and Clifford at Querétaro (especially as they insisted upon having an
American escort) lest it should seem to be acting under pressure or
lest some untoward accident should occur. This course was doubtless
wise. May 19 they were invited to come, for the Deputies had just
ratified the treaty and the Senators were sure to do so. Sevier was ill
on May 26. He returned to the United States soon after the formalities
were concluded, but Clifford remained as our minister. Rosa arrived at
Washington in November, 1848, as the minister of Mexico. During their
stay at Querétaro our commissioners were led to embody in a protocol
some explanations of the treaty. In 1849 the Mexicans asserted that the
protocol gave them additional advantages; and the Whigs--apparently
encouraged by Benton, who was accused of acting in collusion with the
Mexican minister--undertook to make trouble for the administration
and perhaps invalidate the treaty. But it was unreasonable to pretend
that such a document could modify a treaty previously ratified by the
American Senate and the Mexican Congress. Besides, Sevier and Clifford
gave explicit notice, before drawing up the protocol, that they had no
power to modify the treaty (=52=Clifford to Cuevas, Apr. 30, 1849). At
length the Mexican government admitted formally that the protocol was
merely explanatory (=52=Lacunza to Clifford, July 13, 1849). See also
on this subject Ho. 50; 30, 2, pp. 76-9. Polk, Diary, Feb. 4, 6, 8,
10, 1849. Foote, Remins., 332-5. Sen. 1; 31, 1, pp. 69-89. Ho. 5, pt.
1, 31, 1, pp. 69-89. Meigs, Benton, 378-9. Richardson, Messages, iv,
679-87. Foster, Amer. Diplom., 320. Buchanan, Works, viii, 350 (to C.).
32.29. Memoria de ... Relaciones, Jan., 1849. The chief cause of
difficulty was that Clifford referred certain matters to Washington
that he should have settled himself, and thus caused delay. The worst
consequence was that the customhouse at Vera Cruz did not pass into
Mexican hands at the appointed time, because no one had authority to
surrender it. At length, however, Gen. Smith assumed the responsibility
of doing this, and Clifford endorsed his action. Similar difficulties
arose at Tampico and Mazatlán. (On this topic one may consult:
=52=Buchanan to Clifford, Aug. 15, 1848; =13=Giffard, Apr. 10; July 16;
=52=Clifford to Smith, June 27; July 4; =52=Smith to Clifford, July 8;
and reply, July 18; =52=Otero to Clifford, June 21; July 1; Buchanan,
Works, viii, 177, 268, 272, 284.) Complaint was made because a body of
our troops, in order to go from Monterey, Mex., to New Mexico, crossed
territory not actually in our possession. June 30 arrangements were
completed for paying the $3,000,000 which Trist, and then Butler, had
been authorized to draw (Polk, Diary, Feb. 23; =52=Clifford, no. 15;
Sen. 52; 30, 1, pp. 107-9). July 4 the treaty was duly proclaimed by
Polk (Richardson, Messages, iv, 627; Ho. 1; 30, 2, p. 173); and two
days later he recommended that provision be made for carrying it into
effect (details in note 32.31). Mexico appropriated funds to bring from
the surrendered territory such of her citizens as might desire to leave
it (Negrete, Invasión, iv, 342-9).
32.30. _Evacuation of northeastern Mexico._ =61=Wool to Jones, Mar. 21;
June 8, 15; =61=Jones to Butler, May 17; =61=_Id._ to Wool, June 7, 17;
65gen. orders 25; =65=Wool, orders 156, June 12 (announcing that peace
had been made); =76=A. de Leano, Monterey, June 25 (possession given
yesterday); =76=Aguirre to _Id._, Saltillo, June 29 (S. evacuated, June
14). =76=Clarke to Mex. commander, Mazapil, Mar. 18. July 6, =61=Wool
wrote to the adj. gen. from the Brazos that four cos. of dragoons
would soon set out for California, and Bragg's battery and one co. of
dragoons for S. Fe under orders from the war dept.; and that all the
volunteers except five mounted cos. had embarked.
_The northwest._ =61=Price to Rails, Apr. 16; =61=_Id._ to vice gov.
Chihuahua, Apr. 16; México á través, iv, 710; =76=Price to Mex.
commrs., May 1; =69=Wool to Marcy, June 22; =61=_Id._ to adj. gen.,
July 6. On Aug. 6 news of peace and the retention of upper Calif.
(which went overland from La]* Paz in Lower Calif.) reached Mason at
Monterey. He then ordered the N. Y. vols. discharged. This process was
completed on Oct. 26 (Sen. 18; 31, 1, pp. 573, 626). =61=Mason to adj.
gen., Aug. 19 (anticipatory orders given to Burton in Lower Calif.
to evacuate on learning of peace). Sen. 18; 31, 1, p. 513 (Burton to
Mason, June 27: official news of peace have come).
_Naval evacuation._ Ho. 50; 30, 2, p. 52 (Buchanan). =48=Mason to
Shubrick or Jones, Mar. 11, confid. =48=_Id._ to Jones, June 27 (Polk
wished to retain Lower Calif., but did not wish to prevent peace by
insisting; do what you rightfully can to help friendly Mexicans come
to the U. S., if they wish to do so). July 15 at La Paz =47=Jones
and Shubrick agreed that such persons should be transported to
California, and that, in extreme cases of destitution caused by Mexican
vengeance, reasonable compensation should be made out of the military
contributions collected in that quarter. =76=Comte. gen. Sonora,
July 13 (U. S. vessels left Guaymas July 5). Gaxiola, Invasión, 215
(Lavallette evacuated Mazatlán June 17). The treaty had been received
at Mazatlán on June 13. Ho. 50; 30, 2, p. 52 (B.). =52=Jones to Anaya,
June 13.
32.31. =60=Butler to Marcy, May 21; June 2. =80=Memo., May 30.
=13=Doyle, no. 66, 1848. =52=Clifford, no. 13, 1848. México á través,
iv, 711. Rivera, Jalapa, iv, 88. (Herrera) =52=Rosa to Sevier and
Clifford, June 2; =80=Relaciones circular, June 13. Grant, Mems., i,
118. Sen. Rep. 32; 34, 1 (Naylor).
Arrangements were made by Butler and the ayuntamiento so that local
Mexican guards began to patrol the city as soon as the Americans
marched out (=92=memo.). Our troops began to leave the capital on
May 30 (=60=Butler to Marcy, June 2). The order of march was: heavy
artillery; Patterson's division (vols.); Marshall's division (vols.);
Col. Bonham and third division (regulars); Kearny and second division
(regulars); Butler and first division (regulars). Divisions were as a
rule two days apart. Worth remained at the capital for a time after
June 12 to dispose of surplus property. After Butler sailed (June 21)
Worth was in command. July 6 Polk presented the consummated treaty to
Congress, recommending the appropriation of $12,000,000 for Mexico,
provision for a commissioner and a surveyor to run and mark the
boundary line, and provision for commissioners to adjust the American
claims against Mexico assumed by the United States (Richardson,
Messages, iv, 587-93). Herrera was declared President on May 30.
32.32. =61=Thomas to Brooke, May 21. Lerdo de Tejada, Apuntes, ii,
585. =13=Giffard to Doyle, Aug. 1. México á través, iv, 711. =61=P. F.
Smith, July 11. =61=Worth to Smith, June 27. =254=McClellan to "Tom,"
May 23. (Symbol) Ho. 60; 30, 1, p. 911 (Scott). (Verse) Oswandel,
Notes, 587.
It seems unnecessary to cite the numerous orders regarding details.
For the embarkation see Ho. 1; 30, 2, p. 201. For one reason or another
a few men remained in Mexico. There was a plan to march some of the
troops north from the capital, but it did not seem wise to ask the
consent of the Mexican Congress. The original intention was to have the
men going by water land as near their homes as practicable, but the
northern men objected strenuously to the tedious voyage. The Mexicans
and Americans awaiting execution were released. The members of the
Mexican Spy Co. were offered $20 apiece and a trip to Texas. Our sick
and wounded soldiers were provided for on their arrival in the United
States.
XXXIII. THE FINANCES OF THE WAR
33.1. On Mexican finances see also vol. ii, pp. 6-8.
33.2. Ho. 60; 30, 1, p. 1070, table. Sen. 14; 30, 1, pp. 13-24.
=61=Scott, memoir on Mexican finances received at the war dept., Jan.
6, 1848. Mexican national accounts were kept in so peculiar a way, and
the officials were so much more anxious to conceal than to reveal the
truth, that it would be extremely difficult and very likely impossible
to state precisely all the details regarding the finances of the
government.
33.3. Ramírez, México, 243-4. Dublán, Legislación, v, 135, 172, 211,
240, 246, 255, 261-3, 286. =80=Guerra to Hacienda, Sept. 8, 1847.
_Diario_, Dec. 31, 1846; June 17; July 6, 1847. =76=Guerra, circulars,
June 17; July 6, 1847. S. Anna, Apelación, 67. =82=Proclam. of act'g.
gov. Puebla, Nov. 30, 1847. =80=Méx. state legislature, address, Apr.
26, 1847. =76=S. Anna, Nov. 16, 1846. Vera Cruz state, or at least her
governor, showed much zeal, but all her resources were needed for home
use. See also chap. xxi, p. 9.
33.4. =75=Report of meeting of govs., Nov., 1847. S. Anna, Apelación,
45, 67. _Courrier des Etats Unis_, May 22, 1847. Encarnacion Prisoners,
69. México á través, iv, 667. Apuntes, 206-7. _Republicano_, June 17,
1847. =76=Memo., Apr. 6, 1847. _Picayune_, Aug. 7, 8, 1847. London
_Times_, Sept. 6, 1847. Semmes, Service, 313. Ramírez, México, 238.
Gamboa, Impug., 67. Dictamen de la Comisión, 29-30. =92=Mexico ayunt.,
Sept. 9, 1847. =92=Tornel to Mexico ayunt., Sept. 12. Ho. 60; 30, 1, p.
1063 (Scott). Ripley, War with Mexico, ii, 126, 489.
The clergy may have given something in addition to the $1,500,000.
See the end of chap. xxi, p. 15. The arrangement with the bondholders
was known as the "conversion of 1846." This loan gave Mackintosh a
particular reason for desiring to have peace made. The loan was to
have been repaid in nine months. During July and August, 1847, Santa
Anna appears to have raised in one way and another, as indicated
in the text, about $1,000,000. The pay of officials was reduced or
withheld. For forced loans see chap. i, note 1.7. In July, 1847,
though foreigners were exempt from forced loans, Santa Anna evaded
the agreement by taking money without going through the ceremony of
promising to repay it.
33.5. =80=Lombardini to Mexico ayunt., Aug. 13, 1847. =75=Meeting
of govs., Nov., 1847. _Diario_, July 1, 1847. Ramírez, México, 260.
=90=Jalapa ayunt., Apr. 10, 1847. =94=Canalizo to Orizaba ayunt., Apr.
4, 1847. =82=Comte. milit., S. Martín, to Puebla sec. state, Mar. 31,
1847. =312=Anaya to S. Anna, Apr. 9, 1847. =76=Many memoranda, orders,
etc. There was waste, of course, as well as injustice and peculation.
This was brought out at the meeting of governors.
33.6. Ho. 6; 29, 1 (Walker, report, Dec. 3, 1845). Sen. 2; 29, 2
(_Id._, report, Dec. 9, 1846). Ho. 9; 29, 1 (_Id._, estimates, Dec.
4, 1845). Ho. 51; 29, 1 (war dept. contracts). Ho. 56; 29, 1 (Marcy,
report, Jan. 9, 1846). Ho. 81; 29, 1.
33.7. _Bankers' Mag._, ii, 202-4. [B]N. Y. _Herald_ (weekly), May 16,
23; June 6; July 3; Aug. 8, 15, 29, 1846. London _Times_, July 15,
1846. =198=Gallatin to Everett, Dec. 16, 1847. =354=Welles papers
(Hist. of 29 Cong., 2 sess.). _Nat. Intelligencer_, Nov. 28, 1846.
[Footnote B: All the citations of the _Herald_ in the notes on this
chapter refer to the financial articles.]
33.8. Wash. _Union_, Nov. 30, 1846. N. Y. _Herald_ (weekly), May 16;
June 6, 1846; June 19, 1847. Scott, Repudiation, 37, 47, 162. Green,
Repudiation, 11, 13, 15. _Niles_, Dec. 4, 1847, p. 218. (Sévigné)
Buchanan, Works, vii, 66. London _Spectator_, May 30, 1846. =354=Welles
papers. Dewey, Financial History, 245. Bolles, Financial History,
580-2. _Journ. Mil. Serv. Instit._, xiv, 198.
The huge state debts were mostly due to extravagant enterprises often
supported by fraudulent banking. Delinquency was in reality a salutary
suspension of payments that prevented bankruptcy, but the creditors did
not know this at the time, and felt little disposed to be charitable.
33.9. Taussig, Tariff Hist., 113-5. _Niles_, June 6, 1846, p. 212;
Aug. 1, 1846, p. 345; Aug. 14, 1847, p. 369. Boston _Atlas_, Jan. 6,
1847. Ambler, Ritchie, 264. Webster, Letters, 337-9. =308=Shields to
Walker, Aug. 3, 1846. Sen. 105; 29, 2 (Walker to Dallas, Feb. 1, 1847).
Ho. 227; 29, 1. Ho. 7; 30, 2 (Walker, report, Dec. 9, 1848). (Walker,
Jarnagin) Welles papers. (Haywood) =1=Allen to "Effie," July 25, 1846;
=210=McDuffie to Hammond, July 20, 1846. N. Y. _Herald_ (weekly), Aug.
1, 29; Dec. 19, 1846; Jan. 29, 1848. N. Y. _Globe_, Jan. 9, 1847.
_Bankers' Mag._, i, 136; ii, 74. Ho. 6; 29, 1 (Walker, report, Dec.
3, 1845). Sen. 2; 29, 2 (_Id._, report, Dec. 9, 1846). U. S. Stat. at
Large, ix, 42, 53, 59, 106. Lalor, Cyclop., ii, 495; iii, 864. Phila.
_No. American_, July 16, 1846.
Walker's report of December 3, 1845, enunciated and defended his
tariff principles (Ho. 6; 29, 1). These were: 1, to collect only
enough revenue for the economical administration of the government;
2, to have no duty higher than the lowest rate that will yield the
greatest revenue (_e.g._ some luxuries are so easily smuggled in that
a high duty would produce little); 3, below such a rate to permit
discrimination, if thought desirable (_e.g._ less on necessaries than
on luxuries); 4, to lay the maximum rate on luxuries; 5, to have only
_ad valorem_ duties; and, 6, to discriminate against no section or
class of the nation. He expressed the opinions that many of the high
duties were becoming prohibitive and therefore unprofitable, and that
the increased risk and costs of transportation during a war would
cause nearly all of them to become so. Besides, he said, "at least two
thirds of the taxes imposed by the present tariff are paid, not into
the treasury, but to the protected classes" (_Niles_, Aug. 1, 1846,
p. 349). Walker also charged that the specific duties, which formed a
part of the 1842 tariff, taxed most highly the cheapest articles and
therefore produced relatively little (Sen. 105; 29, 2: to Dallas). It
was argued by others that war would sufficiently hinder importing to
make a protective tariff unnecessary (Wash. _Union_, May 28, 1846).
The essential idea underlying the tariff of 1846, though it was not
strictly a revenue tariff, was that it would increase the revenue by
stimulating importation. But opponents argued that unless Europe should
take a greatly increased quantity of our agricultural products--which
there was no reason to expect--we could not pay for larger imports;
while, should foreign goods be "dumped" at low prices upon our markets,
American manufacturers would be ruined. Even in the year ending June
30, 1845, the balance of trade had been $7,251,589 against us, and we
had exported $8,606,495 in specie (_Bankers' Mag._, i, 136). Under the
tariff of 1842 the average rate of duty was 24 per cent; under that of
1846, 18 per cent.
One natural effect of the uncertainty caused by the new fiscal laws
was to check business, but this was offset by its tendency to check
speculation and inflation. The specie feature tended to contract
the currency, and many deemed this unfortunate in view of the large
calls for money likely to result from the war. Good judges thought
its enforcement would have to be deferred, therefore. A special cause
of alarm was that in preparing for the second war with England the
duties had been increased instead of reduced. Senator Haywood of North
Carolina opposed the new scale of duties as sure to plunge the country
into debt, opposed putting them into effect so promptly (Dec. 1,
1846), and opposed the adoption of such a combination of new financial
measures (Wash. _Union_, Aug. 18, 1846). He therefore resigned, and
this endangered the plan of the administration.
The warehouse system consisted in deferring the payment of assessed
duties without an interest charge, the government retaining the goods
meanwhile as security for the eventual payment of them. Goods could
therefore wait for a purchaser, instead of going--if not at once in
demand--for what they would bring at a forced sale. This encouraged
importation and built up extensive stocks, which in turn attracted
purchasers from afar (Walker, report, Dec. 9, 1846, in Sen. 2; 29, 2).
This system, like that of the sub-treasury, proved highly advantageous.
The specie provision of the sub-treasury bill required the government
to accept only specie after Dec. 31, 1846, and to pay out only specie
after Mar. 31, 1847 (U. S. Stat. at Large, ix, 64), with the exception
of treasury notes.
33.10. N. Y. _Tribune_, Jan. 24, 1848. Sen. 105; 29, 2 (Walker to
Dallas, Feb. 1, 1847). Sen. 392; 29, 1 (Polk, Message, June 16; Walker,
June 15, 1846, etc.). Polk, Diary, Sept. 29, 1846. Ho. 6; 29, 1
(Walker, report, Dec. 3, 1845). Sen. 2; 29, 2 (_Id._, report, Dec. 9,
1846). Ho. 6; 30, 1 (_Id._, report, Dec. 8, 1847). Ho. 2 and 10; 29, 2.
Ho. 9, 51, 56, 81, 82; 29, 1. Sen. 1; 29, 2, p. 395. Sen. 27; 30, 1.]
The warehouse bill also delayed the payment of duties. Walker's
estimate of the customs revenue for 1846-7 was $27,835,731 (report,
Dec. 9, 1846, in Sen. 2; 29, 2). The receipts were actually $23,747,865
(report, Dec. 8, 1847, in Ho. 6; 30, 1). Walker pointed out that nearly
half a million was due on warehoused goods (_Niles_, July 31, 1847, p.
337); but these goods might not all have been imported, had it been
necessary to pay the duties at once, and some of them were practically
sure to be exported, and hence not all the duties assessed upon them
could be considered a part of the revenue, as Walker intimated. The
Democrats feared that taxes would make the war unpopular, and the Whigs
hoped to obtain that result by less expensive methods.
33.11. Sen. 392; 29, 1 (Walker to Polk, June 15, 1846). Gallatin, War
Expenses, 15-6. _Niles_, Sept. 19, 1846, p. 48; Oct. 3, 1846, p. 80.
_Bankers' Mag._, i, 193-4, 322. N. Y. _Herald_ (weekly), July 18; Aug.
15; Sept. 19; Oct. 31, 1846; Jan. 9, 1847. Bayley, National Loans,
70-2. _Polit. Sci. Qtrly._, i, 375-84. N. Y. _Tribune_, Jan. 24, 1848.
U. S. Stat. at Large, ix, 39. Knox, U. S. Notes, 63-4.
The Act of July 22, 1846, was based upon and virtually embodied that
of Oct. 12, 1837. Notes redeemed could be reissued. Any fraction of
the $10,000,000 could be issued in notes or in stock (bonds) at the
President's discretion, but the amount of both could not exceed that
figure. The bonds were to conform to the Act of Apr. 15, 1842, and to
"be redeemable at a period not longer than ten years from the issue
thereof." Walker thought that only a war with a powerful maritime
nation, exposing our commerce to peril and causing a great loss in
customs revenue, would be thought to warrant excise and direct
taxes. (The idea of a direct tax was widely unpopular, because such
a tax would be based upon population, and therefore would favor the
capitalistic sections.) Before issuing treasury notes Walker used
up much of the surplus lying in the banks. The notes were issued
at par. They could not become a circulating medium. For redemption
they went to the city banks. So long as these banks had deposits of
public funds, they were accepted as cash. After that, their tendency
was to fall. About Oct. 1, 1846, the notes were quoted at 98-1/2 in
St. Louis. For a time the New Orleans banks would not receive the
notes, but retaliation brought the banks round. Since only specie and
treasury notes were to be receivable after Jan. 1, 1847, for dues to
the government, the sub-treasury Act aided the notes. On the other
hand the issuance of the notes offset the specie requirement of that
Act, and therefore prevented or modified some of its anticipated
consequences--particularly a drain upon the specie of the banks. One
advantage of the notes was that, should the war suddenly end, they
could be withdrawn and the interest on them stopped. This was not true
of loans.
33.12. Ho. 6; 29, 1 (Walker, report, Dec. 3, 1845). Polk, Diary, Sept.
29, 1846. Gallatin, War Expenses, 14-6. _Niles_, Sept, 12, 1846, p.
17. De Knight, Currency, 69. N. Y. _Herald_ (weekly), June 6; Aug. 15,
1846; Jan. 9, 1847; Jan. 29, 1848. _Bankers' Mag._, i, 193-4.
The authority to issue these notes was limited to one year; but on Jan.
28, 1847, the time was extended to six months after the ratification
of peace with Mexico, with the proviso that the notes thus authorized
should not exceed $5,000,000 in amount (§ 15, U. S. Stat. at Large, ix,
121-2). In his report of Dec. 9, 1846, Walker stated that $3,853,100 of
these notes had been issued, $1,766,450 bearing interest at one tenth
of 1 per cent (De Knight, Currency, 69), and the residue at 5-2/5 per
cent per annum payable on redemption. Nov. 2, 1846, treasury notes of
prior issues amounting to $412,283.97 were outstanding. The surplus,
July 1, 1846, was $9,126,439. Sept. 29, 1846, the treasury contained
"only a fraction over" four millions (Polk, Diary, Sept. 29).
33.13. =13=Pakenham, nos. 127, Oct. 29; 130, Nov. 12, 1846. (Walker)
Wash. _Union_, May 10; Dec. 9, 1847; N. Y. _Express_, Dec. 12, 1846;
Welles papers; Boston _Courier_, Feb. 17, 1848; =345=G. A. Worth to
V. Buren, Dec. 16, 1847; =198=Gallatin to Newboldt, Feb. 8, 1848;
=198=_Id._ to Rockwell, May 8, 1848; =181=Buchanan to Donelson, May
13, 1847. Miss. Hist. Soc. Pubs., vi, 363. Dodd, Walker, 24, etc.
Wash. _Union_, Nov. 16; Dec. 8, 1846. N. Y. _Express_, Nov. 18, 1846.
_Bankers' Mag._, i, 321-2. N. Y. _Herald_ (weekly), Sept. 19; Nov. 7,
14, 28, 1846. Bayley, National Loans, 71. De Knight, Currency, 70.
_Niles_, Oct. 10, p. 81; Oct. 17, p. 97; Oct. 24, p. 128; Nov. 7, pp.
146-7, 1846. Sen. 105; 29, 2 (Walker to Dallas, Feb. 1, 1847). Polk,
Diary, Oct. 1, 13, 15-7, 22, 30; Nov. 7, 1846. London _Times_, Oct. 27,
1846. Sen. 2; 29, 2 (Walker, report, Dec. 9, 1846). _Cong. Globe_, 29,
2, app., 124 (Ingersoll). Dewey, Financial History, 256.
Professor Tucker proved, it was said, that Walker's argument for free
trade made an error of $1,000,000 per year in the productive industry
of the United States. Stewart of Pennsylvania charged him in Congress
with a number of errors. Rockwell of Connecticut made a startling
analysis of treasury statements (_Cong. Globe_, 30, 1, pp. 404-7);
but it would lead us too far afield to enter upon such a discussion.
$4,999,149 of the loan was issued (Bayley, Nat. Loans, 71). On $363,900
there was an average premium of .277 of 1 per cent, while the rest
went at par (De Knight, Currency, 70). Opponents of the government
attributed the success of the loan to Marcy's statement that it would
not be necessary to call for more volunteers. As a new call for
volunteers went out almost immediately after the bids were opened, he
was charged falsely with having played a trick on the public (N. Y.
_Express_, Nov. 18, 1846). For the truth in this matter see vol. i, p.
351. Most of the loan was taken at New York, but it became fairly well
distributed. Walker's offering the loan only ten days after advertising
an issue of $3,000,000 in notes (_Niles_, Nov., 1846, p. 147) was
rather alarming, it must be admitted. A less reasonable criticism on
his policy was that he could and should have borrowed liberally June 1
and July 1 at 5 per cent. At those dates he had a large surplus, the
tariff had not been changed, and the administration did not expect a
serious war.
33.14. Sen. 2; 29, 2 (Walker, report, Dec. 9, 1846). Dewey, Financial
History, 255-6. U. S. Stat. at Large, ix, 118. =247=King to Larkin,
Nov. 7, 1847. Polk, Diary, Feb. 16. =13=Pakenham, no. 13, Nov. 12,
1846. _Niles_, Apr. 24, 1847, p. 113; June 5, p. 224; Aug. 21, pp. 392,
400; Feb. 5, 1848, p. 354 (McLean). Wash. _Union_, Jan. 14; Apr. 12,
1847. N. Y. _Herald_ (weekly), Apr. 24; Nov. 30, 1847; Feb. 26; Mar. 4,
11, 18, 1848. Bayley, Nat. Loans, 72. De Knight, Currency, 71-2. Knox,
U. S. Notes, 64, 69. =108=Buchanan to Bancroft, Dec. 29, 1846, priv.
The estimated deficit, July 1, 1847, was $4,779,042 (Walker, report,
Dec. 9, 1846 in Sen. 2; 29, 2). By the Act of Jan. 28, 1847, the
treasury notes were to be redeemable in one or two years, to bear
interest (not more than 6 per cent) at the discretion of the President,
and to be convertible into bonds. None could be issued, used as
security for loans, or bought up by the government, at less than
par plus the accrued interest. New notes could be issued for those
redeemed, but the total outstanding amount of notes and bonds issued
under the Act could not exceed $23,000,000. The public lands were in
effect pledged as security for the loan, which was made payable at any
time after Dec. 31, 1867. The Act provided that the notes to be issued
under it and all previous treasury notes could be converted into 6 per
cent stock (bonds).