200 



CONGRESS, UNITED STATES. 



"An act to strengthen the public credit of the United 

 States. 



" Be it enacted, etc., That in order to remove any 

 doubt as to the purpose of the Government to dis- 

 charge all its obligations to the public creditors, and 

 to settle conflicting questions and interpretations of 

 the law, by virtue of which such obligations have 

 been contracted, it is hereby provided and declared 

 that the faith of the United States is solemnly 

 pledged to the payment in coin, or its equivalent, of 

 all the obligations of the United States, and of all 

 the interest-bearing obligations, except in cases 

 where the law authorizing the issue of any such obli- 

 gations has expressly provided that the same may be 

 paid in lawful money, or in other currency than gold 

 and silver, but none of the said interest-bearing ob- 

 ligations not already due shall be redeemed or paid 

 before maturity, unless at such times as the United 

 States notes shall be convertible into coin at the op- 

 tion of the holder, or unless at sudi time bonds of tne 

 United States bearing a lower rate of interest than 

 the bonds to be redeemed can be sold at par in coin. 

 And the United States also solemnly pledges its faith 

 to make provision at the earliest practicable period 

 for the redemption of the United States notes in 

 coin." 



This act still remains as a continuing pledge of the 

 faith of the United States " to make provision at the 

 earliest practicable moment for the redemption of 

 the United States notes in coin." 



A declaration contained in the act of June 30, 18fi4, 

 created an obligation that the total amount of United 

 States notes issued, or to be issued, should never ex- 

 ceed $400.000,000. The amount in actual circulation 

 was actually reduced to $356,000,000, at which point 

 Congress passed the act of February 4, 1868, sus- 

 pending the further reduction of the currency. The 

 forty-four millions have ever been regarded as a 

 reserve, to be used, only in case of emergency, such 

 as has occurred on several occasions, and must occur 

 when, from any cause, revenues suddenly fall below 

 expenditures ; and such a reserve is necessary, be- 

 cause the fractional currency, amounting to fifty mill- 

 ions, is redeemable in legal tender on call. 



It may be said that such a return of fractional cur- 

 rency for redemption is impossible. But let steps 

 be taken for a return to a specie basis, and it will be 

 found that silver will take the place of fractional cur- 

 rency as rapidly as it can be supplied, when the pre- 

 mium on gold reaches a sufficiently low point. With 

 the amount of United States notes to be issued per- 

 manently fixed within proper limits, and the Treas- 

 ury so strengthened as to be able to redeem them in 

 coin on demand, it will then be safe to inaugurate a 

 system of free banking with such provisions as to 

 make compulsory redemption of the circulating notes 

 of the banks in coin, or in United States notes, them- 

 selves redeemable and made equivalent to coin. 



As a measure preparatory to free banking, or for 

 placing the Government in a condition to redeem its 

 notes in coin " at the earliest practicable moment," 

 the revenues of the country should be increased so as 

 to pay current expenses, provide for the sinking fund 

 required by law, and also a surplus to be retained in 

 the Treasury in gold. 



I am not a believer in any artificial method of 

 making paper-money equal to coin when the coin is 

 not owned or held ready to redeem the promises to 

 pay ; for paper-money is nothing more than prom- 

 ises to pay, and is valuable exactly in proportion to 

 the amount of coin that it can be converted into. 

 While coin is not used as a circulating medium, or 

 tae currency of the country is not convertible into it 

 at par, it becomes an article of commerce as much as 

 any other product. The surplus will seek a foreign 

 market as -will any other surplus. The balance" of 

 trade has nothing to do with the question. Duties 

 on imports being required in coin, creates a limited 

 demand for gold. About enough to satisfy that de- 

 mand remains in the country. To increase this sup- 



ply I see no way open but by the Government hoard- 

 ing through the means above given, and possibly by 

 requiring the national bunks to aid. 



It is claimed by the advocates of the measure here- 

 with returned that there is an unequal distribution 

 of the banking capital of the country. I was dis- 

 posed to give great weight to this view of the ques- 

 tion at first ; but, on reflection, it will be remembered 

 that there still remains $4,000,000 of authorized 

 bank-note circulation assigned to States having less 

 than their quota not yet taken. In addition to this, 

 the States having less than their quota of bank circu- 

 lation have the option of twenty-five millions more 

 to be taken from those States having more than their 

 proportion. When this is all taken up, or when 

 specie payments are fully restored, or are in rapid 

 process of restoration, will be the time to consider 

 the question of " more currency." 



U. S. GKANT. 



EXECUTIVE MANSION, WASHINGTON, April 22, 1874. 



On April 28th the message was considered in 

 the Senate. 



The President pro tempore : " The bill (S. 

 No. 617) to fix the amount of United States 

 notes and the circulation of national banks, and 

 for other purposes, is now before the Senate ; 

 and the question is, Shall the bill pass, not- 

 withstanding the objections of the President of 

 the United States ? upon which question the 

 Constitution requires that the yeas and nays 

 shall be taken. Senators in favor of passing 

 the bill, notwithstanding the objections of the 

 President of the United States, will, as their 

 names are called, answer 4 yea,' those opposed 

 ' nay,' and the Secretary will call the roll." 



The question being taken by yeas and nays 

 resulted yeas 34, nays 30 ; as follows : 



YEAS Messrs. Allison, Bogy, Boreman, Cameron, 

 Carpenter, Clayton, Conover, Dennis. Dorsey, Ferry 

 of Michigan, Goldthwaite, Gordon, Harvey, Hitch'- 

 cock, Ingalls, Johnston, Lewis, Logan, McCreery, 

 Merrirnon, Mitchell, Norwood, Oglesby, Patterson, 

 Pease, Pratt, Eamsey, Eobertson. Spencer, Sprague, 

 Tiptou, West, Windom, and Wright 84. 



NATS Messrs. Anthony, Bayard, Boutwell, Buck- 

 ingham, Chandler, Conkling, Cragin, Davis, Ed- 

 munds, Fenton, Ferry of Connecticut, Flanagan, 

 Freliughuysen, Gilbert, Hager, Hamilton of Mary- 

 land, Hamilton of Tex is, Hamlin, Howe. Jones, 

 Kelly, Morrill of Vermont, Sargent, Scott, Sherman, 

 Stevenson, Stewart, Stockton, Thurman, and Wad- 

 leigh 30. 



ABSENT Messrs. Alcovn.Brownlow, Cooper, Mor- 

 rill of Maine, Morton, Eansom, Saulsbury, and 

 Schurz 8. 



The President pro tempore: "Upon this 

 question the yeas are 34 and the nays are 30. 

 Two-thirds of the Senators present not having 

 voted in the affirmative, the Senate refuses to 

 pass this bill." 



An act was finally passed by Congress which 

 increased the legal-tender notes $26,000,000, 

 and abolished the reserve on bank-note circu- 

 lation. Other sections were expected to pro- 

 duce an equal amount of contraction. 



In the House, on December 18, 1873, Mr. 

 Butler, of Massachusetts, from the Committee 

 on the Judiciary, reported a bill to protect all 

 citizens in their civil and legal rights. The 

 bill provided that whoever, being a corporatior 



