the annual appropriation of eight millions (and
which is amply sufficient for that purpose) to the payment of
interest and reimbursement of the principal of the new debt.... If
the national revenue exceeds the national expenditure, a simple
appropriation for the payment of the principal of the debt and
coextensive with the object is sufficient and will infallibly
extinguish the debt. If the expense exceeds the revenue, the
appropriation of any specific sum and the investment of the
interest extinguished or of any other fund, will prove altogether
nugatory; and the national debt will, notwithstanding that
apparatus, be annually increased by an amount equal to the deficit
in the revenue.... What appears to be of vital importance is that
_the crisis_ should at once be met by the adoption of efficient
measures, which will with certainty provide means commensurate with
the expense, and, by _preserving unimpaired instead of abusing that
public credit on which the public resources so eminently depend,
will enable the United States to persevere in the contest until an
honorable peace shall have been obtained_."

On March 14 Congress authorized a public loan of eleven millions of
dollars, leaving it optional with the banks who subscribed to take
stock, or to loan the money on special contract. The books were opened
May 1 and 2, and in the two days $6,118,900 were subscribed: $4,190,000
by banks and $1,928,000 by individuals. The rate was six per cent. Mr.
Gallatin reported this result, and proposed the issue of treasury notes
for such amount as was desired within the limit of the loan to bear
interest at five and two fifths per cent. a year, equal to a cent and a
half per day on a hundred dollars' note; 2d, to be payable one year
after date of issue; 3d, to be in the meanwhile receivable in payment of
all duties, taxes, or debts due to the United States. The first of these
ingenious qualifications was adopted by Mr. Chase in his issue of the
seven-thirties.

On June 18 war was declared. On the 28th Mr. Gallatin submitted his
estimate of receipts and expenditures for the year.

EXPENDITURES IN ROUND NUMBERS.

Civil and miscellaneous $1,560,000
Military establishment, and Indian dept 12,800,000
Naval establishment 3,940,000
Public debt 8,000,000