Year: 1873




| either in the whole or in part by returning


their own bills for cancellation to an


amount equal TO the face of the bonds
| withdrawn.


| would further suggest for your con-
| sideration the propriety of authorizing


national banks to diminish their standing
| issue at pleasure by returning for can
collation. their own bills and withdrawing
so many United States bonds as are pledged
for the bills returned.


In view of the great actual contraction
that has taken place in the currency, and
the comparative contraction continually
going on, due to the increase of population.
the increase of manufactures and all the
industries, | do not believe that there is
too much of it now for the dullest period
of the year.


Indeed if clearinghouse should be
established, thus forcing redemption. it is
question for your consideration whether
banking should not be made free. retaining
all the safeguards now organized to secure
bill-holders.


In anv modification of the present laws
regulating National Banks, as further
step towards preparing for the resumption
OF specie payments l invite your attention
to consideration of the propriety of
eXacting from them the retention as part
OF their reserve either the whole or part
OF the gold interest accruing upon the
bonds pledged As security for their issue
] have not reflected enough on the bearing
this might have in producing "A scarcity of
coin with which to pay duties on imports
TO give it my positive recommendation, but
your attention is invited to the subject


During the last four years the currency
has been contracted directly by the with
drawai of the three per cent. certificates,
COmnOunI interest and IN hpnI-
outstanding on the 18th of March. 1869 all
OF which took the place of legal tenders in
the bank reserves 10 the extent of sixty
three million dollars. During the same
period there has been much larger COM
parative contraction OF the currency


The population of the country has large
iy Increased; more than twenty-five thou
sand miles OF railroad have been built. re-
quiring the active use of capital to operate
them; millions of acres OF land have been
opened to cultivation, requiring capital to
move the products; manufactures have
multiplied beyond all precedent in the
same period of time, requiring capital,
weekly, tor the payment Of wages and for
the purchase Of material, and probably the
largest OF all comparative contraction
arises from the organizing of free labor in
the south. Now every laborer thus re-
cciyes his wages, and tor want of savings
banks the greater part OF such wages i
carried in the pocket or boarded until re-
CURED for use.


These suggestions are thrown out for
your consideration without any rccommen-
dation that they shall be adopted literally,
but hoping that the best method will be
arrived at to secure such an elasticity of
the currency as Will keep employed all the
industries OF the country and prevent such
an imitation as will put of Indefinitely the
resumption of specie payments, an object
so devoutly To be wished for by all. and by
none more earnestly than the class OF peo-
pie most directly interested-thosc who
earn their bread by the sweat of their
brow. The decisions of Congress on this
subject will have the hearty support of the
( Executive.


TIE SHIPBuILpISG INTERESTS.
In previous messages have called At
I, ntion 10 the decline In American ship
building. and recommended such le.isla-
ton aS would secure TO MS our proportion
| OF the carrying trade, stimulated by high
rates and an abundance OF freight. The
progress for the last year in shipbulding
has been very satisfactory. There has
been an increase of ABOUT three per cent.
in the amount transported in American
vessels over the amount of last wear.
With the reduced cost of material which
has taken place, il may reasonably be
hoped that this progress will be maintain
ed and even increased. However, a we
pay about eighty million dollars per an
nun TO foreign vessels for the transport
tation OF our surplus pruducts to market.
thu, increasing the balance oftrade against
Us 70 this amount, the subject is one worthy
OF Your serious consideration.
INTERNAL TRANSPORTATION.
! Cheap transportation" is subject that
has attracted the attention of both pro-
ducers and consumers for the past few
years, and has contributed to, if ii has not
been the direct cause OF. the recent panic
and strcngency. As Cogress at its last
session appointed a special committee to
investigate this whole subject during vaca-
ton and report at this session have
nothing to recommend until their report is
read. There i one work. however.
OF national character in which 1 will in
vte Your attention.


The State Of New York has a canal con
Meeting Lake Erie with the tide water on
the Hudson river, and the State of Illinois
has similar work connecting Lake Mich
igan with navi"able waters on the Illinois
river, thus making water communication
inland between the East and the West
and South. These great artificial water
courses are the property Of the States
through which they pass and pay toll to
those States. Would it not be wise states
manship TO pledge these States that fthey
will open these canals for the passage of
large vessels the General Government will
look after aud keep in navigable condition
the great public highways with which they
connect, to wit, the overslaugh on the
Hudson. the st. Clair flats and the Illinois
and Mississippi Rivers7


l.
great value to the producers of the West
and South, in giving them cheap tran>por-
tatiOn for their products to the seaboard
and market and the consumers in the East
in giving them cheaper food, particularly
of those articles of food which do not ii nd
a foreign market. and the prices of which,
therefore, are not regulated by foreign and
emands.


The advantages of such a work are too
obvious for argument. | submit the sub
ject to you, therefore, without futher COM
ment.


TRADE WITH SOUTH AMERICA.
In attempting to regain our lost COM
merce and carrying trade | have hereto
fore called your attention to the States
| south of the United States, Offering field


where much might be accomplished to fur
ther this object. | suggest that a small
appropriation De tldue. accompanied WltH


authority for the Secretary OF the Navy to
fit out a naval vessel to ascend the ANA
zon river to the mouth of the Medeira.
thence to explore that river and its tribu-
taries into Bolivia, and to report to Con-
gress at its next session or AS soon as
| practicable, the accessibility of the country
| by water. its resources and the population
so reached. Such an exploration will cost
but little; it can do no harm, and may re-
| suit in establishing a trade of value to
| both nations.


THE TARIFF.


| In further connection with the Treasury
Department would recommend a revision


and codification of the tariff laws and the


opening of more mints for coming money.


with authority to coin for such nations as


may apply.


| POST OFFICE DEPARTMENT.
| A complete exhibit is presented in the


accompanying report of the Postmaster
General. of the operations of the Post Of