Year: 1869

for the redemption of the gseenback
notes. those who have been boarding
gold will think the time to sell it
has come. If they hold it until the
time of redemption comes, it will be
better for them to sell when the pre-
MUM is thirty-fve cents than to hold
il until the premium is only twenty five
or ten cents; and the natur al, and may
say the inevitable effect Of fixing a time
for redemption will throw a large
amount of gold into the market that has
hitherto been boarded. It will then be
better to hold greenbacks which are
appreciating than gold which will soon
lose it's premium. Besides this resrv-
ing the gold in the Treasury creates a
demand for it, and brings into opera
ton the law which / have elsewhere
discussed-that supply is governed by
the demand.


And, first, will consider the amount
of gold that will probably be required,
and with which it will be safe to begin
redemption. 1t is shown by the history
of banking that solvent and well con-
Quoted banks can safely carry on opera
tions when they have one dollar in gold
in their vaults to three dollars of their
circulation. 1t is also shown by bank
history that banks which nave suspend
ed specie payments, tUa whose soiuency
and good management s.r5 cot suspected
have been able to 1e=-,cs when they
have gotten into their sa:lins one dollar
in gold to two and a halt dollars their
circulation. The credit Oh the q vern-
ment is better than that &C any bank,
and it can, in my opinion, resume on a
smaller proportion of gold thar any
/ 1,I I,o,, h i
| The greenback notes, notwiths ar ding
their depreciation, have one great Z crit
which did not belong to the paper Of
any of the old State banks, which is
that they are of uniform value in every
part of the United States They are
far more convenient than coin for all
business purposes. They can be sent
to every part of the country in payment
Of debts, better and cheaper than the
transportation of coin. The traveller
from Maine to Minnesota can carry
| fifty thousand dollars of it about his
! person, without Inconvenience or obser-
vation, saving to him the labor and
anxiety of carrying coin, or the pur
| chase of Il bill of exchange. If brought
to par, they would be the most desira-
bic currency the country has ever known
and the causes which usually bring
about run on the banks for gold would
not operate against them, or have any
effect upon their value. Under the old
State bank system, to which it is hoped
the country will never return, there was
q far greater demand for gold than
would occur under the present. The
banks being loca! in their character, and
their paper not current in distant parts
Of the country, led to demand on them
for gold by travellers Or those who had
debts to pay at distant points where
their notes were not current. From
these and other considerations it is
doubtful whether as much as one hun
dred millions of greenback notes would
be presented for redemption When
the greenback note is as good as gold
! then the people will not want gold, un-
less for specific purposes, for it would
be an Inconvenience and burden.


| The whole question may be thus stated.
If the Government is strong with gold
to redeem all the notes that may be pre-
sented, but little gold will be demanded,
| because it will be worth no more than
greenbacks but if the Government is
weak and only able to. redeem a small
part of the currency, the gold will be
hastily drawn out to sell in the market
! at profit.


It is true there are $500, 100000 of
national bank notes in circulation, for
the redemption of which the Govern
ment is bound, under the conditions of
the national banking law, and it has
| been urged that when the period
period fixed for redemption arrives, the
national banks would Immediately rush
| to the Treasury with all their greenback
| IF
of it's gold. To avoid this difficulty,
and to make the process still more
gradual and to avoid all rush upon the
Treasury or banks. l propose, by my
| bill, that the banks shall not be requir-
ed to redeem their notes in specie until
the 1st Of January, 1872, and during
the preceding six months shall be re-
/ quired to hold in their vaults the same
amount of greenback reserves, in which
| they may as now, redeem their notes.
If during that period they are required
to hold their greenback reserves, as now,
of course; they cannot rush the TrIasu
ry with them to get gold, and at the end
of this time the Government will be able
to meet their demands without trouble
or danger To give the banks six months
to redeem their notes in gold-and per
haps l may move to make 1T year-be-
yond the time wh en- the Government be-
| gins the redemption of the greenback
| currency, will be no hardship to the Gov
ernment or the people: for national bank
| notes being convertible into greenbacks
they will be of equal value and at par,
and persons holding the bank notes,
who want gold for them, will only have
| to present them to the banks and receive
greenbacks in exchange, on which they
would get the gold


And now I viii consider the question
how the Government shall procure the
gold to commence the work Of redemp
| ton


To this, / answer that the sales of
| gold by the Secretary of the Treasury
must be stopped, the surplus gold now
in the Treasury, and that which will ac-