Page:Cambridge Modern History Volume 7.djvu/602

 570 Fluctuations in the price of gold. [1862-4 needs of the Treasury, Congress also authorised the use of the public credit in the form of temporary loan deposits, at five per cent, interest, payable after ten days' notice ; certificates of indebtedness at six per cent, interest to public creditors ; several kinds of Treasury notes with interest at from five to seven and three-tenths per cent. ; coin certificates for deposits of gold and bullion; and compound interest notes. On January 1, 1866, in which year the end of the insurrection was officially proclaimed, the public debt of the United States had risen to $2,773,000,000. This seemingly unlimited borrowing, the competition created by the endless government purchases, and especially the substitution of legal tender paper for coin, was succeeded by a great inflation of prices ; and gold became a favourite commodity for speculation. The fluctuations of premium in legal tender paper on that metal ran from par to 5 during January, 1862 ; from 34 to 60f during January, 1863 ; from 51 to 60 during January, 1864 ; from 97 to 134J during January, 1865 ; and closed at from 44 to 60 during April of that year, which month brought the war practically to an end. Meanwhile, between these dates it underwent all sorts of eccentric ups and downs, sometimes under the influence of military, commercial, or political news, and sometimes for no apparent reason of any kind. Two direct efforts were made by the government to control this gambling in gold, which had an injurious effect upon both business and finance. Under authority given him by Congress in March, 1864, Secretary Chase went to New York in person on April 13, and during five successive days sold about $11,000,000 of surplus gold on hand in the Treasury, bringing down the premium from 89 on the 14th to 65 1 on the 19th. But the remedy proved very transient. Within a week after the sales were stopped the premium was again almost as high as at their beginning. A new expedient was tried by the passage, on June 17, of an Act of Congress prohibiting gold contracts of various kinds under a penalty of fine and imprisonment. This device proved not only ineffectual but disastrous. The Act was authoritatively notified to the Stock Exchange on June 21 ; and gold, opening that day at 100 premium, had risen by the 30th to 150, in defiance of the threatened penalties. The announcement that Secretary Chase had finally resigned sent the premium spasmodically up to 180. News that Senator William P. Fessenden was on July 1 appointed his successor quickly brought down the premium to 155, and on July 2 it closed at 139. By that time Congress had become convinced of the evil results of the law, and hastily passed a repealing Act, which was approved by the President on the same day ; but the public fever could not be instantly stilled. Spasmodic fluctuations again set in, and on July 11 the premium had risen to 185, which was the highest figure reached during the war. From the end of the war onward, though