Year: 1866

WASHINGTON, March 23.-The following
letter was addressed to day, by the Secreta-
~ of the Treasury, to the Chairman of the
Committee on Ways and Means:


TREASURY DEPARTMENT,


March %, 1866.


DEAR SIR: Your favor of the 22d is re-
ceived transmitting to me the following res
olutiOn. namely:


ResOlued, That a communication be ad-
dressed by this Committee to the Secretary
of the Treasury stating that the Committee
has received through one of its members
information that the Secretary is of the
opinion that he is without further legisla-
tion sufficiently armed with power to carry
out the policy announced in his late annual
report, and to request the Secretary to in
form the Committee whether such is his
opinion.


In reply have to say must have failed
to make myself clearly understood by the
honorable member of the Committee to
whom reference is made. did not intend
to say that the " Secretary, without further
legislation, is sufficiently armed with power
to carry OF the policy announced in his late
annual report" but I did intend to say to
him that if it should be found necessary TO
modify, in any important particular, the
provisions of the bill reported by the Com
mittee, should prefer that it would not be-
come a law. 1t will be, in my opinion ma
tional calamity if fCongress shall fail to grant
additional powers to the Secretary, for II
will be very difficult, if not impossible tc
fund interest bearing notes under the ex-
isting laws, but l do not desire that the
Committee or myself should become in any
| way responsible for law that is likely tC
fail in the accomplishment of its object.
regard it as a matter of the greatest i'm
portanee that the powers of the Secretary
should not be strictly defined. If, for ex
ample, the Secretary should be prohibited
| from selling bonds below par, it would be
easy, as any market in the process of fund
ing must be literally supplied, for the
enemies of the Government to form sue
cessful combination for keeping bonds al
such price as would prevent the negotia-
| ton of them. On the other hand, if the
| authority of the Secretary in this respect il
not limited, no such combinations would bt
| likely to be formed. In my opinion, the
/ best way of keeping the bonds at premium
will be to give to the Secretary unrestrained
| power in their sale. Against an underlined
power it would bedifficult to form successful
| combinations. A limitation Of the author
| ity of the Secretary in this respeot would b
very likely TO prevent funding. l do not
| LleTeIOTtt
regret to have the committee responsible
| In regard to the other important feature o
| the bill, the authority to withdraw U. s
notes, have merely to remark that I con
ceive it to be of vast Importance to the bust
| ness of the country, the welfare of the peo
/ pie and the credit of the nation that such ;
| financial policy should be adopted by thi
| Congress as will prepare the way for re
turn to specie payment. When this can b,
| brought about will depend upon the c1ndi
ton Of national industry and the trade re
lations between the .. S. and foreign na
tions. 1t is not desirable that specie pay
| rnent should be restored until that restOra
tion can be made permanent by increasing
| industry and proper adjustment OF trad'
| with Europe. The tendencies now are all il
the right direction, and if they shall b
adjusted by judiciOus legislation,
shall be hopeful that the currency
of the country may be brought up TO thu
specie standard without a large reduction
| Of 1t. The apprehensions which exist thai
| if power is given to the Secretary to retire
| United States notes the circulation of th'
| country will be ruinOusly contracted, i
without any substantial foundation. If II
reliance can be placed upon the discretion
and carefulness of the Secretary, the verJ
| condition of the finances of the country viii
prevent such a reduction of the currency
as will either make light money marke
or depress business. The authority to re
duce the currency will go very far to pre-
vent the necessity for g reduction. Th'
| battle will be more than half fought whel
the government shall adopt healthy fnan
cial policy.


/ am very truly your ob'dt serv't


(Signed) HUGH McCULLocH,


Secretary of the Treasury.


To Hon. Justin 5. Morrill,, Chairman of tn
| Committee of Ways and Means.