86 Wisconsin Academy of Sciences, Arts, and Letters. 



gold in the country, which is itself depreciated say thirty per 

 cent, below what its value would be under a strictly revenue 

 tariff. So long as the present high duties are maintained, the 

 depreciation of the gold will continue, and we will only have 

 to overcome the present premium on gold by contraction of 

 the paper volume to that extent, in order to maintain specie 

 payments. But, repeal the tariff entirely, and gold in this 

 country would immediately resume its normal value and shoot 

 up to about fifty-three per cent, premium, and we would see 

 just ho'.v far, between tariff and paper inflation, we have 

 drifted with our currency, from a normal specie basis. Re- 

 duce the duties to a revenue standard, and the Fpremium on 

 gold would at once rise to fully forty-four per cent., and we 

 would be compelled to overcome that by a like contraction of 

 the currency before specie payments could be maintained. 

 It should also be noted that, in returning to specie payments^ 

 the gold which we have demonetized must be drawn from the 

 general stock of the world to resume its functions as money 

 in this country, and thus the whole stock of gold will be ap- 

 preciated in value as much as it was depreciated in the pro- 

 cess of demonetization, and will add one, two or three per 

 cent., whatever it is, to the depreciation of our currency, and 

 which must be overcome by contraction. Such a contraction, 

 even if extended through a whole year, would doubtless be 

 seriously felt by the business interests of the country, though 

 it would be trifling compared with those which used to occur 

 under the old bank suspensions, when the currency was con- 

 tracted, sometimes to the extent of fifty or sixty per cent, in 

 sixty days. I am satisfied that much of the dread of contrac- 

 tion results from the memory of the violent and sudden con- 

 tractions of 1837 and 1857, which sprung like a steel trap 

 upon its unsuspecting victims. But contraction is an absolute 

 necessity if we are ever to return to a specie basis. True,, 

 some politicians, who pass for statesmen, talk of resumption 

 without contraction of the paper volume; but a tyro in eco- 



