663 



PUBLIC DOCUMENTS. 



fully as I should like to do if space would permit, 

 but will confine myself to a few suggestions which 

 I look upon as vital to the best interests of the whole 

 people coming within the purview of "Treasury" 

 I mean specie resumption. Too much stress can- 

 not be laid upon this question, and I hope Congress 

 may be induced, at the earliest day practicable, to 

 insure the consummation of the act of the last Con- 

 gress, at its last session, to bring about specie re- 

 sumption " on and after the 1st of January, 1879," 

 at farthest. It would be a great blessing if this 

 could be consummated even at an earlier day. 



Nothing seems to me more certain than that a full, 

 healthy, and permanent reaction cannot take place 

 in favor of the industries and financial welfare of the 

 country until we return to a measure of values rec- 

 ognized throughout the civilized world. While we 

 use a currency not equivalent to this standard, the 

 world's recognized standard, specie, becomes a com- 

 modity like the products of the soil, the surplus seek- 

 ing a market wherever there is a demand for it. 



Under our present system we should want none, 

 nor would we have any, were it not that customs 

 dues must be paid in coin, and because of the pledge 

 to pay interest on the public debt in coin.. The 

 yield of precious metals would flow out for the pur- 

 chase of foreign productions and leave the United 

 States "hewers of wood and drawers of water " be- 

 cause of wiser legislation on the subject of finance 

 by the nations with whom we have dealings. I am 

 not prepared to say that I can suggest the best legis- 

 lation to secure the end most heartily recommended. 

 It will be a source of great gratification to me to be 

 able to approve any measure of Congress looking 

 effectively toward securing " resumption." 



Unlimited inflation would probably bring about 

 specie payments more speedily than any legislation 

 looking to the redemption of tha legal tenders in 

 coin. But it would be at the expense of honor. 

 The legal tenders would have no value beyond set- 

 tling present liabilities, or, properly speaking, re- 

 pudiating them. They would buy nothing after 

 debts were all settled. 



There are a few measures which seem to me im- 

 portant in this connection, and which I commend to 

 your earnest consideration : 



A repeal of so much of the legal-tender act as 

 makes these notes receivable for debts contracted 

 after a date to be fixed in the act itself, say not later 

 than January 1, 1877. We should then have quota- 

 tions at real values, not fictitious ones. Gold would 

 no longer be at a premium, but currency at a dis- 

 count. A healthy reaction would set in at once, and 

 with it a desire to make the currency equal to what 

 it purports to be. The merchants, manufacturers, 

 and tradesmen of every calling could do business on 

 a fair margin of profit, the money to be received 

 having an unvarying value. Laborers and all class- 

 es^who work for stipulated pay or salary would re- 

 ceive more for their income, because extra profits 

 would no longer be charged by the capitalist to com- 

 pensate for the risk of a downward fluctuation in 

 the value of the currency. 



Second, that the Secretary of the Treasury be au- 

 thorized to redeem, say not to exceed $2 000,000 

 monthly of legal-tender notes, by issuing in their 

 stead a long bond, bearing interest at the rate of 

 3.65 per cent, per annum, of denominations ranging 

 from fifty dollars up to $1,000 each. This would in 

 time reduce the legal-tender notes to a volume that 

 could be kept afloat without demanding redemption 

 in large sums suddenly. 



Third, that additional power be given to the Sec- 

 retary of the Treasury to accumulate gold for final 

 redemption, either by increasing revenue, curtailing 

 expenses, or both it is preferable to do both ; and 

 I recommend that reduction of expenditures be 

 made wherever it can be done without impairing 

 government obligations or crippling the due execu- 

 tion thereof. One measure for increasing the reve- 



nue and the only one I think of is the restoration 

 of the duty on tea and coffee. These duties would 

 add probably $18,000,000 to the present amount re- 

 ceived from imports, and would in no way increase 

 the prices paid for those articles by the consumers. 



These articles are the products of countries col- 

 lecting revenue from exports, and as we, the largest 

 consumers, reduce the duties, they proportionately 

 increase them. With this addition to the revenue, 

 many duties now collected, and which give but an 

 insignificant return for the cost of collection, might 

 be remitted, and to the direct advantage of con- 

 sumers at home. 



I would mention those articles which enter into 

 manufactures of all sorts. All duty paid upon such 

 articles goes directly to the cost of the article when 

 manufactured here, and must be paid for by the 

 consumers. These duties not only come from the 

 consumers at home, but act as a protection to for- 

 eign manufacturers of the same completed articles 

 in our own and distant markets. 



I will suggest, or mention, another subject bear- 

 ing upon the problem of " how to enable the Secre- 

 tary of the Treasury to accumulate balances." It is 

 to devise some better method of verifying claims 

 against the Government than at present exists through 

 the Court of Claims, especially those claims growing 

 out of the late war. Nothing is more certain than 

 that a very large percentage of the amounts passed 

 and paid are either wholly fraudulent or are far in 

 excess of the real losses sustained. The large amount 

 of losses proved on good testimony according to 

 existing laws, by affidavits of fictitious or unscrupu- 

 lous persons to have been sustained on small farms 

 and plantations is not only far beyond the possible 

 yiela of those places for any one year, butj as every 

 one knows who has had experience in tilling the 

 soil, and who has visited the scenes of these spolia- 

 tions, is in many instances more than the individ- 

 ual claimants were ever worth, including their per- 

 sonal and real estate. 



The report of the Attorney-General, which will be 

 submitted to Congress at an early day, will contain 

 a detailed history of awards made, and of claims 

 pending of the class here referred to. 



The report of the Secretary of War, accompanying 

 this message, gives a detailed account of army oper- 

 ations for the year just past, expenses for main- 

 tenance, etc., with recommendations for legislation 

 to which I respectfully invite your attention. To 

 some of these I invite special attention: 



1. The necessity of making $300,000 of the appro- 

 priation for the Subsistence Department available 

 before the beginning of the next fiscal year. With- 

 out this provision troops at points distant from sup- 

 ply production must either go without food or exist- 

 ing laws must be violated. It is not attended with 

 cost to the Treasury. 



2. His recommendation for the enactment of a 

 system of annuities for the families of deceased 

 officers by voluntary deductions from the monthly 

 pay of officers. This again is not attended with 

 burden upon the Treasury, and would for the future 

 relieve much distress which every old army officer 

 has witnessed in the past of officers dying sudden- 

 ly or being killed, leaving families without even 

 the means of reaching their friends, if fortunate 

 enough to have friends to aid them. 



3. The repeal of the law abolishing mileage, and 

 a return to the old system. 



4. The trial with torpedoes under the Corps of 

 Engineers, and appropriation for the same. Should 

 war ever occur between the United States and any 

 maritime power, torpedoes will be among, if not the 

 most effective and cheapest auxiliary for the defense 

 of harbors, and also in aggressive opperations, that 

 we can have. Hence it is advisable to learn by ex- 

 periment their best construction and application as 

 well as effect. 



5. A permanent organization for the Signal-Ser- 



