Year: 1874

THE NATIONAL FINANCES.


VIEWS OF THE PRESIDENT ON DESIRABLE
FINANCIAL LEGISLATION.


WAsHINGToN, June B.


At the request Of. Senator John T. Jones' of
Nevada, to whom, in company with others,
the President recently read memoranda of
his views on the subject of desirable legisla-
tion on finance, the memorandum then read
has been made public. The President, in his
letter to Senator Jones, acceeding to the re:
quest, says: at is proper that 1 should
state that those views were reduced to writing
because had been consulted on this question,
not only by some members of the conference
committee, but by many other members OF
Congress. To avoid any and all possibility
of misunderstanding deemed this course both
iusti6able and proper" The Presidents
memorandum is as follows:


II believe it a high and plain duty to re-
turn to specie basis at the earliest practlc'
able day. not only in compliance with leg!s-
lative and party pledges, but as step lndls-
pensable to lasting national prosperity. De-
iieve further, that the time has come when
this can be done, or at least begun, with less
embarrassment to every branch of industry
than at any future time, after resort has been
had to unstable and temporary expedients to
stimulate unreal prosperity and speculation on
bases other than coin, the recognized medium
of ofexchange throughout the commercial world.
The particular mode selected to bring about
restoration of the specie standard is not OF so
much consequence as that some adequate plan,
be devised, the time fixed when currency shall
be exchangable for coin at par, and the plan
adopted rigidly adhered to. 1t is not prob
able that any legislation suggested by me
would prove acceptable to both branches OF
Congress-, and, indeed, full discussion might
shake my own faith with details of any plan
might propose. I will, however, venture to
state the general features of the action which
seems to me advisable, the financial platform
on which I would stand, and departure from
which would be in spirit of conference and
harmony in Difference to conflicting opinions.


"First. I would like to see the legal ten
der clause, so called, repealed, the repeal to
take effect at future time, say July !, 1879.
This would cause all contracts made after
that date for wages, sales, &C., to be estimat.
ed in coin; it would correct our note and
coin value the specie dollar would be the on
ly dollar known as the measure of equivalents
When debts afterwards contracted were paid
in currency, instead Of calling the paper dol
lar dollar, and quoting gold at so much
premium, we should think and speak OF pa
per as at so much discount This alone
would aid greatly in bringing the two cur
rencies nearer together at par.


Second I would like to see provision
that at fixed day, say July 1, 1876, the cur.
rency issued by the United States should be
redeemed in coin on presentation to any as
sstant treasurer, and that all currency so re-
deemed should be cancelled and never reis-
sued. To effect this it would be necessary to
authorize the issue of bonds payable in gold,
bearing such interest as would command par
in gold, to be put out by the treasury, only
in such sums as should from time to time be
needed for the purpose of redemption. such
legislation would insure return to sound IL
nancial principles in two years, and would, IN
my Judgment, work less hardship to the debt
or interest than is likely to come from putting
off the day of final reckoning.


"It must be borne in mind, too, that the
creditor interest had Its day Of disadvantage
also when our present financial system was
brought in by the supreme needs of the ma
tion at the time. I would further provide
that from and after the date fixed for redemp-
tion no bills, whether of national banks or OF
the United States returned to the treasury to
be exchanged for new bills, should be replac.
ed by bills of less denomination than ten dol
lars, and that one year after resumption all
bills of less than five dollars should be with
drawn from circulation, and in two years all
bills of less than ten dollars should be with
drawn.


"The advantage of this would be the
strength given to this country against time
ofdepression resulting from war, failure OF
crops, or any other cause, by keeping always
in the hands of the people large supply of
the precious metals. With all smaller tran.
sactions conducted in coin many millions OF
it would be kept in constant use and of course
prevented from leaving the country.


"Undoubtedly a poorer currency will al
ways drive the better out of circulation. With
paper legal tender and at discount, gold
and silver become articles of merchandise as
much as wheat or cotton. The surplus will
find the best market it can. With small
bills in circulation there is no use for coin
except to keep it in the vaults Of the banks
to redeem circulation. During periods of
great speculation and apparent prosperity
there is little demand for coin, and then 1t
will flow out to a market where it can be
made to earn something, which it cannot do
while living idle. Gold, like anything else,
when not needed becomes surplus, and, like
every other surplus, it seeks market where
it can find one. BY giving active employ
ment to coin, however, its presence can, 1t
seems to me, be secured, and the panics and
depressions which have occurred in times OF
nominal specie payments, if they cannot be
wholly prevented, can at least be greatly NIT.
igated. Indeed, question whether it would
have been necessary to depart from the stand
ard of specie in tbs trying day which gave
birth to the first legal tender act, had the
country taken the ground Of no small bills as
early as 1850.


"Again, 1 would provide an excess of reve-
nue. over current expenditures. l would DO
this by rigid economy and by taxation where
taxation can best be borne. Increased reve.
nue. would work a constant reduction of the
debt and interest, and would provide coin to
meet demands on the treasury for the redemp-
tion of its notes, thereby diminishing the
ament of bonds needed for that purpose. All
taxes, after redemption begins, should be paid
in coin or United State notes. This would
force redemption on the national banks. With
measures, like these, or measures which would
work out such results, see no danger in au-
thorizing free banking without limit"


Wy mn Doy, A oortoin dootor