FINANCES OF THE UNITED STATES. 



289 



* To H',1, when th coln)f wu Interrupted by the civil WIT. 

 VOL. XIII. 19 A 



The views of the Government relative to the 

 expansion and contraction of the currency are 

 expressed in the following remarks of the Sec- 

 retary of the Treasury : 



There is a prevailing sentiment that more elas- 

 ticity should be given to the volume of the currency, 

 so that the amount in circulation might increase and 

 diminish according to the necessities of the business 

 of the country. But the difference of opinion on this 

 subject is so great, and the real difficulties attending 

 its solution are so numerous, that, without discussing 

 any of the multitude of plans which have been pre- 

 sented to the public through the press and otherwise, 

 I earnestly commend to the wisdom of Congress a 

 careful and thorough consideration of this important 

 subject, rendered more obviously important by the 

 present embarrassed condition ot large business in- 

 terests which have suffered by the recent financial 

 crisis ; and that, in such inquiry, avoiding further 

 inflation of the issue of irredeemable legal-tender 

 notes, the most desirable of all financial results to be 

 attained, namely, a permanent return to the sound 

 basis of specie payments, and a gold standard to 

 which all our paper issues shall be made of equal 

 value, shall be the aim. 



To allow national banks to use part of their re- 

 serves at seasons of the greatest pressure, under 

 proper restrictions and regulations, would afford some 

 flexibility. 



Rigid statute laws applied to all banks, at all sea- 

 sons, and in all places alike, often prove an embar- 

 rassment and injury when they conflict with eco- 

 nomic principles and the laws ot trade and business, 

 which are stronger than legislative enactments, and 

 cannot be overthrown thereby. Associated banks at 

 the several redemption cities named in the banking 

 law, which are the great controlling centres of busi- 

 ness, might do much to give steadiness and safety, 

 if they were authorized, through properly-constituted 

 boards or committees of their own officers, to exer- 

 cise a large discretion in the use of their reserves, in 

 the rate of interest to be charged at different seasons 

 and under different circumstances, and in other mat- 

 ters, within limits prescribed by law. 



Should it be deemed necessary or expedient to 

 temporarily enlarge the paper-money circulation in 

 cases of great emergency, provision may be made to 

 permit the national banks, under certain circum- 

 stances to a limited extent, to increase their note cir- 

 culation by a pledge of United States bonds, bearing 

 no interest while so pledged, or subjecting the banks 

 to special taxation upon the circulating notes ob- 

 tained thereon, or upon such other terms that it 

 would be for their interest to recall the notes and re- 

 deem the bonds at the earliest possible day after the 

 pressure and their necessities should have ceased. 



But any large augmentation of the issue of United 

 States legal-tender notes in time of peace would not 

 only be a departure from that " declaration of public 

 policy and pledge of the public faith to the national 

 creditors," made in the act of June 30,1864, that the 

 total amount of such notes shall never exceed four 

 hundred million dollars, as well as from that more 

 solemn pledge contained in the first act of the Forty- 

 first Congress, ''to make provisions at the earliest 

 practicable period for the redemption of United 

 States notes in coin." but would postpone the day of 

 specie payments and render it more difficult to attain 

 in the distant future, unsettle confidence in our na- 

 tional finances and be a serious detriment to public 

 credit at home and abroad. 



There can be no doubt that during the eight years 

 since the rebellion there has been a growing desire 

 among the people to restore the paper circulation to 

 a specie standard, and that any steps taken to accom- 

 plish that object will be received with general favor. 



It is not possible to resume and maintain specie 



Eayments with so large an amount of notes in circu- 

 ition and so small an amount of gold in the country. 

 The volume of currency must be reduced or that of 



