FINANCES OF THE UNITED STATES. 



265 



The importance of early action in this mat- 

 ter can not be over-estimated. At the present 

 compulsory rate of coinage of the silver dollar, 

 it is only a question of time when the silver 

 dollars will banish the gold coins from circula- 

 tion, and reduce the whole currency of the coun- 

 try to a silver basis. 



Indications already appear that gold is being 

 hoarded by the banks and other parties with 

 a view of taking advantage of this anticipated 

 change in the standard ; and it is possibly with- 

 in the power of a Secretary of the Treasury, 

 with 110 greater amount than the present re- 

 serve of silver, to bring about such a change at 

 any time. Until legislation can be had which 

 shall in some way cure these evils, the country 

 can hardly be said to have a sound currency. 



There is also a needless diversity of curren- 

 cies. In addition to the silver dollar the law 

 authorizes the coinage of half-dollars, quarters, 

 and ten-cent pieces in silver of the same stand- 

 ard, but not of proportionate weight with the 

 silver dollar. A dollar of these coins weighs 

 but 385'8 grains, or nearly 6| per cent, less 

 than the standard silver dollar. At the pres- 

 ent market rates of silver a dollar of these 

 fractional coins is worth about eighty-two 

 cents. They are a legal tender in payment of 

 debts only to the extent of ten dollars, and are 

 redeemable in lawful money at the Treasury of 

 the United States. These coins were intended 

 only as a convenience for making change, but 

 their circulation has become so redundant that 

 the Government has been obliged to treat them 

 as a debt and redeem them; and on January 

 1, 1881, they had accumulated in the Treasury 

 to the amount of $24,769,057.32. Owing to 

 the'r limited legal-tender quality, the Depart- 

 ment is unable to pay them out ; and, while 

 the Treasury holds and owns them, they are as 

 unavailable for all purposes of currency as if 

 still remaining in ingots or bars. 



In addition to these silver coins, there are 

 also afloat to a greater or less extent the so- 

 called trade-dollars issued under authority of 

 the coinage act of 1873, under which any 

 owner of silver bullion was authorized to de- 

 posit such bullion at any mint, to be formed 

 into bars, or into dollars of the weight of 420 

 grains Troy, the expense of the conversion to 

 be paid by the depositor. This trade-dollar was 

 made a legal tender to the amount of five dol- 

 lars; but this legal-tender quality has since 

 been taken away. As its name indicates, it 

 was intended for trade purposes only, and 

 the Government had no interest in its produc- 

 tion. It has none of the attributes of a circu- 

 lating medium except, perhaps, its form ; and 

 it was not intended to circulate as money in 

 this country. At the time of the passage of 

 the act the silver required to make a trade-dol- 

 lar could not be purchased for less than one 

 dollar and four cents in gold ; consequently, 

 there was no object in having the silver coined 

 into dollars of this kind for circulation here, 

 and, for a time, they were exported as intended. 



Owing to the depreciation in the price of sil- 

 ver in the fall of 1877, the amount of silver 

 required for the manufacture of one of these 

 coins could be purchased for less than a dollar 

 in paper currency ; and speculators, taking ad- 

 vantage of this condition of affairs, stopped the 

 shipment of the coins abroad and turned about 

 three millions of them into the channels of 

 circulation. Their further coinage for any pur- 

 pose was peremptorily stopped ; but, though 

 their circulation is a constant annoyance, the 

 Government seems unable to furnish any fur- 

 ther relief. Should authority be given to pur- 

 chase them for coinage into the standard legal- 

 tender dollar, dollar for dollar, the foreign hold- 

 ers of the $30,000,000 of this coin would find 

 it greatly to their profit to send them all back 

 to this country for the recoinage proposed, 

 providing, of course, that the standard silver 

 dollar should circulate as it does now at a gold 

 valuation. Should the silver dollar ever circu- 

 late upon its own valuation, the trade-dollar, 

 containing more silver, would be worth more 

 than the standard dollar and would of itself 

 disappear, being more valuable for bullion than 

 for circulation. 



Besides the silver coins, there are the minor 

 coins made of copper and nickel issued by the 

 Government for lawful money, and redeemable 

 therein. Only the inconsiderable amount ne- 

 cessary for making change remains outstanding. 



In addition to the metallic currencies above 

 enumerated, the country has also several kinds 

 of paper currency, the most important of which 

 are the United States notes issued und^r the 

 act of February 25, 1862, and subsequent acts. 

 They are by law made a legal tender in the 

 payment of all debts, public and private, ex- 

 cept duties on imports and interest on the pub- 

 lic debt. By act of January 14, 1875, they 

 have been redeemable in coin since January 1, 

 1879, at the sub-Treasury in New York, but up 

 to November 1, 1880, there were presented for 

 redemption only $11,963,336. During the same 

 period these notes were received in lieu of coin 

 in payment of duties on imports, to the amount 

 of $142,323,601, and the notes thus received 

 were paid out in lieu of coin for interest on the 

 public debt and for other purposes. 



The Government, however, reserves the right 

 to exact coin in payment of duties, and will 

 doubtless enforce it whenever holders of bonds 

 object to receiving United States notes in pay- 

 ment of interest. The amount of these notes 

 outstanding is fixed by law at $346,681,016. 

 As they are redeemable in " coin," they can be 

 redeemed either in silver dollars or gold ; and 

 their value consequently depends upon which 

 standard is maintained. A change from the 

 gold to a silver standard, the price of silver 

 remaining as at present, would at once reduce 

 the purchasing power of the notes about 10 

 per cent. 



The national banks also furnish a large por- 

 tion of the circulating medium of the country. 

 Their notes are redeemable in lawful money, 



