mber
I was able to say in my annual report that the debt had been diminished
during the next preceding year in the sum of ninety-four million
dollars, and that the total decrease from March 1, 1869 to December 1,
1871, was over two hundred and seventy-seven million dollars.

It was in this situation of affairs that Messrs. Jay Cooke & Co.
proposed to undertake the sale in London, by subscription, of one
hundred and thirty-four million five per cent bonds then unsold.
Authority was given to Cooke & Co. to proceed with the undertaking,
and when the books were closed, September 1, I was informed that the
loan had been taken in full. By the terms prescribed by Cooke & Co.,
the subscribers deposited five per cent as security for the validity
of their subscriptions. The bonds were to be delivered the first day
of December.

Upon the receipt of the information that the undertaking had been a
success, the bonds were prepared, and the Hon. William A. Richardson,
then an assistant secretary of the Treasury, was designated as the
agent of the department for the delivery of the bonds. The bonds were
placed in safes, on each of which there were three locks. The clerks
were sent over in different vessels, and the keys were so distributed
among them, that there were not keys in any one vessel by which any
one of the safes could be opened.

The success of the subscription gave rise to an unexpected difficulty.

At that time there were outstanding one hundred and ninety-four million
ten-forty United States bonds that carried interest at the rate of
five per cent.

It was a singular coincidence, and a coincidence probably not due to
natural causes, that some five per cent bonds, having fifteen years to
run, should be at par, and that other five per cent bonds that might
run thirty years should fall below par in the same market. In the
three months from August to December, these ten-forties were quoted
as low as ninety-seven, or even for a time at ninety-six. Cooke became
anxious, if not alarmed, lest the rate should fall below ninety-five,
and consequently lest the subscribers should refuse to meet their
obligations. Early on the morning of the first Monday in December, I
received the information that the bonds were taken as soon as the
offices were open. I may mention in passing that Cooke & Co. paid for
the bonds as they were delivered, either in coin or in five-twenty
bonds.

As bonds were taken, and as payments were m