o that increase, and a new Loan Bill was enacted. The bill
provided for borrowing, in addition to the authority given by previous
Acts, any sum not exceeding $600,000,000 in bonds, or treasury notes
convertible into bonds, at six per cent interest in coin or seven and
three-tenths per cent interest in currency. This provision was found
to be so comprehensive that it not only provided a strong
instrumentality for meeting the immense demands incident to the
disbanding of the armies and the final settlement of claims connected
with that momentous change in our affairs, but also laid the foundation
for the policy of funding the debt at a reduced rate of interest.
These results testify to the magnificent proportions of the financial
legislation during the period of hostilities.

When the Thirty-ninth Congress met in December, 1865, gold stood at
147-7/8 @ 148-1/2. A month later, on the 1st of January, 1866, the
legal-tender notes and fractional currency amounted to $452,231,810;
notes bearing 7-3/10 per cent interest, to $830,549,041; compound-interest
notes payable three years from date (a considerable proportion
of which time had elapsed), to $188,549,041; certificates of
indebtedness, payable at various dates within the current year, to
$50,667,000; and the temporary loan, practically payable on demand,
had reached the large sum of $97,257,194. These might all be called
floating and pressing obligations, and their grand aggregate was
$1,618,705,045. At the same time the amount represented by bonds
(6's of 1861, 5-20's, and 10-40's) was $1,120,786,700,--showing a
total National debt on New-Year's Day, 1866, of $2,739,491,745. If
the National credit was to be maintained these sixteen hundred millions
of floating obligations must be promptly placed on a basis that would
give time to the Government to provide means for their ultimate
redemption. President Johnson, in his message at the opening of the
session, spoke of the debt not as a public blessing, but as a heavy
burden on the industry of the country, to be discharged without
unnecessary delay. This was the popular sentiment in all sections of
the country, although in financial circles arguments were frequently
heard in favor of creating interminable obligations and of adjusting
the debt on a basis of permanency, after the European fashion. The
reduction had indeed already begun, since the maximum of debt had
been attained in the preceding August.

The Secretar