Year: 1874

for the banks or people 10 resume so long as the
large amount OF irredeemable paper now IN circn.
private debts with reference both to the past and
the future. While this state OF things lasts gold
will continue 10 now from us, and find employment
where the natural laws OF trade, unobstructed by
restraining legislation makes Its daily use tndis-
Congress 20 provide by law that alter an early and
nxed day United states notes shall cease TO be
legal sender an to contracts thereafter made. Bus
this provision should not apply TO ofclal salaries
or TO other ordinary expenditures OF the Gov
ernment under then existing contracts
or appropriations Between the day thus TO
be nxed and the time OF final resumption a suf-
fcient period should eapse TO enable the people
and banks TO prepare or the latter ey snca
TO violent contraction In credit and values nor
suddenly increase the obligations OF debtors. The
dollar TO its par value In gold Is not only no neces
sary element OF redemption, but, as far as practi-
cable, should be avoided. II during the period Of
the war the legal tender acts operated as bank.
rupt law. compelling creditors to give acquttances
upon the receipt OF less than the full amount OF
their debts, this 10 no reason why the law for
resumption should now compel debtors at once to
pay essentially more than they have contracted to
suddenly increase the obligations OF debtors win
60 far to aliay and disarm whatever popular oppo-
e1s and Sesaes would be ou uss to the debtor
clasa The day from which new contracts must be
discharged IN coin should be fixed sufficiently far
In advance TO give the people and the banks time
TO understand II and TO prepare themselves for IL
1t Is believed that not many months will be neces-
already indicated, this day should precede the day
OF final resumption BY longer period. The time
should not in The opinion OF the Secretary, be ex
tended beyond three years, and might safely be
made as much less as in the Judgment Of Congress
would sufficiently protect the interests OF debtors
The law should also authorize the immediate con-
version OF legal tender notes into bonds bearing
low rate OF interest, which, while inviting
appreciate the legal tender notes rapidly, and
thereby operate oppressivey on the debtor
RI ha
SION Of United states notes into these bonds
At low rate OF interest, authority should be
OF national banks. The law should further pro-
vide the means i0r the redemption OF such notes
nerod OF T shall nave Seen .as
TO this end the secretary should be authorized TO
make loan not exceeding the total amount OF
notes remaining unconverted at the time OF re-
sumption, less the surplus revenue to be made
applicable to such resumption. 1t Is probable that
the gradual and continued revival OF business
Will SO far increase the revenues that large loan
Will not be required for this purpose but 1t Is ad-
visable that the secretary be authorized 70 make
it in order 70 meet the contingency OF failure OF
sufficient surplus revenues. Such loan should
be made by issuing bonds to run for such time as
disposed OF from time to time as the necessities
OF the case may require. In the opinion OF the
Secretary these bonds should run for long PERIOD
and should bear interest at rate not exceeding
the lowest rate which the government may then be
paying IN reiunding ITS Six per cent securities.
Any substantial or useful movement for resump-
tion necessarily involves supplying the Treasury
with increased amounts or coin, either by In.
ent condition OF the credit OF the government,
which wosld be further enhanced by the adoption
OF measures for return to specie basis, leaves no
room for doubt tnat loan for such purpose would
be readily taken at low rate or interest Meas.
ures should also be adopted requiring the banks
on their part. But the Secretary does not deem
II proper to pursue the matter into further detail


ss e ne op sss hopes
ment OF a law having for its object resumption Of
specie payments, Its own wisdom Will supply the
necessary methods That which Is or the highest
Importance Is the adoption or the definite policy
OF resumption. In view Of the great and pressing
Importance OF the speediest return to specie pay
ment consonant with steadiness Of business and
avoidance OF violent and sudden contraction, dis
cussion OF mere details IN advance become OF little
best interests OF the government and the people,
and by the highest conslde rations OF virtue and
morality, Is. that Congress shall undo that state OF
things winch only the necessities OF war justined
or required In this respect. wise modification
OF existing statutes whicn neither enable nor per-
init the executive branch OF the government TO
effect the restoration OF sound currency, VIII
leave the laws OF trade tree to resume their opera
tions, and many matters OF detail will ADJUST them
selves. When the government shall have resumed
specie payment 1t may be expected that gold will
supply ana demand: the export OF our gold pro-
duct will greatly diminish and the millions OF gold,
which now constitute only commodity OF trade,
Will resume their proper functions by becoming
again part OF the circulating medium. With the
adoption Of the policy of resumption, Tree banking





amount OF coin available for circulation can be
supplied BY bank notes convertible into coin, in
business Of the country has yet recovered from
the disasters OF the last years financial panic the
causes o wnicn II Is 6y no means diicult to trace
cessive development OF speculative enterprises
over-tradinG, and Imitation Of credit which lnvar.
ably follow large Issues OF lncOnvertible paper cur.
rency. The almost boundless resources and ener-
giles OF the country must compel the gradual re-
establishment OF business; but capital, with its
ACCn9tOme0 8eQ9tt1Vene2l
return to the avenues OF trade. Values are
iuctuating and uncertain Labor receives
steady. and whose purchasing power changes
almost daily. Neither the reward OF labor
certain standard: The enactment OF law having
for Its purpose the substitution OF sound and
staple medium oil exchange for an irredeemable
and thus cause revival OF industries and general
business. There will be no better time in the
future to enter upon the work OF returning to a
specie basis, and the Secretary iees that he can.
NOT too strongly urge the adoption Of the measures
tainly LEAD to the desired end.


ECONOMY AND HONEST APPROPRIATIONS.


The Secretary contends that not only Is rigid
economy required by reason Of the present condl-
tion Of the public revenues, but fidelity to obliga-
tlons and a just sense OF responsibility to the
people, demand 1t, as the confidence OF the
as the government is faithfully, honestly and
economically administered, or otherwise. When
It is understood that not dollar is taken from
the people by taxation beyond what s need1ul for
the legitimate purposes of the government, they
Will not withhold their confidence or refuse to
support Its financial measures At such time
loans are freely taken and taxes cheeruly paid.
IL Is essential to the proper strength of the gov.
ernment at home, as well as to Its credit abroad,
to.carry on its necessary operations and to main.
tain the national faith and honor by prompt pay
ment or all It's obligations, and when SUCH reve-
nues are collected 1t Is no less Important that
they be faithfully and exclusively applied
to- The legitimate purposes OF government





THE NATIONAL BANKS


given In che report OF the Comptroller OF the Cur
rency (Which have already been published In the
HERALD the secretary con cludes that there Is a
large amount OF currency In excess OF the legiti.
mate needs OF business, and should serve. to dis.
pei the fallacy that greater expansion of currency
IL the proper remedy Tor the general depression
and contraction 0i the volume or business.


COINAGE.


The amount OF bullion operated upon during the
fiscal year was:-Gold, S6S, S6l, ,594 silver SIS.
122 Isl. Total, $S3 9S3, 746 Deducting redeposits