two years five per cent. Coupon Treasury Notes, allowing accrued interest; and to receive such Temporary Loan Certificates in payment of Loans at par and accrued interest. When such Loan Certificates are issued to any of the Associated Banks you will, if desired, issue them in the form of Clearing House Certificates; and will require no previous notice when offered in payment of Loans to the United States. Payment of Clearing House Certificates, not offered in payment of Loans, will be made in Legal Tender Notes or Notes of National Banks redeemable in New York. S. P. CHASE, Signed, JOHN J. CISCO, Assistant Treasurer, New York. Secretary of the Treasury. Thus the legal-tender notes were made available, principal and interest, for the loans, and the deposit certificates were made payable in legal-tenders or in the notes of the National Banks, redeemable in New York, which was the same thing, as they must be redeemed in legal-tenders. This arrangement, was undoubtedly a good one, both for the banks and the government since the former would be compelled to pay their depositors the 5 per cent legal tenders, if they took the loan, and as these notes are only a tender for their principal, the banks would lose the accrued interest. By depositing them now, at par and interest, they secured the latter to date, earned 6 per cent on the certificate until the loan is awarded, and then hand the certificate at par and interest over to their deposi tors who may have subscribed, to pay in for their subscription. The bids for the new loan were opened on the 15th, and they ranged from 984 to 108, the average being about 104. The average prices of this stock greatly disappointed the Treasury. A seventeen year six per cent stock should bring 1124 to be equal to a five per cent stock at par. Hence, when the bids only reached an average of 104, the prospect became very gloomy for those who had ventured upon the five per cent stock. The bids below 104 were rejected, and the whole amount bid may be analysed as follows: The rejection of the bids under 104 was regarded as a very unwise measure, for the reason that the Treasury is, and must continue to be, a large borrower, and that the rate of money must necessarily fix itself in the open market. It cannot be determined by the operations of the Treasury. This had indeed been done, heretofore, by means of the emission of paper money, which caused a nominal decrease in the rate of interest for paper, but an actual increase as compared with the value of capital. The new loan was deemed to be the inauguration of a new or reverse policy, by which the circulation was to be reduced and paper values diminished; on this ground, with the known fact that an immense amount of money is still to be borrowed, by numerous loans, it is, apparently a most hazardous experiment to reject offers made in open market. Through all these movements of the Treasury money continued very abundant, after the payment of the June interest on the five per cent legal-tender notes, which interest amounted to about $3,000,000. There was very little demand for money in the open market, beyond what arose from the contractors, and other dealers with the government for discount. The stock market remained very quiet, and required little money for its transactions. The general course of business has been for cash, and the progress of the Spring trade, by turning goods into money, tends to increase the abundance. The rates of the government stocks and the price of gold were as follows: The fall in the stock market at a time when gold was a rapidly rising value, produced an actual decline of about two per cent in the value of the stocks upon the market as valued in gold. The operations of general business continued very active, and prices of most commodities rose rapidly on account of the large circulation of paper money, and the operation of new tariff, which, with the rise in gold, greatly enhanced the cost of all imported goods. Domestic manufactures also have been stimu. lated to an extraordinary extent by the rapid rise in the price of raw cotton, which advanced from 81 cents, May 10, to $1.50 June 18. This enormous rise carried up the prices of all raw material and textile fabrics. The disposition to buy goods was strong and the imports continued to be large, involving active remittances, which were not well supplied by corresponding exports of produce. This aided the demand for gold, of which the movements was as follows: 3,540,550 19 249,514 1,201,907 281, 04 1,050,156 875,101 473,385 273,429 158,437 629,855 465,920 20,750,495 62 a 69 88,881 21,059,512 62 a 62 273,900 20,425,504 691 a 70 168,912 19,527,665 634 a 681 607,059 802,844 345,471 20,924.287 67 a 71 269,522 1,002,384 8,226,000 21,687,670 71 a 89 24,868,203 72 a 79 235,364 Total..... $6,901,774 $18,904,954 $6,319,612 $27,137,651 The demand for bills was good, and the chief dependance was upon gold, but the market for both was much affected by the threatened passage of the gold bill that was introduced some months since into the Senate by Mr. SHERMAN, and of which we made a notice in the May number. The bill finally passed, and was signed June 20. [It will be found in another column.] Its features are of a most extraordinary character; it forbids sales of exchange for specie at more than ten days time, at any place except the individual office of the banker, and empowers such restrictions as compelled the leading bankers, on its passage, to suspend business, since they could not tell in how far they might be exposed, not simply to the danger of infringing on the law, but to the complaints of the spies, pimps, and informers, called into being by the enactment which bestow upon them half the fine, and who could prefer charges on the slightest pretext, for the purpose of levying black mail. The law also, by limiting the time within which a contract for exchange might run, cut off a large amount of ordinary shipping business done in New York for western account, and which, in the usual course of business, required at least fifteen days, to perfect arrangements between Chicago and New York. These difficulties, of course, caused a rise in both exchange and gold. A large and earnest meeting of bankers and merchants was held at the rooms of the Chamber of Commerce, for the purpose of securing the repeal of the act if possible. The committee appointed at the meeting went to Washington, and the Treasurer put such construction on this gold bill as to relieve it of many of its bad features. The bill had, as we have stated, caused a perfect dead lock in the foreign exchange business, on account of the provisions above referred to. It is well known that a very large proportion of the ordinary business payments of the people of this country, and of every civilized commercial community, are, in modern times, settled by certified checks, and similar financial expedients. To forbid the use of these certified checks, in any important department of legitimate business would be attended with the most disastrous results, both to the enter prise of private individuals, and to the credit of the public Treasury. The construction given to the bill on this point, by the Treasury Department, will be found in the following communication from the Secretary : Treasury Department, Washington, June 27, 1864. JOHN J. CISCO, Assistant Treasurer, New York: I transmit an opinion of the Solicitor of the Treasury upon certain questions under the gold act, and concur in his opinion. SIR: S. P. CHASE, Secretary of the Treasury. Treasury Department, Solicitor's Office, June 27, 1864. I have the honor to acknowledge the receipt of your letter dated to-day, submitting to me the following questions: The act to prohibit certain sales of gold and foreign exchange, approved June 12th, 1864, requires payment in full of the agreed price of gold or bullion purchased on the day on which the contract is made in United States notes or national currency, and not otherwise. Can such payment be made by check for the amount of the purchase money in United States or national currency; or can it be made only by manual delivery of the notes or currency by buyer to the seller? Second-The same act prohibits contracts for the purchase or sale and delivery of foreign except on conditions of immediate payment in full of the agreed price thereof on the day of delivery in United States notes or national currency. Would a payment for such exchange in gold coin of the United States be valid or otherwise? In reply to the first inquiry, I have to say that I have no doubt that the delivery of a bona fide check for the amount of the purchase money, in United States notes or currency, drawn against such notes or currency, actually at the present credit of the drawer, and which if presented immediately would be so paid, is a payment within the meaning of the act. In regard to the second question, my opinion is that a payment for exchange in gold coin of the United States is a legal and valid payment. I have the honor to be, with high respect, EDWARD JORDAN, Solicitor of the Treasury. To Hon. S. P. CHASE, Secretary of the Treasury. On the strength of this opinion, the bankers who had before refused to engage in any transaction liable to objection under the gold act, ventured cautiously forward, and this aided in quieting the public excitement on this subject. The Solicitor does not say, in terms, that exchange may be sold for a bank check, but this is a plain inference from his opinion. We have never had any doubt that gold may be paid in purchase of anything which may be sold, because it is a legal and constitutional currency, and no law can prohibit the use of it. But we have no question that the framers of the gold bill intended to prohibit the use of gold in mercantile transactions. Such prohibition would be void in the higher courts, and we are glad that the restriction is not to be attempted. The threat of a certain speaker, at the meeting referred to above, of the Chamber of Commerce the other day, made in behalf of the government, that it intended to force all persons in Wall street to use greenbacks for all transactions, and if the present law does not accomplish this, the government would try an act twice as strong, and, if that failed, one three times as strong, it is now seen, was without any authority from Washington. The threat, and indeed the whole tenor of the speech which contained it, fell unpleasantly upon the ears of those who had assembled at the Chamber, and the impression thus made will not soon be eradicated. The gold bill was finally repealed, by a vote of 24 to 13 in the Senate, and 88 to 29 in the House, June 30; the same day Mr. CHASE resigned. The rates of exchange have been as follows: ........ 66 11, 215 a 218 66 18, 216 a 219 2:64 a 2.88 The demand for bills became more urgent after the passage of the gold law, notwithstanding more sales of exchange had been made, on the part of the Treasury, against gold shipments to England from San Francisco. In our last number we showed that $5,000,000 had been so shipped in February and March, and official returns of the gold in the federal Treasury were as follows: Washington. Philadelphia. San Francisco New Orleans. Baltimore.. Buffalo Cincinnati. Louisville Pittsburgh.. Chicago. Detroit Total....... ..... $19,578,379 93 $24,697,839 21 $5,124,459 28 The operation of the new tariff, adding 50 per cent to the duties after May 1, had the effect of causing the withdrawal of a large amount of goods from warehouse, and to draw a corresponding amount of gold into the Treasury. The amount in San Francisco was raised to over $7,000,000, and of this a further amount of $2,000,000 was shipped secretly to London, making $7,000,000 in all to sell bills against. |