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1868. 1869. 1870.

2,611,687,851 19 1874.
2,588,452,213 94 1875.

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2,480,672,427 81 1876, June 30..*2,180,325,037 00

The total debt, including all outstanding obligations of the government, reached its maximum in 1866, when it aggregated $2,773,236,173. But the total interestbearing portion of the debt aggregated at the same time only $2,339,954,150.

The reduction in the total annual interest since the aggregate of interest-bearing and non-interest-bearing debt reached its maximum has been as follows, viz.:

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* In the amount here stated as the outstanding principal of the public debt are included the certificates of deposit outstanding on the 30th of June, issued under act of June 8, 1872, amounting to $31,730,000 in 1873, $58,760,000 in 1874, and $58,415,000 in 1875, for which a like amount in United States notes was on special deposit in the treasury for their redemption, and added to the cash balance in the treasury. These certificates, as a matter of accounts, are treated as a part of the public debt, but being offset by notes held on deposit for their redemption, should properly be deducted from the principal of the public debt in making comparison with former years.



N 1874 Dr. Edward Young, Chief of the National Bureau of Statistics, made an estimate of the amount of American national, state and corporate bonds held in Europe at the close of 1873, and arrived at the conclusion that the amount then was, in round figures, twelve hundred million dollars. By a memorandum sent to the writer of this in August of this year (1876), Dr. Young estimated the amount of the foreign indebtedness of the United States at $1,350,000,000.

Dr. Young's method of arriving at the estimate of $1,200,000,000 of foreign indebtedness at the close of 1873 is somewhat elaborate, and open to some criticism, though it is perhaps as logical a method as any that can be devised for approximating to the actual amount, the most pertinent objection to his conclusions being that he has perhaps estimated the average prices at which American securities have sold in Europe higher than was actually obtained for them.* It is a tolerably well-estab

* BALANCE OF TRADE.-It is necessary, in the outset, to consider the elements that enter into this computation. In the first place, we must ascertain the adverse balance of trade upon the actual specie values of imports and exports. As in the fiscal year 1862 the value of exports exceeded that of the imports, the period embraced in this investigation begins on the 1st July, 1862.

(Here follows a table of the total imports and exports of merchandise and specie from July 1, 1862, to December 31, 1873, which has been incorporated in a table of the same items on page 159, for the longer period from June 30, 1843, to June 30, 1876. The period selected by Dr. Young shows an excess of merchandise imports over merchandise exports, exclusive of specie, amounting to $1,040.535,721. This adverse balance was reduced by the export of $681,946,067 of

lished fact that while a great many American state, municipal and corporate bonds negotiated in London since 1865 have sold for about par, a great many more have sold for much less, and it is well known that of the vast amount of railroad bonds negotiated there since 1870 more than half of the aggregate amount did not net the corporations in the United States over 80 cents on the dollar after deducting all expenses. The amounts "called up" each month on subscriptions to foreign loans in London, as published in the Investors' Manual, show that even since the crisis of 1873 the amount of American state, municipal, railroad and other corporate bonds in London has averaged at least $75,000,000 per

specie in excess of the imports of specie to $358,589,654. Beginning with this net adverse balance of $358,589,654 for the eleven and a half years, he proceeds to take into the account the following elements that increase it, viz.:)

SMUGGLING AND UNDERVALUATION.-From a careful examination of the subject during the past four years, the undersigned considers an addition of 3 per cent to the total value of the imports for undervaluation and smuggling as an ample allowance. It must be borne in mind that neither bulky nor free goods are smuggled, and that merchandise paying specific duties will not be undervalued. What kind of goods will probably be smuggled? Precious stones, jewelry, watches, silks, fine laces, etc. An examination of the official returns of the port of New York, published by this Bureau, will show that the total value of free and dutiable merchandise which entered into consumption during the fiscal year ended June 30, 1873, was, in round numbers, $438,000,000, 3 per cent on which is $13,140,000. The following were the imports of goods most easily smuggled:

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which, with fine laces and embroideries, probably reached $26,000,000. The $13,000,000 above estimated is equal to 50 per cent of the value of such of these articles as paid duty. Is it believed that the undervaluations and smuggling of such articles as the above named amount to $13,000,000 annually? Perhaps, of precious stones, jewelry, watches, laces and embroideries it may reach $5,000,000, but cannot amount to $8,000,000 on silk goods. It seems evident, therefore, that an addition of 3 per cent to the value of imported merchandise is sufficient to

annum; and if we set the aggregate of such bonds (exclusive of national bonds) negotiated in Europe since 1870 at $800,000,000 par value, it will probably be below the actual amount, and if the average net proceeds of these received by the American corporations be estimated at say 85 cents on the dollar, it would show $120,000,000 of debt created without any return. But assuming that Dr. Young's estimate of $1,200,000,000 at the close of 1873 was nearly correct, it would place the aggregate at the present time somewhere about $1,400,000,000. But if his estimate of 80 cents on the dollar for all bonds sold prior to 1874 be 10 per cent too high, as is thought by some, it would still make the

cover the evasions of the revenue, such addition amounting in the period under review to $146,861,754.

FREIGHTS.-The values of the imports of merchandise, as presented in the first table, being those at the ports of shipment, it will be proper to add thereto the amount of freights to the several ports of the United States. As a part is brought in American vessels, and as the freight so earned is an addition to the wealth of the country, it is only necessary to consider, as another element in the computation, the amount of freight received by foreign ship-owners. As inward freights on goods vary from 100 per cent on the value of salt and some other bulky articles to 2 or 3 per cent on dress goods, and less than one-half per cent on specie, it is difficult to estimate the average ad valorem rate. On merchandise the average is not much less than 8 per cent; but, as nearly all the specie and the greater part of the dress goods, jewelry, watches, etc., are brought by foreign steamships, which disburse a considerable amount for fuel and shipstores, it is believed that 6 per cent on the total value of imports is an estimate of approximate accuracy. As the imports in foreign vessels amounted to $3,531 374,280, the element of foreign freight will, therefore, cause an increment of $211,882,456.

The exports of domestic products, as given in the trade reports, are the currency values at the several ports of shipment in the United States. To make these conform to a uniform standard, the values have been reduced to gold in the tables above presented. The total amount exported in American vessels during the period under consideration was of the value of $1,450,000,000 in gold, the freight on which, estimated at 6 per cent, amounted to $87,000,000, which sum must be deducted from the aggregate of freights carried by foreign vessels.

The last item to be added to the estimate is the interest which has become due upon the debt while it has been accruing. To obtain this with approximate accuracy is the most difficult part of this investigation. The most careful

aggregate at present (August, 1876) about $1,500,000,000. Of this amount about one half is presumed to be government bonds.



Total imports into the United States each year from 1843 to 1876 inclusive, as stated by the National Bureau of Statistics for each year ending June 30:

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analysis which has been made, as a basis for an intelligent estimate, leads to the conclusion that the amount of interest is not less than $277,000,000 nor more than $290,000,000. Lest the undersigned should be charged with a desire to reduce the aggregate of our foreign debt below the actual amount, the larger sum will be used in the computation.

We have now the following items:

Adverse balance of trade for eleven and a half years..
Allowance for merchandise smuggled and undervalued
Freights on imports to foreign shipowners

Less freights on exports to United States shipowners.

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87,000.000 $920,333,864

From the above statement it appears that the debt we owe to Europe, incurred since July 1, 1863, amounts to $920,000,000. But owing to the fact that during the former part of that period our credit abroad was not assured, our securities sold considerably below par. Owing to the wide range in pricefrom 40 cents on the dollar at one time, to par at a more recent period - there

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