Year: 1877

from the very necessity of free banking
are at liberty to retire their currency az
well as to increase it, and this has beer
done by them since the first of January
1875, to the amount of $36,624,612. Bu


this is reduction effected by each bank
guided by it's own interest, and the cir
culation it can safely and prudently
maintain.


There are now deposited with the
Treasurer by private corporations, banks
and individuals $57, 10000 of United
States notes. OF this there were depos
tied by the National Banks at their last
statement made June 22d, $14,450,0G0
and they have in cash reserve held by
them, $42, 100000 more than the amount
required by law, clearly showing that
there is no want Of currency when de
manded for the requirements of bust
ness.


Since Jan. l, II, the United States
has issued 1874 $4,000 Of silver coin, and
has redeemed with that $21 $50, 600 frac
tional currency, now almost superseded
by silver coin, and also holds So, 100, ,85e
Of United States notes for the redemp-
tion of fractional currency still out,
standing In this there was no contrac-
ton but a substitution of coin fol
fractional currency.


1t was an error to make the retire
ment OF United States notes depend up
on the issue of bank notes. The two
had no relation to each other, but the
retirement of United States notes should
depend entirely upon the amount neces-
sary to be withdrawn, to advance within
the limited time the residue to par in
coin, and the simplest mode of doing
this was to authorize their conversion
into bonds at the pleasure of the holder,
the bonds to bear the lowest rate of in
terest that would in ordinary times be
maintained at par in gold TO this the
objection is made that we convert a non
interest bearing note into an interest
bearing note, and that is true, but what
right have we as a Nation or has any
bank, or individual, to force into circu-
lation as money its note, upon which it
pays no interest? Why ought not one
who issues promise to pay on demand
be made to pay it when demanded or pay
interest hereafter? What right has he
in law or justice, to insist upon main
tanning in circulation his note which he
refuses to pay according to promise, and
which he refuses to receive in payment
of a note bearing interest? A certain
amount OF United States notes can be,
and ought to be, maintained at par in
coin, with the aid of moderate coin re-
serve held in the Treasury, and to the
extent that this can be done they form
the best possible paper money, a debt of
the people without interest; Of equal
value with coin, and more convenient to
carry and handle. Beyond this the right
to issue paper money, either by the gov
ernmcnt or by banks, is a dangerous ex-
ercise of power, injurious to all classes,
and should not continue single day be-
yond the necessities that gave it birth


But if Congress should see proper to
confne the process of resumption to the
present law, we have still the second
mode of resuming, by accumulating coin
gradually, so that when the time fixed
for resumption / rives, the Treasury
may be able to redeem such notes as are
presented In this respect the resump-
ton act is as full and liberal as human
language can frame it. The Secretary
is authorized to prepare for resumption
and for that purpose to use the surplus
revenue and sell either of the three
classes of bonds, all of which are now
at or above par in coin. The power can
be, ought to be, and will be executed if
not repealed.


This accumulation, both of silver and
gold can be made by arrcsting from eX-
portation our own production of these
metals. This is more than sufficient to
supply our wants for this purpose, and,
fortunately, we have plenty of other
productions-co cotton, wheat and
fabrics, the fruit Of our industry for ex-
ports. This country is the greatest pro-
ducer of gold and silver in the world
The balance of foreign trade is i'll our
favor During the last fiscal year our
exports exceeded our imports in gold
value the sum of $16655, $50 and this
balance is steadily increasing.


This year Providence has blessed us
with an enormous crop OF almost every
production of the farm or plantation
and the foreign demand is largely in
creased by the Russian war. Russia is
our great competitor i'll supplying Eu
rope with bread, and she now will con-
sumo her own products We have not
reached the coin basis in the production
of commodities for the foreign market
Our expectation of home fabrics has in
creased and is increasing, and we are
now competing with Manchester and
Birmingham in the sale of products that
have made those cities famous through
out the world.


Our manufactures of cotton, iron and
wool now rival in foreign markets the
Oldest countries in Europe.


We have during the five months of
President Hayes administration made
an actual accumulation of currency, and
of gold and silver coin and bullion, 81 !,
340,932. From the first Of May to this
time we have added to our coin reserve
$20,000000 by the sale of bonds, without
disturbing the money market and with
gold steadily on the decline. We have
reduced the public debt since the first
of March the sum Of 500 ,S24 We
have conducted the vast operations Of
our loans, already referred to, without
disturbing the course of trade or caus-
ing a shipment in gold. All the fears
expressed 50 often in the papers, at
these moments, have been proven to be
groundless.


We are now within five degrees of the
specie standard. We have still seven
teen months before us in which to com
plcte the task. The same progress that
has been made since the 1st of March,
continued y months longer, will GER
tainly bring us to the specie standard
| feel confident in saying to you this
day that, if undisturbed, with or without
a change Of the law, every dollar of
United States notes will before the time
fixed for resumption buy as much as an
equal amount in either gold or silver.
A CONSTRUCTION OF THE RESUMPTION
Has often been p 'essed upon the De-
partmcnt that, if correct, would make it
still more easy to carry it into eXccu-
ton. 1t is insisted that the Secretary
has the power, in preparing for resump-
ton, to sell bonds for coin, and then to
sell the coin for United States notes to
be boarded in preparation for resump-
ton. The Department has not acted
upon any such construction, but has
sold gold only in the current course of
business, or for the actual redemption
of notes supplanted by National Bank
notes. If this power is exercised, it
obould only he in nureuancn IF tbo nl,in