Year: 1874




but that this shall be done at the earliest


practicable period. The faith of the gov


ernment could not be more clearly or alb


solutely pledged than Is done by this act Of


Congress, to say nothing Of previous legis-
| lation.


"The length Of time that has now elapsed
since the final overthrow of the rebellion,


as well as proper regard for the faith o. the


nation, admonish us that initiatory steps


towards the redemption Of its pledges


ought not to be longer postponed. 1t is


not unworthy Of remark that the era Of the
war will not be closed until the period Of
redemption shall have been reached.
ain a country like ours, with varied in
dustries and extensive commercial relations
among its different sections and with other


nations and peoples, stability Of the circu-
lating medium is indispensable to the gen.


eral prosperity. Credit, which necessarily


enters largely into commercial transactions,
| can only be steady and secure when It has
| for its foundation q stable currency.
The quality Of stability in money


attaches only to coin, which, by
common consent Of mankind, is the
medium Of exchange, and to q paper cur
reney representative Of coin, because con-


yertible into it at the will Of the holder.
The reason Is obvious; for coin, besides
being recognized throughout the world as
medium Of exchange, has high intrinsic


value, can be procured only by labor and
in limited quantities which cannot be in
creased by statuatory laws, nor suddenly
by other means, while inconvertible paper
money may be produced in indefinite guam
titles at nominal cost, nete of the high
est denomination costing no more than the
lowest, and its volume depending solely on


Legislative enactment.


"A collar legal-tender note, such as is


now in circulation, is neither more nor less


than the promise of the Government to


pay dollar to the bearer, while no express


provision is made by law for paying the


dollar at any time whatever; nor is there


any existing provision for converting it
into ANYTHING that stands in a tangible


ratio to coin dollar. As far as existing
laws go, there is no reason why the legal.
tender note of the denomination Of dol


lar shouH pass for one cent Of gold, except
so far as the Government compels creditors
to accept it in discharge Of obligations to
pay money, and obliges the wealth and
commerce of the country to adopt it as


medium of exchange. To this may be ad-
ded, as An element of the value Of the
legal-teIder dollar, the hope that the Gov


ernmeni will sometime or other redeem its


paper promises according TO their import.


The universal use of, and reliance upon,


such currency tends to blunt the moral


sense and impair the natural selfdepend-


ence of the people, and trains them to the


belief that the Government must directly


assist their individual fortunes and busi


ness, help them in their personal affairs,


and enable them to discharge their debts


by partial payment. This inconvertible
paper currency begets the delusiOn that the
remedy for private pecuniary distress is in


legislative measures, and makes the people
unmindful of the fact that the true remedy


is in greater production and less spending,
and that real prosperity comes only from
individual effort and thrift. When eX-
changes are again made in coin, or in cur
rency convertible into it at the will Of the
holder, this truth will be understood and
acted upon.


at is obvious that there can be no re-
SUMPTION by the Government so long as
the volume of paper currency is largely in
excess of the possible amount Of coin
available for that purpose which may come
into the Treasury in any year, and
while no provision is made for the conver-
sion Of this paper money into anything
having a nearer relation to coin; nor is it
possible for the banks or people to resume
so long as the large amount Of irTedeem-
able paper now in circulation continues to
be by law legal tender for all private debts


with reference both to the past and the fu-
ture. While this state of things lasts gold
will continue to flow from us, and find en-
uloyment where the natural laws Of trade,
unobstructed by restraining legislation,
make its daily use indispensable.


@The Secretary, therefore, recommends
Congress to provide by law that after an
early and fixed day United States notes shall
cease to be legal tender as to contracts
thereafter made. But this provision should
not apply to official salaries or to other
ordinary expenditures Of the Gov
eminent under then existing con-
tracts or appropriations. Between the day
thus to be fixed and the time Of final re-
sumption sufficient period should elapse
to enable the people and banks to prepare
for the latter by such gradual processes in
business as will neither lead to violent con-
traction in credit and values, nor suddenly
increase the obligations Of debtors. The
time should not, in the opinion Of the
W.
and might safely be made as much less as
in the judgment of Congress would sufh-
GENTLY protect the interest Of debtors and |
avoid the evils of too sudden contraction. |


0The law should also authorize the i'm |
mediate conversion Of legal-tender notes in |
to bonds bearing low rate Ofinterest, which |
while inviting conversion, should not be 90 |
high as to appreciate the legal-tender notes |


IL
on the debtor class. As an additional in |
ducement to the conversion of United |
States notes into these bonds at low rate |
of interest, authority should be given for |
making them security for the circulation of |
national banks. The law should further
provide the means for the redemption of /
such notes as may be presented for that
pl1rpose when the period Of resumption
Shall have been reached. To this end, the
should be authorized to make a
loan not exceeding the total amount of
notes remaining unconverted at the time
IF resumption, less the surplus revenue to
be made applicable to such resumption. II
Is probable that the gradual and continued
revival of business will so far increase the
revenues that a large loan will not be re-
luired for this purpose; but it is advisable
hat the Secretary be authorized to make it
in order to meet the contingency off failure
Of sufficient surplus revenues. Such loan
should be made by issuing bonds to run for
such a time as the wisdom Of Congress
nav suggest, and to be disposed of from
.ime 10 time as the necessities Of the case
nav require. In the opinion Of the Secre-
.ary, these bonds should run for a long
period, and should bear lHterest at a rate
not exceeding the lowest rate which the
government may then be paying in refund
ng its six per cent. securities. ANY sub
,tantial or useful movement for resump-
ion necessarily involves supplying the
with increased amounts Of coin,
either by increased revenues or an adequate
oan. The present condition of the credit
1f the government, which would be furth-
sr enhancedEby the adoption of measures
or return to a specie basis, leaves no room
'Or doubt that a loan for such purpose
would be readily taken at low rate OF inter-
st. Measures should also be adopted re-
,uiring the banks to bold gold reserves
to resumption on their part.


4EBut the Secretary does not deem it
proper to pursue the matter intofurther de-
all. If Congress shall conclude, as be
earnestly hopes it will, that the time has
arrived for the enactment of a law having
or its object resumption Of specie payments,
It's own wisdom will supply the necessary


II. = Nf h 4.