Year: 1868

Senator Morton, in the course of an
elaborate speech in reply TO the ar
gument that the currency is redund-
ant and we cannot return to specie
payment until contraction has taken
place, said the entire bank circulation
before the war was two hundred and
two millions, and the specie held by
the banks sixty eight millions but
at the same time gold and silver were
in circulation, and il is probable there
were more than one hundred and fifty
millions in the country besides that
held by banks. Then there were also
the issues Of local banks not current
except in the localities where issued,
which rendered necessary the pay
ment of debts and commercial
transactions in bills of exchange and
promissOry notes amounting to many
hundreds of millions of dollars annu-
ally. This form of currency is still
used, but not nearly TO the same
extent. Greenbacks and national
bank notes are now transported from
one section to another to the amount
of many hundred millions every year;
he said the country demanded an in
crease OF currency over 1860 of at least
$50, 600, 900, and therefore when you
add to the actual currency of 1850,
namely about $50, ,0O0.O 900 of the
amount of currency now used in
place of former bills of exchange and
promisory notes, and the increased
demand for other purposes, it doubt
ful whether the currency is more
redundant now than in 1910 when
banks were paying specie, and if not
redundant the contraction is not
necessary preliminary measure to
return TO specie payment. Again,
said Mr.. Morton, il is said the govern
ment cannot return to specie payment
until we have checked the flow of
gold to Europe by largely reducing
our importation of foreign goods.
This is case Of putting the disease
for the remedy. Gold, like every
commodity, is governed by the great
commercial law, of demand and
supply. 1t goes where it is needed
and leaves the country when not in
demand. In this country there is
now but one demand for gold, which
is TO pay duties on imports. In what
ever country paper money has been
made a legal tender it has invariably
driven gold and silver from circula-
ton, and in great part from the
country. Thus it is that Canada is
flooded with American silver, and
that American gold has gone to Europe
in a steady stream for five years.
Thus, it was during the French
revolution, when the assignats, a.
legal tender currency like our own,
drove French gold into all neighbor-
ing countries; so when assignates
finally collapsed, as they did in a single
day, France found herself almost
destitute of coin. And thus il was
during the long suspension of the
Bank of England, when English gold
went out. and was only recalled by
preparations made by her to return to
specie payment. During the first five
years of the decade ending June 80,


1865, our gold exports were S26l, ,26S,-
29T, during the last five years our
exports were S413, ,69O, 900, showing an
increase of $I52, 422 900. During the
first five years our imports of gold
exceeded these of the last five years
SIS, ,3S9, 900 which added to SO, Az,
600 would make Sl7l, 81 900 of in
creased gold, loss during the last five
years We cannot retain our gold at
home except by making demand for
it. If we would reduce importation
of foreign goods we must withhold
the gold with which they are purchas-
ed and this we cannot do except by
making it more profitable to keep il
at home than 10 send it abroad. Mr.


Morton next alluded to the idea that
we can only raise the value OF our
currency by raising that of our bonds,
and to this end we must apply the
surplus gold in the treasury to the
purpose of our bonds in the market to
be cancelled. He did not believe the
existence Of our bonded debt had any
thing to with the depreciation OF our
currency. He believed it would be
depreciated if the government did
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