Year: 1877

to assume, as an axiom on this subject,
tina, gold aud silver or coined money
have been proved by all human experi-
ence to be The best possible standards of
vf lue, and that paper money is SIMPLY a
promise to pay such coined money, and
should be made and kept equal to coined
money by being convertible on demand.


--.- WHEN AND HOW TO .tREsuMg."


Now the questonis as to the time and
mode by which fthis may be brought
abeut, and on this subJect no man should
be 'dogmatic or stand without yielding
upon plan OF his own, but should be-
willing ogiye and take, securing the best
Iexpedient that public opinion will allow
to be adop ed The purpose and obliga-
ton TO bring our paper money 10 the
standard OF coin have been over aud over
again announced by acts of Congress and
by the platforms of the great political
parties of the country. If resolutions and
promises would bring about specie pay
ments we would have been there long
ago; but the diversity of opinion as to The
mode now-twelve years after the close
OF the war-still leaves our paper money
at discount of dve per cent. Until this
is removed here will be no new enter
prises Involving great sums, no active in
dustries, but money will lie idle and
watch andwait the changes that NAV be
made before we reach the specie stand
ard. In 1869 Congress pledged the pub
lie faith that the United States would
pay gold or silver dollars for United
States notes. Again, in January, 1875
after more than years debate, Congress
declared that by the first of January 1879
the United States would pay its notes in
coin. The Secretary of the Treasury is
expressly required TO prepare for and
maintain the redemption of all United
States notes presented at the Treasury on
and after that date, and for that purpose
he is authorized to use all the surplus
revenue and to sell bonds of the United
States bearing four, four and half and
five per cent interest at par in coin.


PROVIDING AN EASY PLAN.


1t is this law, called the Resumption
act, now so much discussed in the papers
that imposes upon the Office l hold most
difficult and important duties; and with
out replying to any attacks made upon
me am anxious to convey to you per-
sonally what have done and must do in
obedience to the provisions of this act. II
is said that the law is defective, but if
the great object and policy of the law is
right, the machinery of the law could
easily te changed by Congress. That
resumption can be secured and ought to
be secured under this law it will be my
purpose to show you, aud shall not hes
itate to point out such defects in the law
as have occurred TO me in its execution.
There are two modes of resumption
either to diminish the amount of notes to
be redeemed, which is commonly called
a contraction of the currency, or by the
accumulation of coin in the Treasury to
enable the Secretary to maintain resump-
ton. TIE one practical defect the
law is that the Secretary is not at liber-
ty to sell bonds of the United States for
United States notes, but must sell them
for coin. As coin is not in circulation
among the people he is practically pro-
hlbited from selling bonds to The people,
except by an evasion of the law or
through private parties. Bonds are in de-
mand and can adily be sold at par in
coin, and still easier at par, or at prem
ium, in United States notes. The pro-
cess of selling for United States notes
need not go far before the mere fact that
they are receivable for bonds would
bring them up to par in coin, and that is
specie payments.


Reducing the Currency


But the reason OF the refusal Con-
gress to grant this authprity often a SIX
ed of it was that it would contract the
currency and This fear of contraction
has thus far prevented Congress from
granting the easiest ,plaine st, and sures
mode of resumption. To avoid con-
traction it provided that national bank
notes may be issued without limit as
to amount and that when issued Uni
ted States notes might be re-
tired TO the extent of four fifths of the
bank notes issued. This was the only
provision for redeening United Sta'es
notes that Congress made or would
ms ke, and this it was supposed would
reduce the United States notes TO $500
0U0 0U0 before January /, 1879. The
actual experiment only proves the fol-
ly of the cry we had for more money,
more money. Here was free banking.
A free and almost unlimited right To
every body to issue more money but
unluckily for visionary theorists twas
money that had to be secured mot wild
cat moneybut money that people could
sleep upon without fear of breaking.
The result was that under free bank
ing the issue of circulation has been
for less than was expected ana there
fore the reduction of United States
notes was less. Still there was some
reduction. Greenbacks have been re-
tired under the act Of January 1875 to
this time to the amout of $22,9U5, 700
and nearly twenty nine millions of
circulation were issued to national
banks. Since the 1st of March last the
reduction of United States notes has
been So, ,145 264, and this reduction
was proceeded by new circulation is
sued to banks amounting TO near $6,-
500, 900. do not say tnat this is the
oniy reduction of the currency that
has happened but it is the only re-
duction that was made by the United
s ates. The national banks under a
different law and from the very neces-
sily of free banking are at liberty to
retire their currency as well as to in
crease it, and this has been done by


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