duties on imported
goods and interest on the public debt. Additional 10-40 bonds were
authorized by the act of June 30, 1864. But it may be said that
the 5-20 and 10-40 bonds became the well-known, recognized securities
of the United States, the sale of which at par, in connection with
the treasury notes of different forms, furnished the United States
the money to carry on the war. In the sale of these securities
the secretary was actively assisted by the banks and bankers of
the United States, and especially by Jay Cooke, who was the most
effective agent of the government in the sale of 5-20 bonds.

Secretary Chase, in his report of December 10, 1863, discussed at
length the objects to be kept studiously in view in the creation
of debt by negotiations of loans or otherwise: First, moderate
interest; second, general distribution; third, future controllability;
and, fourth, incidental utility.

The first loans were made upon the extravagant rate of interest of
seven and three-tenths per cent. The reason for this was the fact
that there was no currency the secretary could receive in exchange
for bonds. As already stated, specie payments were suspended by
the banks December 31, 1861. He was forbidden by law to receive
bank bills, and he knew that Congress would not and ought not to
repeal this law. After such suspension coin was scarce and difficult
to obtain. Afterwards, when the legal tender notes were authorized
and issued, he sold his bonds bearing six per cent. interest at
par for notes, but these notes had already largely depreciated
compared with coin. Still, they were money, readily taken for all
supplies, and enabled him to sell securities running a shorter
period. A diversity of securities maturing at different times were
exchanged for notes, and finally he was able to sell five per cent.
bonds at par, so that, on the 30th of September, 1863, two months
previous to his report, securities and notes then outstanding
amounted to $1,222,113,559. The fist bonds were irredeemable for
twenty years. The second bonds were redeemable in five, but payable
in twenty, years. The third bonds, bearing five per cent. interest,
were redeemable after ten years. It will be perceived that under
this arrangement the rate of interest on securities issued was
constantly reduced. The notes received in payment of bonds
depreciated or advanced in sympathy with the progress of our armies
and the prospects of success. Th