Year: 1874

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of the nation and Of the people. Steps
toward the return to specie basis are
great requisites devoutly to be sought
for, and there are others which may
touch upon hereafter. A nation dealing
in currency below that Of specie in
valuable labors under two great disad-
vantages: First, having no use for the
worlds acknowledged mediums Of ex-
change, gold and silver, those are driven
out Of the country because there is no
demand for their use second, the me-
dun Of exchange in use being Of Auc-
tuating value, for after all it is only worth
just what it will purchase of gold and
silver-metals having an intrinsic value
just in proportion to the honest labor it
takes to produce them.


A large margin must be allowed for
profit by the manufacturer and producer.
1t is months from the date of production
to the date of realization. Interest upon
capital must be charged, and risk of
fluctuation in the value of that which is
to be received in payment added, hence
high prices acting as protection to the
foreign producer, who receives nothing
in exchange for the products Of his skill
and labor except currency good at sta
BILE value the world over. 1t seems to
me that nothing is clearer than that the
greater part Of the burden Of existing
prostration, for the want of a sound
financial system, falls upon the working
man, who must, after all, produce the
wealth, and the salaried man who super
intends and conducts business. The
burden falls upon them in two ways, by
the deprivation of employment and by
the decreased purchasing power Of their
salaries.


REPEAL OFlTHE LEGAL TENDER ACT RE


COMMENDED.


1t is the duty of Congrers to devise the
method of correcting the evils which are
acknowledged to exist, and no more; but
| will venture to suggest two or three
things which seem to me as absolutely
necessary to return Of specie payments,
the first great requisite in return to
prosperity, The legal tender clause to
the law authorizing the issue of currency
by the National Government should be
repealed, to take effectas to all contracts
entered into after the day fixed in the
repeating act, not to apply, however, to
payment Of salaries by Government or
for other expenditures now provided by
law to be paid in currency in the interval
pending between repeal and final re-
sumption. Provisions should be made
by which the Secretary Of the Treasury
can obtain gold as it may become neces-
sary from time to time, from the date
when specie redemption commences.
To this might and should be added
revenue sufficiently in excess ofexpenses
to insure and accumulation of gold in the
Treasury to sustain redemption. COM
mend this subject to your careful consid-
Grafton, believing that favorable solu-
ton is ottainable, and that is reached by
this Congress, that the present and future
generations will ever gratefully remem-
Der it as their deliverer from thraldom
of evil and disgrace.


FREE BANKING,


With resumption, free banking may be
authorized with safety, giving the full
protection to bill holders which they have
under existing laws. Indeed, | would
regard free banking as essential 1t
would give proper elasticity to the cur
rencies; as more currency should be re-
quired for the transaction of legitimate
business, new banks wonld be started,
and in turn banks would wind up their
business when it was found that there
was a superabandance Of currency. The
experience and judgment of the people
can best decide just how much currency
is required for the transaction of the bus
iness of the country. 1t is unsafe to leave
the settlement of this question to Con-
gress, the Secretary of the Treasury or
the Executive. Congress should make
the regulation under which banks may
exist, but should not make banking a
monopoly by limiting the amount of re-
deemable paper currency that shall be
authorized. Such importance do at
tach to this subject, and so earnestly do
l commend it to your attention, that
give it prominence by introducing it at
the beginning ofthis message.


CONTINUED FRIENDLY RELATIONS WITH


OTHER POWERS


During the past year nothing has oc-
CURED to disturb the general friendly and
cordial relations of the United States
with other powers. The correspondence
submitted herewith between the Govern
ment and its diplomatic representatives,
as also with the representatives of other
countries, shows satisfactory condit
ion Of all questions between the United
States and the most of those countries,
and, with few exceptions, to which ref
erence is hereafter made, the absence of
any points of difference to be unjusted.
The notice directed by the resolution of
Congress Of June II, 1874, to be given
to terminatethe convention of July II,
1858, between the United States and
Belgium, has been given and the treaty
will accordingly terminate on the Ist day
of July, 1876 This convention secured
to certain Belgium vessels entering the
ports Of the United States exceptional
privileges which are not accorded to our
own vessels. Other features Of the con-
vention have proved satisfactory, and
have tended to the cultivation Of mutual
ly beneficial commercial intercourse and
friendly relations between the two coun-
tries. hope that negotiations which
have been invited viii result in the cele-
bration of,another treaty which may tend
to the interests Of both countries. al


Our relations with China continue to
be friendly. During the past year the
fear ofhostilities between China and Ia
pan, growing out Of the landing Of an
armed force upon the Island Of Formosa
by the latter. has occasioned uneasiness.
Il Is earnestly hoped, however, that the
difficulties arising from this cause will
be adjusted. and that the advance Of
civilization in these empires may not be
retarded By state of war. In eonse-
quence Of the part taken by certain citi-
Eens Of the United States in the expedi-
tor, our representativesin those Countries