net liability, exclusive of the circulation and of the credit given to the Treasury. In case of a deficiency of this amount of specie in any bank, it was to pay interest thereon, which was to be distributed, by the Loan Committee elected to supervise this operation, amongst the banks which had the greatest excess over twenty-five per cent. The share of the New York banks in each division of this loan of $150 millions was $35 millions. The Loan Committee was also to issue loan certificates to the participating banks available for settling balances between themselves in case at any time it should be necessary, on account of any embarrassment produced by the advances to the government. The first of these loan certificates were issued September 19th, when the banks had paid in $23.1 millions in coin on account of their subscription to the seven-thirty treasury notes. The treasury notes were not received until January 13th. The Loan Committee was to apportion the loans among the banks in proportion to their capital; also the several payments to be made on account of the loans, and the proceeds of the sales of the securities as made by the government for account of the associates. They were also to divide the securities among the banks, and to pay over the interest as it was collected. The final cash reimbursement was made January 13, 1862, and the residue of the loan unsold, being not quite $4 millions, was distributed amongst the banks immediately afterwards. The securities under this loan were taken at 90.
The second subscription by the banks to the seven and three-tenths notes was made October 1, 1861, and a third loan, in a subscription to six per cent. bonds at about eighty-nine and a third, was made November 16th. The last bonds under this subscription were delivered March 5, 1862. Although the bonds declined while the operation was going on, they were above the subscription rate when it was closed. While this operation was going on, loan certificates were issued to thirty-nine of the fifty banks. The largest amount at any time outstanding was $21,960,000, between the 3d and 7th of February, 1862. They bore interest at seven per cent., which was paid to the banks which held them. Nineteen banks received $149,247 more than they paid. The Loan Committee in their report on these proceedings say: "Of all the great interests of the country, no one has been more affected than the banking interest, nor has any other contributed more for the preservation of our country and its government. To the banks of the three cities of New York, Boston and Philadelphia the people of the United States owe a debt of gratitude, especially to the banks of this city, who in August last took the lead in expressing their confidence in the stability of the government of this country, by placing at risk the capital of their stockholders for its maintenance. But for such support it would have been revolutionized."
The independent treasury was suspended by act of Congress, August 5, 1861, so far as to allow the Secretary of the Treasury to deposit money obtained by loan "in such solvent, specie-paying banks as he may select," and he was apparently authorized to draw on those banks in disbursements
