Year: 1875

traoe ulustrate TINS proposition. For every I'M
ported article the consumer must pay to the i'm
porter, besides the cost in gold increased by his
percentage of profit, rs much more as the differ
payment is made. This difference, con commonly monty
called the premium on gold, increases by many
millions the total amount which would otherwise
De required 10 complete all such transactions.


The proper ofhce or currency, whether it be gold
or paper Is to serve as medium Of exchange for
the adjustment Of transactions between buyers and
sellers. When II is sound and stable, receivable
in all parts Of the commercial world, the amount
which actually passes from hand to hand in bust
ness transactions is far below the volume of bust
ness. A small per cent. thereof Is adjusted by
the actual handling of money. Exchanges are
for the most part, made by transfers Of credits
through banks and other agencies. Wherever
exchanges and business transactions arc con-
Quoted on the basis Of coin, and paper convertible
into II, the volume will be regulated by natural
causes. Money, like merchandise, will 90 where
there is demand for it, and where something Of
value can be obtained in exchange for 1t. When
the financial panic Of 1857 created demand for
gold in this country, a ready and continued supply
came steadily from abroad to meet the necessities
Of our people, and brought speedy relief. Now.
not only obstruets the flow Of gold from abroad
but drives from the country the precious metals
yielded by our mines.


Good and bad currency cannot be retained in
anything like equal proportions in a country hav-
ing commercial relations with other Powers and
peoples. The latter will drive away the former
of the commercial world where business is done on
the basis of an unyarying standard of values, and





precious metals at the option of the holder. be-
cause they are needed there. Such is the ineyita-
Bile operation Of the law of supply and demand;
and the present limited and Inadequate supply Of
coin in this country is chiefly due TO this cause.
Gold has become q commodity of trade, the price
Of which from day to day depends largely upon
the Will OF those who have combined to cOptrol
the market, This presents a serious obstruction
To all productive industries and commerce. and
introduces into business transactions element
of uncertainty, which often unsettles the most in
telligcnt calculations, and tends to destroy conf
dence, without which there can be no real or per-
manent prosperity. Apparent, but fictitious pros
perity has often followed large issues of irredeem,
able paper currency, but no result is more certain
to how from given cause than disaster and
financial distress to follow period Of imitation Of
business and credit caused by excessive issues Of
paper currency. The philosophy which teaches
by example, as well as the deductions Of reason,
establishes eonelusyely that there is no effective
remedy for the evil but the removal of its cause.


The circumstances attending the issue of the
United states notes now in circulation imposs
upon the Government peculiar Obligation to
provide for their speedy and certain redemption in
coin. They were issued In the exercise Of q power
which can be called into use only in time of su-
preme necessity, and were paid out for the sup
port of an army composed Of brave and patriotic
citizens who had responded to the call Of their
country in the hour Of Its extreme peril Tosuffer
promise made at such a time and under such
circumstances to be dishonored by subsequent in
ter than open repudiation. and wouId affect iniT
riously our national name and credit.


1t is worthy of note that for the most part those





notes, and who ask for o further issue and con-
tinued and indefinite reissue of the notes now in
circulation, were most strenuous in their opposL
tiOn to such issues during the civil war. The acts
authorizing such issues were denounced as in yiO-
lation of sound principles Of finance and not war
ranted by the Constitution. Their constitutional
validity was resisted at every point and subjected
to the test Of judicial decision in almost every
court in the country, both State and national.


The supreme judicial tribunal of the nation up
held the acts as measures Of necessity in time or
great exgency, but it has neither decided nor in
timated that such power may be exercised by Con
fairly inferable from all the court has said in the
various cases in which the question has been be-
fore it. that the issue of such notes In time Of peace


Is not within the constitutional power Of Congress
The language and argument of the court leave no
reason TO believe that II would sustain the claim
Of power to increase the volume Of such issues or
to reissue such as have been redeemed in obedi-
eflce 10 law, when the public exigeney no longer
exists. Those who opposed such Issues at time
Of sipremc necessity, and insist upon further Is
sues when the emergency has passed away, put
themselves In the attitude Of opposing war meas
ures in the midst Of war, and advocating them In
time of profund peace. Congress carefully con-
cessity by authorizing ''the reissue from time to
time, as the exigencies public interests shall
require"


considerations and proper regard for the interest
of the people, but by express and repeated prom
ises to provide for the redemption in coin Of all
its issues Of legal-tender potes. The original
legaLtender act was regarded and treated at the
time of its adoption as temporary measure, made
necessary and justifable only by tho e1igency Of
war, which taxed all the resources and energies
oil the nation. The first act authorizing such is
sues (February Is, 1882 is entitled AN act to
authorize the issue of United States notes. and for
the redemption or funding thereof, and for fund
ing the floating debt of the United States''-lan-
guage that significantly expresses the views of
lied the issue of l50,000.OO0 legaltender notes.
and made provision for funding them in bonds is
sued on the credit Of the Government, bearing in
terest in gold, and payable at future day. This
was the best the Government could do in the
midst Of its struggle for existence and rightful


The state of the public credit did not admit the
possibility Of the immediate procurement Of n
sufficient amount Of coin to redeem the notes abso-
lutely A wellsettled principle Of political econ
omy forbade the issue Of paper currency without
providing for its redemption, and, in obedience
thereto, Congress made the only practicable pro-
thoriZcd to be issued and stamped with the quality
of legal tender. The act of July IL, 1882, which
authorized further issue of $50 900 O00.eontanei
a like provision, and further provided that any
notes issued Hereunder might be paid in eOin in
stead Of being converted into bonds at the discre-
tion of the Secretary Of the Treasury. The notes
thus authorized were issued and accepted by the
people upon the assurance that they had the right
70 fund them in gold; bearing bonds Of the United
tuted an important element of their value, and
gave them quality in aid oftheir circulation and
free acceptance in all business transactions. In
tho opinion Of wise and patriotic men, who, as
the Representatives of the people, were charged
with maintaining the indlssolubility and supre-
macy Of our national Union, IL was necessary to
resort to this extraordinary measure for the pur-
pose Of carrying the war to successful termina-
ton 1t was, In substance and effect, national
war loan, based upon the credit of. the Govern
ment and coupled with pledge for redemption,
but the period ofpayment was hereafter to be de-
termined when the public exigeney would permit


IL was not in the minds of those who devised
and eonsummated the scheme that the Govern
ment was about to enter upon the issue Of ire
deemaole paper currency, which should perma-
nently take the place Of the worlds measure Of
values. Nor was it claimed by the most earnest
advocate of the measure that the Constitution
had given to Congress power to issue permanent
paper currency as 0. substitute for, and stamped
by law with, the qualities which, in the estima-
tion of political economists, could exist only in
the precious metals. In the light OF the expe-
rience Of tho civilized world, such purpose would
have been regarded rs little better than financial
madness, and its ayowal by the authors OF the
legal-tcnder acts would surely have caused the
defeat Of the plan for exerting the borrowing
power Of the Government by means Of such issues
But the purpose and meaning Of the acts in ques-
ton are not left open for forensic discussion hay-
ing been authoritatively settled by the unanimous
opinion oi INC nghest Judieisi trionnal known 70
OF the war as 1888 ii was argued before the Su-
preme Court that the legaItender notes of the
for metallic currency, and that, having been made
legal tender In payment Of all debts, including
with certain exceptions) the Governments own,
notes. being legal tender were offered in exchange
for them, the debt would be discharged by deliy-
cry OF new notes, and 50 on dG tlnntfunl- To this
argument the court replied


Apart from the quality Of legal tender i'm
pressed upon them by acts Of Congress. of which
we now say nothing, their circulation currency
depends upon the extent TO which they are re-
eetvcd In payment on the quantity in circulation,
and on the credit given to the promises they bear
In other respects they resemble the bank notes
formerly issued as currency.


sBut, on the other hand, IL Is equally clear that
these notes are obligations of the United States
Their name imports obligation Every one ofthem
expresses upon Its face an engagement Of the na-
tion to pay the bearer a certain sum. The dollar
note is an engagement to pay adollar and the dol
lar intended Is the coin dollar of the United States
certain quantity in weight and nneness Of gold
or silver, authenticated as the stamp ofthe
Government"


This authoritative declaration Of the Supreme
Court defines clearly and precisely the meaning
and intent Of Congress In the acts which author
lied the issue, and should be accepted as eonelu-
siye of the obligation and duty of the Government
to provide for The payment in specie Of all such
issues. aH
Nor Is this all. Subsequent TO this decision and
for the purpose of putting quietus upon the mis-
cheyOus discussion Of the subject Congress on the
18th day of March, lso9 declared by public act that
''the United States solemnly pledges its faith to
make provision at the earliest practicable period
for the redemption Of the United States notes In
coin-n -.--..--.-
These provisions Of the various acts OF Congress,
which were passed with the approval of the Exc
eutiye, the clear adjudication OF the Supreme
Court, as we'll as the plainest principles OF politl
cal economy, and proper regard for the public well
fare, commit the Government to the redemption in
coin Of the notes issued under the circumstances
before stated. National faith and honor could not
DO more distinctly and unequiyocally pledged to