326 



FINANCES OF THE UNITED STATES. 



doing this are left largely to the ciscretion of the 

 Secretarv, but, from the nature of the duty imposed, 

 he must* restore coin and bullion, when withdrawn 

 in the process of redemption, either by the sale of 

 bonds or the use of the surplus revenue, or of the 

 notes redeemed from time to time. The power to 

 sell any of the bonds described in the refunding act 

 continues after as well as before resumption. Though 

 it may not be often used, it is essential to enable 

 this Department to meet emergencies. By its exer- 

 cise it is anticipated that the Treasury at any time 

 can readily obtain coin to reenforce the reserve al- 

 ready accumulated. United States notes must, how- 

 ever, be the chief means under existing law with 

 which the Department must restore coin and bullion 

 when withdrawn in process of redemption. The 

 notes, when redeemed, must necessarily accumulate 

 in the Treasury until their superior use and conveni- 

 ence for circulation enable the Department to ex- 

 change them at par for coin or bullion. The act of 

 May 31, 1878, already referred to, provides that when 

 United States notes are redeemed or received in the 

 Treasury under any law, from any source whatever, 

 and shall belong to the United States, they shall not 

 be retired, canceled, or destroyed, but shall be re- 

 issued and paid out again and kept in circulation. 

 The power to reissue United States notes was con- 

 ferred by section 3579, Revised Statutes, and was 

 not limited by the resumption act. As this, how- 

 ever, was questioned, Congress wisely removed the 

 doubt. Notes redeemed are like other notes re- 

 ceived into the Treasury. Payments of them can 

 be made only in consequence of appropriations made 

 by law, or for the purchase of bullion, or for the re- 

 funding of the public .debt. 



t The current receipts from the revenue are suffi- 

 cient to meet the current expenditures as well as the 

 accruing interest on the public debt. Authority is 

 conferred by the refunding act to redeem 6 per cent. 

 bonds as they become redeemable, by the proceeds 

 of the sale of bonds bearing a lower rate of interest. 

 The United States notes redeemed under the re- 

 sumption act are, therefore, the principal means 

 provided for the purchase of bullion or coin with 

 which to maintain resumption, but should only be 

 paid out when they can be used to replace an equ.-il 

 amount of coin withdrawn from the resumption 

 fund. They may, it is true, be used for current 

 purposes like other money, but when so used their 

 place is filled by money received from taxes or other 

 sources of revenue. Jn daily business, no distinction 

 need be made between moneys from whatever source 

 received, but they may properly be applied to any of 

 the purposes authorized by law. No doubt coin lia- 

 ilities, such as interest or principal of the public 

 debt, will be ordinarily paid and willingly received 

 in United States notes, but, when demanded, such 

 payments will be made in coin: and United States 

 lotes arid coin will be used in the purchase of bul- 

 ion. This method has already been adopted in Col- 



and North Carolina, and arrangements are 

 >ein<? perfected to purchase bullion in this way in all 



the mining regions of the United States. 

 -ty J act approved June 8, 1878, the Secretary 

 the 1 reasury is authorized to constitute any super- 

 A"! ; Cr ? f a mint or assayer of any assay office an 

 Assistant Treasurer of the United States to receive 



1 com or bull on on deposit. By the legislative 

 appropna ion b.ll, approved July 19, 1878, the Sec- 



% of the Treasury is authorized to issue coin 

 2??Si in P< 7 ment t0 de Ptors of bullion at 



Stall? Th mint8 a - n ^ a88a y offices of the Uni ^d 

 ho*e i provisions, intended to secure to the 



' 10n re 8e 



aar'lvh ' - 10n T re 8 P eed - y Payment, wil 

 .ar.ly bring into the mints and Treasury th 

 grent body of the nrno.imia m^foi Q ,: ___ i :_ ^ / TT . 



will 

 the 



advantage and convenience to the producers. De- 

 posits of coin in the Treasury will, no doubt, con- 

 tinue to be made after the 1st of January, as hereto- 

 fore. Both gold and silver coin, from its weight and 

 bulk, will naturally seek such a safe deposit, while 

 notes redeemable in coin, from their superior con- 

 venience, will be circulated instead. After resump- 

 tion the distinction between coin and United States 

 notes should be, as far as practicable, abandoned in 

 the current affairs of the Government ; and therefore 

 no coin certificates should be issued except where 

 expressly required by the provisions of law, as in the 

 case of silver certificates. The gold certificates hith- 

 erto issued, by virtue of the discretion conferred 

 upon the Secretary, will not be issued after the 1st 

 of January next. 



The conference of European powers invited 

 by the Federal Government, for the purpose of 

 fixing an international ratio of gold and silver 

 coin, was a failure. This has left each country 

 to adapt its laws to its own policy. As the 

 bimetallic standard is adopted in this country, 

 it only remains to equalize the value of the two 

 metals. By the act of Congress of April 2, 

 1792, the ratio was fixed at 1 of gold to 15 of 

 silver. By the act of June 28, 1834, the ratio 

 was changed to 1 of gold to 16 of silver. For 

 more than a century the market value of the 

 two metals had varied between these two ra- 

 tios, mainly resting at that fixed by the Latin 

 nations, of 1 to 15. But within a few years 

 a great change has occurred in the relative value 

 of the two metals. It would seem to be expe- 

 dient to recognize this controlling fact one that 

 no nation alone can change by a careful read- 

 justment of the legal ratio for coinage of 1 to 

 16, so as to conform to the relative market val- 

 ues of the two metals. The ratios heretofore 

 fixed were always made with that view, and, 

 when made, did conform as near as might be. 

 Now that the production and use of the two 

 metals have greatly changed in relative value, 

 a corresponding change must be made in the 

 coinage ratio. There is no peculiar force or 

 sanction in the present ratio that should cause 

 a hesitation to adopt another, when, in the mar- 

 kets of the world, it is proved that such ratio 

 is not now the true one. The addition of one 

 tenth or one eighth to the thickness of the silver 

 dollar would scarcely be perceived as an incon- 

 venience by the holder, but would inspire con- 

 fidence and add greatly to its circulation. As 

 prices are now based on United States notes at 

 par with gold, no disturbance of values would 

 result from the change. The Secretary recom- 

 mends that a limit be fixed to the aggregate 

 issue of silver dollars, and that when the amount 

 outstanding shall exceed $50,000,000 the coin- 

 age be discontinued. 



The monetary transactions of the Govern- 

 ment have been conducted without loss through 

 the offices of the Treasurer, 10 Assistant Trea- 

 surers, 1 depositor}^, and 119 national-bank de- 

 positories, exclusive of those designated to re- 

 ceive only loan subscriptions. Of the entire 

 receipts of the Government during the year, 

 there was deposited in national-bank deposito- 

 ries the amount of $99,781,053.48. Deposits 



