr. Mc- outstanding on June 1st, 1865, was more Culloch strongly favors the policy of than $3,300,000,000, and our entire payAuthorizing gold contracts, and of taking ment on account of it exceeds $830,000,such legislative measures as will cause. 000, or more than a fourth of the princicontracts, now payable in currency, to pal. The strain on the taxpayers, howbe changed upon terms equally just ever, was deemed excessive, and during between debtor and creditor, to con- the present year the revenue is intended tracts payable in gold at the reduced to barely equal expenditures. Under this figures. He thinks this would promote relaxation the country will probably so returns to specie payments by a mode far recover its financial health and tone which, if the law were properly guarded, as to resume the payment of its debt could not be made oppressive to the within a year or two at most, and the debtor-class, while it would be entirely average rate of payment will vary but acceptable to creditors. Still other op- little from the Secretary's estimate. In ponents of contraction--at the head of his Report for 1865, the startling fact is whom stands that eminent American advanced that the usual products of our economist, Henry C. Carey-asserts that industry exceed 25 per cent. upon the our entire note-currency amounts to only total values of the real and personal $20 per capita, while the entire currency estate of the country, and that his pro

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