FINANCES OF THE UNITED STATES. 



permanent circulation, leaving to national banks the 

 proper business of such corporations, of providing 

 currency for the varying changes, the ebb and flow 

 of trade. 



The legal-tender quality given to United States 

 notes was intended to maintain them in forced circu- 

 lation, at a time when their depreciation was inevi- 

 table. When they are redeemable in coin this qual- 

 ity may either be withdrawn or retained, without 

 affecting their use as currency in ordinary times. 

 But all experience has shown that there are periods 

 when, under any system of paper money, however 

 carefully guarded, it is impracticable to maintain act- 

 ual coin redemption. Usually contracts will be based 

 upon current paper money, and it is just that, during 

 a sudden panic, or an unreasonable demand for coin, 

 the creditor should not be allowed to demand pay- 

 ment in other than the currency upon which the debt 

 was contracted. To meet this contingency, it would 

 seem to be right to maintain the legal-tender quality 

 of the United States notes. If they are not at par 

 with coin it is the fault of the Government and not 

 of the debtor, or, rather, it is the result of unfore- 

 seen stringency not contemplated by the contracting 

 parties. 



In establishing a system of paper money designed 

 to be permanent, it must be remembered that here- 

 tofore no expedient has been devised, either in this 

 or other countries, that in times of panic or adverse 

 trade has prevented the drain and exhaustion of 

 coin reserves, however large or carefully guarded. 

 Every such system must provide for a suspension of 

 specie payment. Laws may forbid or ignore such a 

 contingency, but it will come ; and when it comes it 

 cannot be resisted, but should be acknowledged and 

 declared, to prevent unnecessary sacrifice and ruin. 

 In our free Government the power to make this 

 declaration will not be willingly intrusted to indi- 

 viduals, but should be determined by events and 

 conditions known to all. It is far better to fix the 

 maximum of legal-tender notes at $800,000,000. sup- 

 ported by a minimum reserve of $100,000,000 of coin, 

 only to be used for the redemption of notes not to 

 be reissued until the reserve is restored. A demand 

 for coin to exhaust such a reserve may not occur, 

 but, if events force it, its existence would be known 

 and could be declared, and would justify a temporary 

 suspension of specie payments. Some such expedi- 

 ent could no doubt be provided by Congress for an 

 exceptional emergency. In other times the general 

 confidence in these notes would maintain them at 

 par in coin, and justify their use as reserves of banks 

 and for the redemption of bank-notes. 



The subject of the restoration of the silver 

 dollar as a lepal tender for the payment of 

 debts was extensively discussed during the 

 year. For the details of this discussion, see 

 CUBRKNCT. In Congress, at the extra session 

 of October and November, the following bill 

 was introduced by Mr. Bland, of "Missouri, and 

 passed in the House by a vote of 163 to 34: 



SEC. 1. There shall be coined, at the several mints 

 of the United States, silver dollars of the weight of 

 412i grains, troy, of standard silver, as provided 

 in the act of January 18, 1837. on which there shall 

 be the devices and superscriptions provided by said 

 act, which coins, together with all silver dollars 

 heretofore coined by the United States of like weight 

 and fineness, shall be legal tender at their nominal 

 value for all debts and dues, public and private, ex- 

 cept where otherwise provided by contract ; and any 

 owner of silver bullion may deposit the same at any 

 United States coinage mint or assay office, to be 

 coined into such dollars for his benefit, upon the 

 same terms and conditions as gold bullion is depos- 

 ited for coindffe under the existing laws. 



SKO. 2. All acts and parts of acts inconsistent with 

 the provisions of this act are hereby repealed. 



This bill not only restores the coinage of the 

 silver dollar, which was discontinued under 

 the law of 1873, but also makes it a legal ten- 

 der, in any sum, for all debts where there has 

 been no special contract. The value of this 

 dollar, as compared with greenbacks and gold, 

 was about 90 to 92 cents. In the Senate, all 

 propositions to limit the legal-tender feature 

 were voted down, although the amount of 

 coinage monthly was fixed at two to four 

 million dollars. The bill was not finally acted 

 upon during the year. 



The following bill, to repeal the act requir- 

 ing the resumption of specie payments, was 

 passed by the House on November 28d, by a 

 vote of 133 to 120 : 



A bill to repeal all that part of the act approved January 14, 

 1875, kuown as the Resumption Act, which authorized the 

 Secretary of the Treasury to dispose of United States 

 bonds, and redeem and cancel the greenback currency. 

 That all that portion of the act approved January 

 14, 1875, entitled "An act to provide for the resump- 

 tion of specie payments," which reads as follows, to 

 wit : " And whenever and so often as circulating 

 notes shall be issued to any such banking associa- 

 tion, so increasing its capital or circulating notes, or 

 so newly organized as aforesaid, it shall be the duty 

 of the Secretary of the Treasury to redeem the legal- 

 tender United States notes in excess only of the 

 $300,000,000 to the amount of 80 per centum of the 

 sum of national-bank notes so issued to any such 

 banking association as aforesaid, and to continue 

 such redemption as such circulating notes are issued 

 until there shall be outstanding the sum of $800,- 

 000,000 of such legal-tender United States notes, and 

 no more. And on and after the first day of January, 

 Anno Domini 1879, the Secretary of the Treasury 

 shall redeem in coin the United States legal-tender 

 notes then outstanding, on their presentation for 

 redemption at the office of the Assistant Trensurer 

 of the United States, in the city of New York, in 

 sums of not less than $50 ; and to enable the Secre- 

 tary of the Treasury to prepare and provide for the 

 redemption in this act authorized or required, he is 

 authorized to use any surplus revenues, from time to 

 time, in the Treasury not otherwise appropriated, and 

 to issue, sell, and dispose of, at not less than par, in 

 coin, either of the descriptions of bonds of the 

 United States described in the act of Congress, ap- 

 proved July 14, 1870, entitled ' An act to authorize 

 the refunding of the national debt,' with like qual- 

 ities, privileges, and exemptions to the extent neces- 

 sary to carry this act into full extent, and to use the 

 proceeds thereof for the purposes aforesaid, be and 

 the same is hereby repealed." 



An analysis of the vote shows the following 

 local division : 



Total 188 180 



