Year: 1869




ton. With the excess of means at nv


command have purchased bonds in


addition to those purchased for the


sinking fund to the amount of $50, 1872
600. These are held as special fund


subject to the action of congress, and
respectfully recommend that they be


added to the sinking fund, and that any


further purchase that may be made be


so added until the gross amount shall


constitute a fund equal tc that which


would have been erected if there had


been no delay in the execution of the


law. The depreciation of currency is


due to two causes: first an excessive
issue, and secondly to the want of faith
in the government and the extent of
the influence ef the frst-name1 cause
cannot be sscertained until the second
is removed substantially. Whenever
our credit shall be so much improved
at home and abroad that holders of
our bonds are disposed to retain them


when the public mind is excited upon
financial subjects, we shall be able to
Judge more accurately the extent Of the
over issue of paper money. 1t is also
true that the quantity of currency nee
essary for the transaction of the bust
ness of the country cannot now be fix
ed accurately. Since the close ofthe


war the want of the States of the south
have increased and consequently a
large amount of currency has been
Withdrawn from other sections to sup
ply the demand there created. The
amount necessary for the purposes of
the south will steadily increase for the
next two years. The construction of
the Pacific railroad is likely to result in
the substitution Of paper for coin by
the people on the Pacific coast. 1t is
probable that the demand for paper for
that purpose will not be less than thirty
millions of dollars. AS consequence,
a very large quantity of coin will be
withdrawn from circulation, and thus
practically the coin will be increased
upon the Atlantic coast, and the paper
circulation in the states east of the
Rocky Mountains will be materially re-
duced. These changes will tend to
diminish the difference between paper
and coin. The ability of the country
to resume specie payment will not be
due to any special legislation on that
subject, but to the condition of its in
dustries and to its financial relations to
other countries. These, of course, will
be more or less dependent upon the
general policy Of the government The
war exhausted the country of its mater
ial wealth, and the states of south were
literally impoverished. A necessary
condition for the resumption of specie
payments was the development of the
industry of the nation both south and
north, and the consequent sccumuls-
ton of movable products of industry
20 such an extent that our exports of
those products should be equal substsn-
tally to our imports. So long as it is
necessary to pay for merchandise i'm
ported by the transfer of the govern
meut bonds or other evidences of in
debtedness to other countries, so long
it will be impracticsble to resume and
maintain specie payment. When the
products ofiudustry exported shall be
equal substantially to the products of
other countries imported, there will be
no demand for specie for export except
what may arise from the circumstances
that our bonds held abroad are sent
home, sold in our market and the pro-
ceeds exported in coin. When the
credit of the country shall be fully es-
tablished in Europe, and there shall be
no doubt either Of our ability and dis.
position to meet all of our Obligations,
bonds, heretofore and now to & large
extent held By merchants and bankers,
will be transferred to capitalists for per-
manent Investment When this change
shall have taken place the probability
Of our securities being sent home, un-
der the influence of political or financial
disturbances in England, will be very
light, and when, as concurring fact,
our exports, exclusive Of public securi-
ties, shall be equal to our imports,
specie payment may be resumed with
out even q temporary embarrassment to
the business of the country.