Litchfield enquirer., 1873-12-11

without corresponding benefits upon the surplus funds of the country during the seasong when otherwise employed. I sub- init for your consideration whether this difficulty might not be overcome by au- thorizing the secretary of the treasury to issue at any time to national banks of is- sue any amount of their notes below & fixed per centage of their issue, say 40per cent, upon the banks depositing with the treasurer of the United States an amount of government bonds equal to the amount of notes demanded, the banks to forfeit to the government, say per cent, of the interest accruing on the bonds SO pledg- ed during the time they remain with the treasurer as security for the increased cir culatlon, the bonds so pledged to be re- deemable by the banks at their pleasure, either in whole or in part, by returning their own bills for cancellation to an amount equal to the face of the bonds withdrawn. Iwould further suggest for your consideration the propriety of au- thorizing national banks to diminish their standing issue at pleasure by returning tor cancellation their own bills, and with drawing so many United States bonds as are pledged for the bills returned. In view of the great actual contraction that has taken place in the currency, and the comparative contraction continuously go- ing on, due to the increase of population, increase of manufactures and all the in- dustries, I do not believe that there is too much of it now for the dullest period of the year.. sas
 FREE BANKING.
 Indeed if clearing houses should be es- abolished, thus forcing redemption, it is question for consideration whether banking should not be made free, retain ing all the safeguards now required to se- cure bill holders. In any modification of the present laws regulating the national banks, as further step towards prepar- ing resumption of specie payments, I invite your attention to 0 consideration of the propriety of exacting from them the retention as part of their reserve ei- ther the whole or part of the gold inter- est accruing upon the bonds pledged as security for their issue. I have not re- hected enough on the fearing this might have Ill producing scarcity of coin with which to pay duties on imports, to give it my positive recommendation, but your attention IS invited to the subject Dur ing the last four years the currency has been contracted directly by the withdraw al of three per cent certificates, compound interest notes, and 7-3O bonds outstand- ing on the 4th of March, 1869, all of which took the place of legal tenders in the bank reserves to the extent of $63, ,OOO, 900. During the same perlod there has been a much larger comparative contraction of the currency. The population of the country has largely increased More than 25,000 miles of railroads have been built requingri the active use of capital to op- crate them. Millions of acres of land have been opened to cultivation, requir- ing capital to move the products. Man ufactories have multiplied beyond all precedent in the same period of time, re- Quiring capital weekly for the payment of wages and for the purchase of material, And probably the largest of all the com parative contraction arises from the ora ganizing of free labor i'll the south. Now every laborer there receives his wages. and for want of savings banks, the great CT part of such wages is carried in the pocket or hoarded until required for use. These suggestion are thrown out for your consideration without any recom- mendation that they shall be adopted lit- erally, but hoping that the best method may be arrived at to assure such an elas- ticity of the currency as will keep em- ployed al! the industries of the country and prevent such an imitation as will put off indefnately the resumption of specie payments, an object so devoutly to be wished for by all, and by none more earn ettly than. the class of people most direct ly interested, those who earn their bread by the sweat of their brow. The decision of congress on this subject will have the hearty support of the executive.
 AMERICAN COMMERCE.
 In previous message I have called your attention to the decline in American ship-building, and recommended such leg islation as would secure to us our propor- tion of the carrying trade. Stimulated By high rates and abundance of freight, the progress in ship building has been very satisfactory. There has been an increase of about three per cent in the amount transported in American vessels over the amount of last year. With the reduced cost of material which has taken place, it may be hoped that this progress will be maintained and even increased. Howev- CT, as we pay about eighty millions per annum to foreign vessels for the trans portation of our surplus products to a market, thus increasing the balance of trade against. ..us 10 this amount, the subject is one worthy of your serious considera- lion. ''Cheap transportation" Is sub- ject that has attracted the attention of boh producers add consumers fog the past few years, and hss contributed to, if 1t has not been the direct cause of, the recent panic and stringency.
 As Congress at it's last session appoint ed special committee 10 investigate this whole subject during the vacation and re- ps,st ct this session, l have nothing 10 recommend until the report is read.
 THE CANAL QUESTION.
 There Is work, however, of a national character, in which a greater portion of the east and the west, the narth and the south, are equally interested, to which l will invite your attention. The state of New York has canal connecting Lake Erie with tide water on the Hudson river. The state of Illinois has similar work connecting Lake Michigan with Aaviga- ble water on the Illinois river. thus mak- ing water communication inland between the east and the west and south. These greas artificial water courses are the prop erty of the states through which they pass, and pay toll to these states. Would 1t not be wise statesmanship ta pledge these states that if they will open these canals for the passage of large vessels, the general government will look after and keep in navigable condition the great public highways with which they connect, to wit the overslaugh of the pass on the St. Clair flats, and the Illinois and Missis- sippi rivers. This would be a national work of great value to the producers of the west and south, in giving them free seaboard and a market, and to the eon-