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 | |||
| ========= | ||||
| $26,300,000 | ||||
| ========= | ||||
| Funds Provided. | ||||
| Balance in Treasury, January 1 | $2,000,000 | |||
| Receipts from duties and sales of lands | ||||
| as by estimate of November 22, 1811 | 8,200,000 | |||
| Loan authorized by law | 11,000,000 | |||
| Treasury notes as authorized by House | ||||
| of Representatives | 5,000,000 | |||
| ========= | ||||
| $26,200,000 | ||||
The issue of treasury notes was a novel experiment in the United States; but they were favorably received, and Mr. Gallatin calculated that the full amount authorized by law, $5,000,000, could be put in circulation during the year. The result of a loan seemed more doubtful. The old six per cents. and deferred stock had already fallen two or three per cent. below par. Mr. Gallatin again recommended the conversion of these securities into a new six per cent. stock, which would facilitate the new loan, and to prevent the necessity of applying, the same years, the large sums required in reimbursement of and purchase of the public debt.
On December 1 Mr. Gallatin made his last annual statement.
Treasury Report for Fiscal Year ending September 30, 1812.
| Receipts. | ||
| Customs, sales of lands, etc. | $10,934,946.20 | |
| On account of loan of eleven millions, act 14 March, 1812 | 5,847,212.50 | |
| $16,782,158.70 | ||
| Balance in Treasury October 1, 1811 | 3,947,818.36 | |
| $20,729,977.06 | ||
| Disbursements. | ||
| Civil Department, foreign intercourse | $1,823,069.35 | |
| Army, militia, forts, etc. | $7,770,300.00 | |
| Navy Department | 3,107,501.54 | |
| Indian Department | 230,975.00 | 11,108,776.54 |
| Interest on debt | $2,498,013.19 | |
| On account of principal | 2,938,465.99 | 5,436,479.18 |
| $18,368,325.07 | ||
| Leaving in Treasury 30 Sept., 1812 | 2,361,652.69 | |
| $20,729,977.76 | ||
The sums obtained or secured on loans during the year amounted to $13,100,209, and the secretary had the satisfaction to state “that notwithstanding the addition thus made to the public debt, and although a considerable portion has been remitted from England and brought to market in America, the public stocks (which had at first experienced a slight depression) have been for the last three months, and continue to be, at par.” His last report to the commissioners of the sinking fund of February 5, 1813, stated the usual application of $8,719,773 to the principal and interest of the debt.
In his report of December 1, 1812, Mr. Gallatin announced that a loan of twenty-one millions was needed for the service of 1813. Congress authorized a loan of $16,000,000, having six years to run, and an additional issue of $5,000,000 of treasury notes. Congress adjourned on March 4. Their procrastination and the pressing demands of the War Department nearly beggared the Treasury before the loans could be negotiated and covered into it.
On April 17 Mr. Gallatin wrote to the secretaries of the army and of the navy, and sent a copy of his letters to Mr. Madison with information that the loan had been filled, and the probable receipts of the Treasury from ordinary sources for the year ascertained. These he estimated at $9,300,000. Deducting the annual appropriation for interest on the debt, the sum expended to March 31, and the amount needed for the civil service, there remained for the War and Navy Departments together the sum of $18,720,000.