Year: 1874

olution, by vote of 144 yeas to 6 nays,
concurring "in the views of the Secretary
of the Treasury in relation to the necessi-
ty of contraction of the currency, with a
view TO as early resumption of specie
payments rs the business interests of the
country will permit and pedging "co-
operative action to this end as speedily as
possible ... ....... E.


The first act passed by the Forty-frst
Congress on the 18th day of March, 1869,
was as follows: .. .


An Act to strengthen the public credit


of the United States.


Be IL enacted, &c., That in order to re-
move any doubt as to the purpose of the
government to discharge all its obligations
to the public creditors, and to settle con-
flicting questions and interpretations of
of the law, by virtue of which such obli-
cations have been contracted, it is hereby
provided and declared that the faith Of
the United States IL solemnly pledged to
the payment in coin, or its equivalent, of
all 1.-THE obligations of the United States,
and of all the Interest bearing obligations,
except in cases where the law authorizing
the issue of any such obligations has ex-
pressly provided that the same may he
paid in lawful money, or in other currency
than gold and silver, but none of the said
interest bearing obligations, not already
due, shall be redeemed or paid before ma
turity, unless at such times as the United
States notes shall be convertible into coin
at the option of the holder, or, unless at
such time, bonds ofthe United States, bear
ing lower rate of interest than the bonds
to be redeemed can be sold at par in coin.
And the United States also solemnly
pledges its faith to make provision at the
earliest practicable period for the redemp-
ton of the United States notes in coin.


This act still remains q continuing
pledge of the faith of the United States " to
make provision at the earliest practicable
moment for the redemption of the United
States notes in coin,"


A declaration contained in the act of
June 30, 1864, created an obligation that
the total amount of United States notes
issued, or to be issued, should never exceed
four hundred millions of dollars. The
amount in actual circulation was actually
reduced to three hundred and fifty-six
millions of dollars, at which point Congress
passed the act of February, 1868, suspend
ing the further reduction of the currency.
The forty-four millions have ever been re-
garded as reserve to be used only in case
of emergency, such as has occurred on sew
eral occasions, and must occur when from
any cause revenues suddenly fall below
expenditures, and such reserve is neces-
sary because the fractional currency,
amounting to fifty millions, is redeemable
in legal tenders on call.


1t may be said that such return OF frac-
tional currency for redemption is impos-
sible But let steps be taken for return to r
specie basis, and it will be found that silver
will take the place of fractional currency,
as rapidly as it can be supplied, and when
the premium on gold reached a sufficiently
low point, with the amount of United
States notes to be issued permanently fixed
within proper limits and the treasury
strengthened as TO be able to redeem them
in coin on demand, it will then be safe to
I'M Irata
such provisions as to make compulsory re-
demption of the circulating notes of the
banks in coin or in United States notes,
themselves redeemable and made euuiya-
lent to coin.


AS measure preparatoryato free bank
ing, or for placing the Government in
condition to redeem its notes in coin at the
earliest practicable moment, the revenues
of the country should be increased so as to
pay current expenses, provide for the sink
ing fund required by law, and also a sur
plus to be retained in the treasury in gold
L am not believer in any artificial method
OF making paper money equal to coin when
the coin is not owned or held ready to re-
deem the promises to pay, for paper money
is nothing more than promises to paw, and
Is valuable exactly in proportion to the
amount of coin that il can be converted
into. While coin is not used as a circula-
ting medium, or the currency of the eoun-
Try Is uOJ convertible INTO 1t at par, IL be-
comes an article of commerce as much rs
any other product The surplus will seek
a foreign market, as will any other surplus. |,
The balance of trade has nothing to do
with the question. Duties on imports be-
ing required in coin creates limited de-
mand for gold. About enough to satisfy
that demand remains in the country To
increase this supply see no way open but
by the Government hoarding7through the
means above given, and possibly by re-
quiring the national banks to aid.
1t is claimed by the advocates of the
measure herewith returned that there is SN
unequal distribution of the banking cape
tai OF the country. / was disposed to give
great weight to this view of the question
at first, but on reflection it will be remen-
bered that there still remains four millions
of dollars of authorized bank note circula.
ton assigned to States having less than
theirquota not yet taken. In addition to
this, the States having less than their quota
of bank circulation have the option of
twenty five millions more, TO be taken nom
those States having more than their pro
portion. When this is all taken up. or
when specie payments are fully restored,
or are in rapid process of restoration, will
he the time to consider the question of
more currency" u. S. GRANT.
Executive Mansion ApriI 1874