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COMMERCIAL CARONICLE AND REVIEW.

Report of Mr. MeCulloch-Government Receipts and Expenditures past, present, and prospec.

tire-Monthly Statement of Debt criticized-Prices of leading articles for eight years--Action of Congress on Contraction-Presidents Message and United States Securities-Railroad Stocks --Prices of Gold-Movements of Treasure for Year-Exchange prices of, &c.

The reassembling of Congress, the message of the President, and the reports of bis Secretaries to Congress, are the chief matters of interests the past month. Never has the appual report of the Secretary of the Treasury bein looked for with more gereral anxiety, or been received with more distinguished marks of public approval than that of Mr. McCulloch, to which we devote a large part of this number of the Magazine. It comprises the transactions of the Fear ending 30th June last, and the finaucial history of the most critical period of the war, wbich it cortains, will attract the attention of ope class of readers, while its statements as to our future financial policy awakens che interest of all. This able state paper is valuable as a record of the past do less than as a fore. Casting of the future.

lo looking orer the balance sheet of the national Treasury here spread before us, the first point which attracts attention is the prodigious resources of our people wbo, alter more tban three years of exhausting war expenditure have without resorting to any foreigo loan, contrived to raise among themselves nɔlers tban 1.800 millions of dollars. To this most significant fact history affords no. parallel, and to it, future republican nationalities in both hemispheres, will look with pride and emulation, in like times of crushing trial and patriotic self sacrifice. Let us briefly examine the details, bowever.

At the opening of the last session, Congress supposed, and the Treasury estimale stated, that the deficit for the fiscal year 1864-5 would amount to 482,000,000. Such bowever, were the expenditures incident to the struggle, that we liave nad to provide for nearly twice that amount, or 942.000,000. And mach of this sum was to be raised when gold was wildly fluctuating above 200, and United States bonds were quoted below 40. Besides this 942 000,000, how. ever, we had to provide for over 150,000,000 of maturing short obligations, wbich were to be paid in money as they fell due. Moreover, our internal taxation proved less productive than was anticipated. Instead of yielding 310.000 000 it brought into the Treasury but 209,000 000. The customs also fell off from 102.000.000 in 1864 to 85,000,000 in 1865.

We will not low revive the unwelcome memory of the circumstances wbich, in the spring and summer of 1864, so damaged the national credit that the proposa I for a loan of 33,000,000, advertised on the 25;b of June was withdrawn on the 2d of July, as it was evident “That such loan would not be taken on terms which it would be the interest of the government to accept." Suffice it to say, that by skillsul management the public confidence was gradually restored and ull opposing difficulties were surmounted by Mr Fessenden and by his successor Mr. McCulloch. The tabular exbibit on page 12 of the report, shows that of the 1,100,000,000 wanted, 257,000,000 were funded in five and six per cent loog

Customs

the year.

War and

nary expenses. Millions 35.388

revenue.

Interest

on

debt. Millions.

4.034 13•190

39 582
49.056

662.509

1861 1892. 13. 1361. 1865. 1-66* 1567*.

423.313 584•581 641.897 941 902

212.057

53.686 77.397 132.006

bonds ; 671,000,000 were raised by the Seven thirties, and the remainder chitfly by the issue of compound-interest legal tenders, wbich have now almost ceased to pass current as active pa per money.

Our space forbids a detailed account of this part of the report, and we content ourselves with simply compiling from it the following table, which shows the gradual increase of our national debt since the beginning of the war, with the responsive growth of our fiscal strength to bear the burdens it has imposed upon us.

We bave added the estimates for the years 1866 and 1867, and the amounts are stated in millions of dollars :

Principal Increase
of
during

& internal
debt.
Millions. Milions.

Millions.
90.867
514.211

437*012
1,098.793

106.700 24.729 1,740.690

776.525 2,682.593

1,153•891 294.392 2,794•787 112.194 524.678 418.62% 2,683.105

82.999 375.000 141.542 But there are other points of the gravest practical importance which these figures illustrate besides the expansiveness of our national resources and our ability to bear a beavy fiscal burden. They show how rapidly the pressure on our other resources is diminishing. The war department, on which 1,031 millions were expended last year, is estimated at 473,000,000 in 1866, and 38,000,000 in 1867. The navy expenditure, which was 122,000,000 last year, will be 51,000.000 in 1866, and is to be reduced to 44,000,000 in 1867. The effect on the public credit produced by reductions on so vigorous a scale, and extended to all the details of the government expenditure, it is impossible to over estimate, for io national finances good credit chiefly means economy and good administration.

Secondly, it appears from Mr. McCulloch's estimates that this contraction will seach the national debt as well as the national expenditures. The debt of the United States, he says, bas increased since the end of June last, when the fiscal year ended. He has borrowea $138,773,097 22 since that time, but su large was the income from internal revenue and from other sources during the month of September, that he has paid off 13,000,000 of this amount, and he expects to reduce the 138,000,000 to 112,000,000 before the end of the current fiscal year, If so, we have traversed the bighest peak in the mountain of our indebtedvess, for during the year 1867 Dr. McCulloch is sanguine enougb to expect that be will pay off 111,000,000 more. To estimate the full force of these reductions, we must remember that of our debt of 2,808,000,000, less than one-balf is in long bonds, and the remainder has to be funded in a permanent shape with as little delay as possible. To facilitate still more this funding operation, Mr. McCulloch brings forward a scheme to pay off the national debt in a little more than a quarter of a century. On this plan we shall have some suggestions to make on another occasion. But apart froin all considerations of early redemption, there is no doubt that our long bonds will be easily negotiated if Mr. McCulloch's ar• ticipations prove true, and we realize an excess of income from taxation over the national expenditure.

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* Estimated,

The last poiot we shall cite from the report is that which refers to the contraction of the volume of our paper money. True to the sound principles of finarce which he has always professed, Mr. McCulloch opposes any increase of National Bank currency, and asks for further power to withdraw from circulation the interest-bearing legal tenders. In this matter of contracting the currency the policy of the government, as expressed by the President, the Secretary of the Treasury, and the Comptroller of the Currency, is appoved by the press and by the people, and has also received the sanction of Congress.

The official monthly statement of our National Debt will be found on another page, and among its interesting details we may mention the new gold notes, which have not increased during the month, and are evidently less popular than Was anticipated by their promoters. We were told that by the gold note policy Fast amounts of coin would be gathered in from boards, and attracted to the Sub-Treasury, where, in some mysterious way, this borrowed gold was to help the Government credit.

So far, however, very little coin seems have been deposited in this way. And the seven millions of gold deposits now.in the Treasury vaults, appear to be chiefly useful as affording to the dealers in specie, free of charge, the facilities for speculation and for safe keeping of coio, which form erly they had to pay heavily fo, at the Bank of New York.

The compound inte est notes have increased 13 millions since 1st December, and amount now to 180 millions. As the oficial statement is prinel this month in much less convenient form than usual, and does not show, as heretofore, bow large an amount of these compound notes has been destroyed, we have no opportunity of verifying the rumor which is again current in Wall street that Mr. McCulloch, to save the interest accumulated, is cancelling all the old inert notes that are paid into the Treasury, and supplying their place with new ones. It is to be observed also that the increase in the aggregate amount of compound potes Lave not arisen from Mr. McCulloch's having converted greenbacks into them us he has legal authority to do. The greenbacks amount still to 426 millions, at which sum they have stood for some time past.

The ohjection has been raised to this method of converting greenbacks into compound notes, that the process involves a considerable loss of interest. But there is an equal, or even a greater difficulty attending every other method of contraction; and get the benefits far outweigh the cost Moreover, this plan has the advantage of having stood the test of experience. It has been tried on a large scale, and so far the successful results have realized the anticipation of Mr. Chase, when he made the experiment of issuing compound notes in 1864. The importance in this point of view of the contracting of our active currency, which the conversion into compound legal tenders has eff:cted, it is impossible to over-estimate. None of the plans of contraction hitherto proposed bave done half as much, and none have operated so imperceptibly, and with so little derangement of the credit-machinery or of the business interests of the

The third point demanding special notice in the statement before us, is the increase of the demand loans. Their amount bas now advanced to $97,257,194, an increase of nearly eight millions for the month. It will be remembered that

а

country.

the act of 30th June, 1864, authorized the increase of these call loans to one hundred and fifty millions. This increase was necessary as a war measure, and to give the necessary elasticity to our financial machinery during the prodigious fiscal efforts of the closing year of the war. There are, however, numerous evils which, since the return of peace, have arisen from the large unwieldy dimensions of these demand loans. The chief objection to them, however, is that they prevent contraction, and favor inflation of the currency. It is reported, and the ru. mor is welcomed with much satisfaction in financial circles, that Mr. McCulloch intends to announce the cessation of interest at an early day on all call loads above five per cent. This conservative movement could not but be attended by the best results.

We are glad to see that an increase is taking place in the certificates of indebtedness. These securities are extremely scarce, and before the excessive is. sues wbicb flooded the market with them towards the close of Mr. Chase's ad. ministration, they were very much sought after for temporary investment, and commanded higb rates. The aggregate now out is $60,607,000, and this amount miglit no doubt be gradually increased to 100,000,000, if the issne could be made at about the present market price. Of all the short-date obligations of the Treasury, the certificates of indebtedness have probably been productive of the least practical embarrassment to the department. Had a freer use been made of these securities, the retiring of twenty-four millions of maturing five per cent legal tenders would not have necessitated an issue of thirteen millions of com. pound interest notes, or, what is even more objectionable, an increase of eight milions in the call loans.

To show the growth and extent of the inflation of nominal values by our greenback irredeemable currency we give below a comparative table of the wholesale prices at this port of the leading articles of foreign and domestic pro. duce from 1859 to the present time. We do not, of course, wish to be understood as urging that the depreciation of our paper money is the sole cause of the advance which has taken place. We have repeatedly stated that the prices of all sorts of commodities are raised by our beavy taxes, by speculation, by a number of circumstances which during the war bave either increased the cost of production, or disturbed the relations of demand and supply. No one whose opinion is entitled to credit can overlook these causes of the fluctuation of mar. ket values. But the point we raise is that the high prices which have prevailed among us are only partially and in a very subordinate degree accounted for by these minor causes. Beyond and above all these in its influence on values, is the depreciation of the currency. Prices have risen far more than they ever could otherwise bave done, because the dollar is not worth as much as in specie page ing times. The paper dollar has lost part of its purchasing power. It is not worth its normal value of ten silver dimes. To-day it only represents seven, Next month it may perhaps be worth eigit. A year ago it would not pur. ehase five. It requires no mathematical genius to show us that prices expressed in these depreciated paper dollars must be higher and more fluctuating than if expressed in gold dollars. Remembering, then, that depreciation of the car. rency is the great producer of high prices, let us examine in the light of this

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3 15

12%

6 75

per M.

principle the course of inflation as shown by the sales in open market from wbich we have compiled the sabjoined tuble. We give the prices, January 30, of each of the last eight years: PRICES OF LEADING ARTICLES FOR EIGHT YEARS.

1859. 1860. 1861.. 1802. 1863. 1864. 1865. 1866.

$c $ c Ashes, pots.....

.100 lbs..... 6 62% 5 12% 6.00 6 25 8 50 8 50 11 75 900 Pearls

6 00

5 37% 5 00 6 25 8 25 9 75 13 00 11 00 BreadstuffsWheat flour, State,.bbl.

4 30 4 30 5 35 5 50 6 05 7 00 10 00 8 75 Wheat, best ex. Genesee.

7 75 7 50 7 50 7 50 8 73 11 00 15 00 14 00 Rre flour,

3 75 4 00 400 3 87% 545 6 65 900 6 10 Corn meal, Jersey..

3 40 8 90

300 4 00
5 65 8 80

4 25 Wheat, white Ge.nbush..

1 40 1 50 145

1 60

1 60 1 80 2 60 2 03 White Michigan...

1 25

1 50 1 45 1 50 1 53 1 83 2 70 2 75 White (hio.

1 30 1 45 1 43 1 48 1 53 1 83 2 60 2 63 White Southern.. 1 45 1 45 1 45 1 52

2 75 2 45 Red Western.

1 20
1 30

1 38 1 42 1 48 1 57 2 45 2 05 Chicago Spring

1 18

1 30 1 33 1 48 2 22 1 85 Rye, Norihern bush

78 92 75 83 96 1 30 1 75 1 05 Oats, State

53 46% 37 42 71 93 1 06 62 Corn, old Western.

78 90 72 64 82 1 30

1 90

95 Corn, new Southern.

75 80 72% 68 86 Cotton, mid. upland....lb.

12 11 124 35% 68% 82

1 20 52 Mid. New Orleans.

12% 11%

36 68

1 21 53 Fish, dry cod .qtl. 4 00 4 50 3 50 3 50 4 50

9 00 9 20 Fruit, -Bunch raisins.. bx.

2 05 2 52

1 75
3 20

3 50 400 5 85 4 40 Currants.. .lb. 7% 6 4% 9 13@13%

15 21 15 Hay, shipping. 100 lbs.

80 1 00 90

77%

85 1 45 1 55 75 Hops... .lb

15 16 25 20 23 33 40 50 Iron--Scotch pig. ton..

25 00 24 50 21 00 23 00 33 50 45 00 63 00 52 00 English bars.

..55 00 5310 52 00 57 00 77 50 90 00 190 00 180 00 Laths

2 12% 200 1 30 I 25 1 45 1 50 2 40 5 00 Lead-Spanish. .ton.

5 50 5 65 5 25 7 00 8 00 10 50 15 00 10 00 Galena

5 85 577% 550 712% 8 00 10 50 16 00 Leather-hemlock, sole.lb.

24 30 10% 20% 27 30 00 42 36 Oak..

80 80 27 28 83 42 52 89 Lime, com. Rockland..bbl.

75 75 75 65 85

18 1 16 Liquors, brandy, cog'c.gal.

8 00 3 26 200 4 00 5 25 Domestic whiskey.. 24% 26 1934 20% 89 91 2 24

2 27% Molasses, N. Orleans...gal. 37 53 37 53 55 70 1 43

1 15 Nival storesCrude turpentine.....bbl. 8 68% 3 43% 2 75 10 00

9 00 Spirits turpentine... .gal.

44% 35 1 47% 2 60 295 210 1 05 Common rosin, N.C.obl.

1 55 i 65 1 25 0.0 10 50) 300 28 00 6 50 Ous-crude whale. .gal.

53 52 51 48 83 I 10 1 48 1 60 Crude, sperm.

1 86 1 40 1 40 1 40 1 75 1 60 2 13 2 50 Linseed.

65 57 50 86 1 27 1 47 1 50 1 45 ProvisionsPork, old mesg.....bbls..

17 00 16 37%16 00 12.00 14 50 19 50 43 00 28 50 Pork, old prime..

18 00 11 75 10 50 850 12 50 14 50 36 25 23 50 Beef, city mess.

900 900 6 00 5 50 12 00 14 00 20 50 20 00 Beef, repacked Chicago.

9 50 9 50 900 11 00 13 00 15 00 23 00 24 00 Beef hams, extra

15 00 14 50 14 00 14 50 15 50 18 30 27 00 33 00 Hams, pickled. .lb. 974 94 8 6 8 11 20

16% Shoulders, pickled

6% 6% 5% 4% 5% 8% 18 14 Land...

11% 10% 10% 8% 10 13 23 19 Batter, Ohio..

18 16 14 16 22 24 45 30 Batter, State..

20 20 18 19 22 29 55 48 Batter, Orange County

25 24 22

25 32 63

50 Cheese 9 11 10 7 12 15%

18% Rice, good... .100 lbs.

3 50 4 20 400 700 8 75 1000 13 00 12 50 Salt, Liverpool, ground..sk.

90 1 15 65 86 1 25 1 85 2 27 200 Liverpool, fine, Ashton's.

1 38 1 95 1 60 1 70 2 15

2 80

4 75 4 10 Seeds, clover .lb..

9% 8% 8% 74 10% 12% 27 Sigar, Cuba, good.

14 7 7%

10 84

12 Tallow

19 18 10 10% 9%

12

9% 10% Whalebone, polar

18 14 95 90 88

1 65 1 60 2 25 1 55 Wool, fleece....

86 40 80 50 60 75 95 75 Excluding cotton, iron, rosin, and a few other articles whose fluctuations in value are partly due to other well-known causes, we find the general course of prices tending upwards during the increase of our paper money.

That increase reached its highest point some time ago, since which our paper money has bcen gradually diminishing, and us our paper currency has grown less so prices bave

1 10

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fallen too.

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