Year: 1865

The Hast objection which will be noticed
! to the measure recommended Is, thatit would
by reducing the rate of foreign exchange


reduce exports and increase imports.
1t is doubtless true that high rate of ex'
change did for a time increase the exporta.
tions of our productions, and diminish the
| importation of our foreign articles, but this
advantage was much more than comterbal
anced BY the largely increased expenses o.
the government and of the people resulting
| from the very cause that produced the high
rate of exchange. Besides, this apparent
advantage no longer exists. The advance
of prices in the United States, notwithstand-
ing the continued high rate of European ex-
change is now checking exports and inviting
imports, and is creating balance in favor Of
Europe that is likely to be the greatest OBJ
stacle in the way of an early resumption OF
specie payments. Nor must it be forgotten,
that while the export of our productions was
stimulated by the high rate of exchange,
this very high rate of exchange enabled Eu-
rope to purchase them at exceedingly low
prices.


Every consideration, therefore, that has
lee1 brought to the mind of the Secretary
con firms the correctness of the views he has
presented. If the business of the country
rested upon stable basis, or if credits could
be kept from being still further increased,
there would be less occasion for solicitude on
this subject. But such is not the fact.
Business is not in healthy condition it is
speculative, feverish, uncertain. Eyery day
that contraction is deferred increases the
difficulty of preventing financial collapse.
Prices and credits will not remain as they
are. The tide will either recede or advance /;
and it will not recede without the exercise
of the controlling power ofCongress-


MEASURES RECOMMENDED.


The Secretary, therefore, respectfully but
earnestly recommends


First. That Congress declare that the COM
pound interest notes shall cease to be legal
tender from the day of their maturity.


Second, That the Secretary be authorized,
In his discretion, to sell bonds of the United
States bearing interest at rate not exceed
ing six per cent, and redeemable and paya-
Bile at such periods as may be conducive to
the interests of the Government, for the pur-
pose of retiring not only compound interest
notes, but the United States notes.


1t is the opinion Of the Secretary, as has
been already stated that the process of con-
traction cannot be injuriously rapid; and
that it will not be necessary TO retire more
than two hundred millions Of the United
States notes, in addition to the compound
notes, before the desired result will be at
tained. But neither the amount of reduc-
ton, nor the time it will be required to bring
up the currency to the specie standard, can
now be estimated with any degree of accu-
tI H., -
lish the policy of contraction. When this
is effected, the Secretary believes the business
of the country will readily accommodate it
self TO the proposed change in the action of
the Government, and that specie payments
may be restored without shock to trade,
and without diminution of the public rev.
enues or of productive industry.


THE PUBLIC DEBT.


At the close of the great war, which has
been waged on both sides with vigor and
energy, and with an expenditure of money,
without a precedent in modern times the
people of the United States are encountered
with o debt which requires the immediate
consideration of their representatives.


The maintenance of public faith is a na-
tional necessity. Nations do not and cannot
safely accumulate moneys to be used at a
future day, and exigencies are constantly
occurring ill which the richest and most
powerful are under the necessity of borrow
ing. The millennial days, when nations
shall beat their swords into plough-shares
and their spears into pruning-hooks, and
learn war no more, are yet, according to all
existing indications, far in the future. Weak
and defaulting nations may maintain a nom
inally Independent existence, but it will be
by reasons of the jealousies, rather than the
forbearance of stronger powers. No nation
is absolutely safe which is not in a condition
to defend itself; nor can it be in this condi-
ton, no matter how strong in other respects,
without a well-established financial credit.
Nations cannot, therefore, afford to be un-
faithful to their pecuniary obligations.
Credit to them, as TO individuals, is money;
and money is the war power of the age. Bat
for the unfaltering confidence of the people
of the loyal states in the good faith Of the
government, the late rebellion would have
been'asuccess, and this greatnation, sorapidly
becoming again united and harmonious,
would have been broken into weak and bel
ligerent fragments.