766 



RESUMPTION OF SPECIE PAYMENTS. 



000 (gold value) in silver bullion for coinage, and 

 which would give silver coins of the nominal value of 

 $45.000 t OOO. 



Notwithstanding the expense incurred, and the care 

 which has been exercised by the Government, to reno- 

 vate and keep the fractional currency in good condi- 

 tion, it is well known that a large percentage of the 

 notes in circulation, particularly m localities not con- 

 venient to banks, are deteriorated to an extent ren- 

 dering them quite unfit for use. It has also been coun- 

 terfeited to a much greater extent than coin, and the 

 detection of the spurious notes is infinitely more dif- 

 ficult than of counterfeit coins. The loss to the public 

 from this source must ultimately be very consid- 

 erable. The "wastage," as the small percentage of 

 these notes worn out or destroyed while in circulation 

 may be properly termed, falls mostly upon a class of 

 people the least able to bear it. It is no satisfaction 

 to a man who suffers the loss of a tenth of his day's 

 wages by receiving a 25-cent note which no one will 

 accept from him in payment, to be told that it reduces 

 to that extent the expenses of the issue of such money 

 by the Government of the United States. 



The expense of manufacturing the subsidiary silver 

 corns is estimated by the mint officers at from 14 to 

 2 per cent., the rate being less when the mints are 

 worked to their maximum capacity. The total expense 

 attending the manufacture of the coinage of the last 

 fiscal year ($43,854,708) was $889,370, or about 50 per 

 cent, of the expense of maintaining the fractional cur- 

 rency_. In this estimate the seigniorage realized on 

 the silver and minor coinage ($436,105.81) has not 

 been considered as reducing the cost of coinage, the 

 same being regarded as a gain to the Government, 

 and not an earning by the mints. 



The rule of the principal countries is to redeem in 

 kind the subsidiary silver coins when worn to an ex- 

 tent rendering the inscriptions illegible. A long pe- 

 riod, probably fifty years, would elapse before any 

 considerable portion of a new issue of silver coins 

 would diminish in weight by abrasion to an extent 

 sufficient to require their withdrawal. The advantage 

 in this respect of silver coins over paper fractional 

 currency is so great as not to admit or comparison. 

 Moreover, their bullion-value, when presented for 

 exchange for new pieces, would of course be the same, 

 or nearly so, as when issued, less the loss by wear. 

 The seigniorage or gain to the Treasury on the sub- 

 sidiary silver coins will be from 10 to 12 per cent., 

 and more than sufficient to defray the necessary ex- 

 penses of coining, distribution, and maintenance in 

 good condition. 



The purchase of bullion and the manufacture 

 of subsidiary coins were commenced as soon as 

 practicable, and were continued until Februa- 

 ry 28, 1878, at which time there had been pur- 

 chased 31,603,905-87 fine ounces of silver bul- 

 lion, for which there had been paid the sum 

 of $37,571,148.04 in gold coin an average of 

 118'881 cents per ounce. There were coined of 

 these fractional coins $42,974,931. Had the 

 entire amount of fine silver purchased been 

 coined, there would have resulted therefrom 

 $43,689,519. Although the resumption act 

 appeared to give ample authority for the manu- 

 facture and issue of these coins in redemption 

 of the fractional notes, the Treasury hesitated 

 about using the power, the value of the notes 

 and the coins to be issued being so nearly equal 

 as to create apprehensions that the latter might 

 be exported, and leave the country without 

 fractional money of any kind ; but Congress, 

 by the act of April 17, 1876, directed the Sec- 

 retary of the Treasury to issue the coins, and 

 on the following day a circular was published 



in accordance therewith. Silver, however, con- 

 tinued to depreciate, while the notes contin- 

 ued to appreciate, and consequently none of 

 the apprehensions were realized. The notes 

 were rapidly presented for redemption, com- 

 pelling the Government to run its mints over 

 business hours, and to use every exertion to 

 supply the demand for the new coins. 



There still remaining an apparent scarcity 

 of fractional coin, Congress, by a joint resolu- 

 tion approved July 22, 1876, authorized the 

 Secretary of the Treasury to issue subsidiary 

 coin to an amount not exceeding ten million 

 dollars, in exchange for an equal amount of 

 legal-tender notes, such notes to be kept apart 

 as a special fund, and to be reissued only upon 

 the retirement and destruction of a like sum 

 of fractional currency received at the Trea- 

 sury in payment of dues to the United States, 

 the fractional currency so destroyed to be 

 counted as part of the sinking fund. The 

 amount of fractional notes retired under this 

 act up to January 1, 1880, was $25,834,429.- 

 37, and the amount still outstanding on that 

 day was $15,674,303.78. The balance of the 

 note-reserve fund for the redemption of frac- 

 tional currency was, however, by the act ap- 

 proved June 21, 1879, directed to be reissued 

 in payment of arrears of pensions, leaving the 

 future redemptions of such fractional notes to 

 be made from the current funds in the Trea- 

 sury. To reimburse the Treasury for the de- 

 pletion in its cash consequent upon the re- 

 demption of these notes, there was issued of 

 five per cent, bonds of the description author- 

 ized by the refunding acts (funded loan of 

 1881) $17,494,150, and the surplus revenues of 

 the Government supplied the balance. 



Soon after the issue of these silver coins 

 commenced, it became apparent that old is- 

 sues of a like character were returning to 

 the country and coming into circulation. The 

 amount of coins thus returning continued to 

 increase, and, as there was no authority for 

 their redemption or exchange by the Govern- 

 ment, the volume of subsidiary coins became 

 so large as to cause inconvenience to the gen- 

 eral business of the country. To correct this 

 evil, Congress, by an act approved June 9, 

 1879, provided for the exchange of subsidiary 

 coins for lawful money of the United States at 

 all Sub-Treasury offices; and under the opera- 

 tions of this act these coins came in so rapidly 

 that on January 1, 1880, the Government held 

 of them $18,881,629.15. 



Under the clause of the resumption act of 

 January 14, 1875, authorizing the redemption 

 of legal-tender notes in the amount of 80 per 

 cent, of national-bank notes thereafter issued, 

 the Treasury began to redeem notes in March, 

 1875, and continued to do so until May 31, 

 1878, on which date an act was approved for- 

 bidding their further redemption. There was 

 thus redeemed of these notes an amount of 

 $35,318,984, leaving outstanding to be re- 

 deemed in coin under other provisions of the 



