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FINANCES OF THE UNITED STATES.
Extracts from the Annual Report of the Secretary of the Treasury, December, 1848.
TREASURY DEPARTMENT, December 9, 1848. In obedience to law, the following report is submitted :
The receipts and expenditures for the fiscal year ending June 30, 1848, wereFrom customs,
$31,757,070 96 From Public Lands,
3,328,642 56 From Miscellaneous sources,
351,037 07 From avails of Loans and Treasury Notes,
56,693,450 59 1,701,251 25
58,394,701 84 58,241,167 24
Leaving a balance in the Treasury July 1, 1848, of,
I renew my recommendations contained in all my annual reports for the establishment of a branch of the mint of the United States at the city of New York. That city, our great commercial metropolis, is advancing to its ultimate position, so important to the whole country, as the emporium of universal commerce, the centre of international exchanges, and the storehouse of the products of the world. To attain this result, we must secure for our great emporium in competition with foreign cities) the command of her due proportion of coin and bullion. Now it is clear that where bullion cannot be coined, and no re-coinage can take place, this cannot be accomplished. America is the great continent of the precious metals; they are now found in extraordinary quantities in our own Union, and to a vast extent in countries adjacent; yet nearly all this coin and bullion are diverted to other countries, and especially to Great Britain, being one of the chief instruments in aiding that country in maintaining her command of the business of the world. By steamships and by exports of her own products and fabrics, she accumulates coin and bullion in London, and provides for their coinage and re-coinage in the least time and without expense; and yet, in our own commercial emporium, we have no mint or even a branch mint for the important process of coinage or re-coinage. If we would command the commerce of all nations, it must be through some one American commercial emporium, the great centre of our own trade and business. The history of trade demonstrates that some such great point is indispensable to enable any nation to command universal commerce, and that such concentration at some one city, instead of injuring other cities or parts of the same country, is of immense benefit to all. There cannot be two or more financial centres of the foreign commerce of any one nation, any more than there can be two or more centres of a circle. The same principle of the centre of the trade of a nation applies to the trade of the world. There can be but one such centre for the world, and but one for each nation, which, in this country, from natural causes, must be New York, where the competition must soon commence with foreign cities for the control of international commerce. Now, as the command of the specie of the world is of immense benefit to our whole country, and can only be secured by making one of our own cities the centre of universal commerce, it is indispensable to success in this great American enterprize that specie and bullion should be invited from all the world to New York-not by any unjust advantages, but by giving to it equal facilities with our other cities for coinage and re-coinage.
It is not for New York merely, or for its commerce, that this mint is desired, but for the benefit of the whole Union. The storehouse of the goods and products of the Union must become the storehouse of its specie. Where the commerce and goods are, there the representatives of their value must be also; and there also should be every facility which a mint would give for increasing these circulating values, and for bringing them into immediate and active use in any form which might be desired. It is in vain to say that the specie or bullion brought by our commerce to New York, can be sent to a distant point where there is a mint with but little delay, risk, or expense. It is clear there must be some risk, delay, and expense, operating as a tax on the business of our commercial emporium, and to that extent rendering unequal her contest with European cities for universal commerce. Coinage and recoinage should be immediate, without any risk, expense, or delay; and it might be said as regards merchandize, with nearly the same truth as is urged in relation to specie, that it would be no injury to the commerce of the Union if light and costly articles would be sent at but trifling expense, risk, or delay, from New York to some distant city, there be stamped, marked, or labelled, and then returned to New York for sale and distribution in the general markets of our own country or of the world. It seems to be forgotten by those who present such arguments, that in a great commercial capital, where business to the amount of millions of dollars is transacted from ten to three o'clock, how important time is where the delay of a day, nay often an hour, may be most disastrous, and change the balance of profit to loss. Merchants and men of business should be permitted to exchange their bullion or foreign coin for American in a few hours or moments, as could be done at a mint, or receive at once mint certificates of deposite, which often might be to them of the greatest importance. The trade in bullion and specie, in itself one great branch of commerce, indispensable in the transaction of business, and especially of international exchange, already exists, to a great extent, in New York, but is limited in diffusing its benefits to American commerce and exchanges by the want of a mint. Now it is subject to expenses, risk, and delay, to put it into a form for circulating values, that delay being itself a great loss of capital, whilst the foreign coin, consisting of denominations unknown to the great body of our people, is almost useless for the purpose of general circulation. It is the rapidity of the circulation of coin that gives it its chief value, and
accumulates capital by the speedy realization of profits; and the American eagle, or half eagle, and our other decimal coinage, might, in a few months, perform more of the functions of money, and pass more rapidly through a greater variety of hands, than if it were in some foreign and unknown coin, which would not circulate among our people. Hence it is, that a mint at New York, to give activity to our specie circulating capital, by converting it at once into American, would be of vast importance to the whole Union. Credit, when based upon real capital, is highly beneficial to the commerce of the country. And specie is one of the main pillars upon which credit can repose with assured confidence, and we must have that specie as the basis of such a credit at our cominercial emporium, if we indeed desire to make it the centre of international exchanges.
With a view to augment the circulation of our own coin in our own country, this department has arrested, as far as practicable, the payment of foreign coin out of the treasury, requiring it to be re-coined into American coin; by which means it has been enabled, between the 1st March, 1845, and 30th October, 1818, to coin at our mints (per table K) the sum of $38,717,709 22, which, from the 1st of March, 1845, to the 1st of March, 1849, must exceed $40,000,000, being a larger sum than was coined in thirty-eight years preceding, from 1793 to 1830, inclusive. But whilst the department will have coined, from the 1st March, 1845, to the 1st March, 1819, more than $40,000,000, the amount would have been augmented to the extent of several millions of dollars of every year, if there had been a branch of the mint at the city of New York. This is proved by the fact that most of the foreign coin sent from New York and other points to Philadelphia for re-coinage has been that portion which was received for government dues, and transferred, mainly, not by the people or merchants, but by the order of this department, from the several government depositories, and but little coin, comparatively, has gone from New York, transmitted voluntarily by individuals for re-coinage, to Philadelphia. Individuals will not, to any great extent, subject themselves to the risk, expense, and delay of this process, whereas the whole of the coin and bullion, amounting to many millions of dollars, that comes to New York by the operations of commerce, or by emigration—now a very large sumwould all be changed into American coin, if there were a mint at that city. Having no branch at the great centre of American commerce, our mint, notwithstanding the great ability and fidelity with which its business is conducted at Philadelphia, is not, to the extent it should be, the mint of the people, and convenient for the coinage of their bullion and foreign coin, and especially the large amount brought by emigrants into the Union, estimated at $8,000,000 per annum, but is used chiefly, so far as regards other cities, for that of the government; whereas it ought to be the mint of the government and people, and for the benefit of both, and can only fully become so by the location of a branch as recommended. The amount of foreign coin re-coined at Philadelphia from Its March, 1845, to 30th November, 1848, on transfers ordered, or deposites by officers of this government directed by me, was (per table Q hereto annexed) $11,463,181-being nearly equal to the whole remaining coinage there during the same period, including plate and bullion.
The branch mint would be most important as auxiliary to the operations of the constitutional treasury; for the present Assistant Treasurer at New York would then become the treasurer of the branch mint, and perform both functions, precisely as is now done at Philadelphia and New Orleans, saving the expense of an increase of officers, preventing double entries and payments, and simplifying the operations of the government; and to the government and the merchant, the risk and cost of the double custody, and transfer from the collector to the Assistant Treasurer, would be entirely saved.
From the 1st of January, 1847, to 30th November, 1848, the mer. chants of New York paid to the collector (per table L) for duties the sum of $35,360,678 36 in specie, being two-thirds of the aggregate payment in specie for duties in the Union. Yet, whilst the government exacted from these merchants this immense sum in specie for duties, it refuses them even a branch of the mint where bullion can be coined, or foreign coin re-coined, the mere establishment of which would attract there so much specie, and render the payment of this large amount so much more easy. The amount of specie received by the Assistant 'Treasurer at New York from 1st January, 1847, to the 30th November, 1848, was $57,328,369, and the coin disbursed by him there during the same period was $55,496,269; making an aggregate of $112,824,638, (per table—.)
With a branch mint at New York, the transactions of business would be undisturbed by the operations of the constitutional treasury. It is true, that even with such a branch there, the collection of duties in specie would operate as a check, not upon the issues, but upon the overissues of their banks; a gentle and most useful check, restraining their over-issues, and mitigating if not preventing those revulsions which are sure to ensue when the business of the banks, and as a consequence, that of the country, is unduly extended. Credit is useful and most abundant only when it is based upon capital and specie, and a legitimate business and commerce. But when it is stretched beyond those limits, it necessarily produces revulsions, disastrous not only to the parties involved, but to the commerce and business of the whole country. It is this fatal tendency to over-issues, and the too great and dangerous extension of their business, which constitute the greatest objection to our banking system; and those banks which are based on a sound capital, and desire to conduct their business advantageously to themselves and to the country, ought to rejoice that such others as would transcend these limits are checked and restrained by the demand for coin created by the specie-receiving and specie-circulating constitutional treasury. During the year 1847, when more than twenty-four millions of specie were brought into the country, and to a great extent paid in for duties and loans to the government, had this coin gone into the banks, as under the old State-bank deposite system to a great extent it must, and have been made the basis of an inflated currency, far exceeding that of 1836, it would have been followed, upon the sudden fall of the price of our breadstuffs and staples, and the turn of exchange and flow of specie out of the country, by a revulsion more disastrous than that of 1837. The fall would have been from a greater inflation to a lower depression, the intensity of the disaster being augmented by the loans and expenses
of a foreign war, by the drain of specie to sustain immense armies in foreign countries, by depreciation of government loans, and the fall of the government credit. The public credit under that system being inseparably connected with that of the banks as its depositories, the government having no specie and depending upon their paper, its credit must have fallen with that of the banks, as happened in 1837, and during the war of 1812; and loans for specie (which were indispensable) could only have been obtained as they were during that war, at ruinous discounts amounting to millions of dollars per annum. Instead of these sacrifices, the public credit was maintained throughout the war, and its stocks sold for high premiums instead of ruinous discounts.
A system which has operated so beneficially both in war and in peace, must, in the main, be wise and salutary; but it would be still more so, if the amendments heretofore recommended by this department were adopted, especially as regards the securities for disbursements (without which ihe system is not safe) and the establishment of a branch mint at New York, as a most important auxiliary. With these amendments, affecting none of the principles of the bill, and especially its specie-receiving and specie-circulating clauses, it would so commend itself to the whole country, and prove so beneficial to its industry, commerce, and business, as to become our settled policy, undisturbed by complaint or opposition from any quarter.
It being made by law the duty of this department to devote its attention to “THE SUPPORT OF PUBLIC credit,” as well as to the improvement and management of the revenue,” it is proper to remark that this government has paid punctually at all times the public debt at its maturity, as well as the accruing interest, never suspending for a moment of time the discharge of either when due. Such has been the attachment of the American people to this the government of their choice-such their regard for honor and good faith—hat, however severe the trial or sacrifice, they have liquidated as they fell due all the debts of the Union.
A table certified by the Register of the Treasury is hereto annexed, (marked N.) showing our population from 1790 to the present period, of every year; our debt; our reecipts from loans and treasury notes ; our revenue each year, exclusive of loans and treasury notes, as well as from these loans and notes ; and the principal and interest of debt paid each year, as well as the total amount. It is an official record which every American may read with pride and satisfaction. It shows that whenever it was necessary to pay the debts and sustain the honor of the country, the people cheerfully submitted not merely to duties on imports, but to direct taxes and excises to the amount of many millions of dollars every year; and that even when our population was sparse and our moneyed resources extremely limited, the debts of the country were always punctually discharged after the adoption of the constitution, both principal and interest, at their maturity.
In 1790 we assumed the debt of the revolution, determined that the honor of the nation should be preserved stainless and unsullied. That debt, then assumed, was $75,463,476 52—being equal to a debt at this