e sub-treasury act of 1846, to receive notes of state banks and
was required to receive into and pay from the treasury only the
coin of the United States; but by the act of August 5, 1861, he
was permitted to deposit to the credit of the Treasurer of the
United States, in such solvent specie-paying banks, as he might
select, any of the moneys obtained from loans, the moneys thus
deposited to be withdrawn only for transfer to the regularly
authorized depositaries, or for the payment of public dues, including
certain notes payable on demand, as he might deem expedient. He
had, however, no authority to receive from individuals or banks
any money but coin.

The coin received from the Boston, New York, and Philadelphia banks,
in payment of their subscriptions to the government loans, to the
amount of nearly $150,000,000, had to be sent to every point in
the United States to meet public obligations, and, when thus
scattered, was not readily returned to the banks, thus exhausting
their resources and their ability to loan again.

The demand notes, authorized by the act of July 17, 1861, were also
paid out by the treasury; but from time to time were presented for
redemption in coin or in payment of customs duties to the exclusion
of coin, and thus both the banks and the government were greatly
crippled, the banks suspending specie payments on the 30th day of
December, 1861.

At this time an army of 500,000 Union soldiers was in the field,
and a powerful navy, with vast stores of artillery and ammunition,
had been created. In providing for their sustenance, comfort and
equipment the government had been obliged to incur expenses far
exceeding in magnitude any which had been hitherto known in its
history, aggregating nearly $2,000,000 per day.

It was apparent that a radical change in existing laws relating to
our currency must be made, or the government would practically be
unable to make the current disbursements on account of the war,
and the destruction of the Union would be unavoidable, notwithstanding
the immense resources of the country which had then hardly been
touched.

The annual report of Secretary Chase reached Congress on the 10th
of December, having been delayed by the press of business. So much
of it as related to the currency was the basis of the long debates
that followed. The circulation of the banks of the United States
on the 1st of January, 1861, was reported at $202,000,767. Of this
$152,000,000,