Year: 1874

The report OF the Secretary ofthe Treas


ury To Congress, accompanying the Pres


idents message, Is very lengthy docu-


ment, comprising vast amount OF statls-


teal and other Information regarding the


finances OF the country. The Secretary


takes decided ground in favor OF a aresump-


tion of specie payment, and rs what he


says upon this subject is of especial inter


est al this time, we give a portion of his


argument, and his plan for reaching a


specie basis. He says:


II IL not intended 10 cal In question the con


stitutional validity of the legal tender acts, nor


the wisdom Of those who, ia the midst of rebel


lion which taxed the utmost resources and encr-


gies of the nation, deemed the issue o such notes


essential to success. Repeated adjudications of


the highest judicial tribunal of the land sustain.


ing their validity murt be accepted AZ conclusive


of the question. All that is now meant To- be as


serted is, that the eNigences which required the


issue of such notes have passed away, and the
time has come for taking such steps rs may be


necessary 10 redeem the pledge then made. The


power to do SO, as well a the selection Of means


To that end. is with Congress. The Secretary can


do neither more nor less than obey and execute
I such laws as Congress may enact.


While 1t seems To be very generally conceded


that resumption Of specie payment Is essential TO


the honor Of the Government and to the general


welfare the views of intelligent and well in


formed persons As to the best method Of resump
! ton are SO widely divergent, and the plans that


have been suggested multifariOus, that the


secretary feels embarrassed in suggesting "a
I plan the details OF which will commend them
Y selves to Congress. But there are one or two
! fundamental ideas underlying the subject, which


1t is believed, must he the basis Of any practical
Z plan for resumption, and are, therefore, submit


ted for the consideration OF Congress.


Ii Is obvious that there can be no resumption by


the Government 81 long a. the volume of paper
currency L. largely in excess Of the possible
amount of coin available for that purpose which
may come into the Treasury in any year, and
while no provision l. made for the conversion of
this paper money into any thing having a nearer
relation TO coin, nor Is II possible for the banks
or people 10 resume 80 long AZ the large amount
of rTeleemable paper now In circulation contin-
to be by law legal tender for all private debts
with reference both to the past and the future.
While this state Of things lasts gold viii continue
TO flow from Us, and lind employment where the
natural laws of trade unoh-tructed 10y restrain.
ing legislation. make its daily use Indispensable.


The secretary. therefore, recommends Congress
10 provide by law that after an early and liked
day, United states notes shall cease to be legal
tender "a to contracts thereafter made. But this
provision should not apply to official salaries or
10 other ordinary expenditures OF the Government
under then existing contracts or appropriations.
Between the day thus 70 be iNed aud the time Of
final resumption, sufficient period should eapsc
10 enable the people and the banks % prepare for
the latter by such gradual process in business a.
will neither lead 10 violent contraction in credit
and values, nor suddenly increase the obligations
of the debtors. The sudden and immediate appre-
citation of the paper dollar to it, par value in gold
j. not only no necessary element OF redemption,
but, iir practicable. should he avoided. II
during the period Of the the legal tender acts
operated a. "A bankrupt law 3, compelling creditors
% give acquttances upon the receipt Of less than
the full amount OF their debts. this j. reason
why the law for resumption should now compel
debtors at once To pay essentially more than they
contract To pay. The adoption OF such meas
ures as Will not suddenly increase the obi.
cations Of debtors, viii 20 far to allay aud dis
arm whatever popular opposition To resumption
of specie payment NAV now exist, and besides
would be but just 10 the debtor class. The day
from which new contracts must be discharged in
coin should be liked sufficiently far in advance to
give the people and the banks time to understand
II and 50 prepare themselves for IL. IL j. be-
leyed that not many months VIII he necessary for
that purpose. but, % avoid the miSchiefs already
Indicated this day should prccede the ay of final
resumption by longer period. The time should
not n the opinion Of the Secretary. be extended
beyond three years, and might safely be made ~
much less IN tine judgment Of Congrcss would
sufficiently protect the interest of debtors and
avoid the evils of too sudden contraction.


The law should also authorize the immediate
conversion Of legal-tender notes into bonds bear
lng a low rate of interest which, while inv iting
conversion. should not be 80 high as 10 appreciate
the legal tender notes rapidly, ami thereby oper-
ate oppre-svely on the debtor class. As am addi-
nonal inducefnent 10 the conversion of nited
states notes into these bonds alta low rate Of inter
est authority should be given for making them
curify for the circulation Of national banks. The
law should further provide the means for the re-
demption Of such notes az may be presented for
that purpose when the period Of resumption shall
have been reached TO this end the secretary
should be authorized to make loan not
exceeding the total amount of notes re-
manning unconyerted at the time Of
resumption, less the surplus revenue
10 he made applicable 70 such resumption. 1t j.
probable that the gradual and continued revival
Of business will far increase the revenues that


large loan will not be required for this purpose;
but II Is advisable that the Secretary be author
lied t. make II In order to meet the contingency
of failure of sufficient surplus revenues such
a loan should he made by issuing bondsto run for
such time as the wisdom Of Congress may sug-
gest, and to he disposed of from time 10 time as
the necessities Of the may require. In the
opinion Of the secretary these bonds should run
for long period, and should bear interest at a
rate not exceeding the lowest rate which the Gov
eminent may then be paying in refunding its six
per cent securities. Any substantial or useful
movement for resumption necessarily involves
supplying the Treasury with increased amounts
Of coin. either by increased revenues or an 3de-
quate loan. The present condition Of the credit
Of the Government, which would be further en-
HANGED by the adoption of measures for return 10
specie basis, leaves no room for doubt that a
loan for such purpose would be readily taken at
low rate Of interest. Measures should also be
adopted requiring the banks to hold gold re
serves preparatory to resumption on their part.


But the Secretary does not deem il proper To
pursue the matter into further detail. II Con.
gress shall conclude he earnestly hopes il
will, that the time has arrived for the enactment
Of law having for it, object resumption Of spe
Gle payments, Its own wisdom Will supply the
necessary methods. That which IL of the highest
Importance Is the adoption of the definite policy
Of resumption. In view Of the great and press
ing Importance of the spcedicst return 10 specie
payment consonant with steadiness Of business
and avoidance Of violent and sudden contraction
discussion Of mere details in advance becomes Of
little practical consequence. What il demanded
by the best interests of the Government and the
people, and by the highest considerations Of vir.
tue and morality is that Congress shall undo that
state of things which only the necessities of war
justified or required In this respect. A wise mod
ifcation Of existing statutes, which neither cna-
ble or permit the executive branch Of the Govern.
ment TO effect the restoration Of sound curren-
cy, Will leave the laws of trade free TO resume
their operations, and many matters Of de-
tail will adjust themselves. When the
Government shall have resumed specie payment
IL may be expected that gold viii flow into the
country in obedience 10 the law OF supply and de-
mand the export Of our gold product will great |
ly diminish, and the millions Of gold which now |
constitute only a commodity Of trade will resume