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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, 1816). 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, arid to pay out only specie after Mar. 31, 1847 (U.S. Stat. at Large, ix, 64), with the exception of treasury notes.

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 ex~ ported, 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.

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,