664 



PUBLIC DOCUMENTS. 



United States would be promoted by disparaging 

 silver as one of the two precious metals which fur- 

 nish the coinage of the world, and that legislation 

 which looks to maintaining the volume of intrinsic 

 money to as full a measure of both metals as their 

 relative commercial values will permit would be nei- 

 ther unjust nor inexpedient, I must ask your indul- 

 gence to a brief and definite statement of certain 

 essential features in any such legislative measure 

 which I feel it my duty to recommend. 



1 do not propose to enter the debate, represented 

 on both sides by such able disputants in Congress 

 and before the people and in the press, as to the ex- 

 tent to which the legislation of any one nation can 

 control this question, even within its own borders, 

 against the unwritten laws of trade or the positive 

 laws of other governments. The wisdom of Con- 

 gress in shaping any particular law that may be 

 presented for my approval may wholly supersede 

 the necessity of my entering into these consider- 

 ations, and I willingly avoid either vague or intricate 

 inquiries. It is only certain plain and practical traits 

 of such legislation that I desire to recommend to 

 your attention. 



In any legislation providing for a silver coinage, 

 regulating its value, and imparting to it the quality 

 of legal tender, it seems to me of great importance 

 that Congress should not lose sight of its action as 

 operating in a twofold capacity and in two distinct 

 directions. If the United States Government were 

 free from a public debt, its legislative dealing with 

 the question of silver coinage would be purely sov- 

 ereign and governmental, under no restraints but 

 those of constitutional power and the public good as 

 affected by the proposed legislation. But in the ac- 

 tual circumstances of the nation, with a vast public 

 debt distributed very widely among our own citizens, 

 and held in great amounts also abroad, the nature of 

 the silver-coinage measure, as affecting this relation 

 of the government to the holders of the public debt, 

 becomes an element, in any proposed legislation, 

 of the highest concern. The obligation of the pub- 

 lic faith transcends all questions of profit or public 

 advantage otherwise. Its unquestionable mainte- 

 nance is the dictate as well of the highest expediency 

 as of the most necessary duty, and will ever be care- 

 fully guarded by Congress and people alike. 



The public debt of the United States, to the 

 amount of $729,000,000, bears interest at the rate of 6 

 per cent., and $708,000,000 at the rate of 5 per cent.; 

 and the only way in which the country can be relieved 

 from the payment of these high rates of interest is by 

 advantageously refunding the indebtedness. Wheth- 

 er the debt is ultimately paid in gold or in silver 

 coin is of but little moment compared with the 

 possible reduction of interest one-third by refunding 

 it at such reduced rate. If the United States had 

 the unquestioned right to pay its bonds in silver 

 coin, the little benefit from that process would be 

 greatly overbalanced by the injurious effect of such 

 payment if made or proposed against the honest 

 convictions of the public creditors. 



All the bonds that have been issued since Feb- 

 ruary 12, 1873, when gold became the only unlimited 

 lejral-tender metallic currency of the country, are 

 justly payable in gold coin or in coin of equal value. 

 During the time of these issues, the only dollar that 

 could be or was received by the government in ex- 

 change for bonds was the gold dollar. To require 

 the public creditors to take in repayment any dollar 

 of less commercial value would be regarded by them 

 as a repudiation of the full obligation assumed. 

 The bonds issued prior to 1873 were issued at a time 

 when the gold dollar was the only coin in circulation 

 or contemplated by either the government or the 

 holders of the bonds as the coin in which they were 

 to be paid. It is far better to pay these bonds in 

 that com than to seem to take advantage of the un- 

 foreseen fall in silver bullion to pay in a new issue 

 of silver coin thus made BO much less valuable. 



The power of the United States to coin money and 

 to regulate the value thereof ought never to be exer- 

 cised for the purpose of enabling the government to 

 pay its obligations in a coin of less value than thai 

 contemplated by the parties when the bonds were 

 issued. Any attempt to pay the national indebted- 

 ness in a coinage of less commercial value than the 

 money of the world would involve a violation of the 

 public faith and work irreparable injury to the pub- 

 lic credit. 



It was the great merit of the act of March, 1869, 

 in strengthening the public credit, that it removea 

 all doubt as to the purpose of the United States to 

 pay their bonded debt in coin. That act was accept- 

 ed as a pledge of public faith. The government has 

 derived great benefit from it in the progress thus far 

 made in refunding the public debt at low rates of 

 interest. An adherence to the wise and just policy 

 of an exact observance of the public faith will en- 

 able the government rapidly to reduce the burden 

 of interest on the national debt to an amount 

 exceeding $20,000,000 per annum, and effect an 

 aggregate saving to the United States of more than 

 $300,000,000 before the bonds can be fully paid. 



I respectfully recommend to Congress that in any 

 legislation providing for a silver coinage, and impart- 

 ing to it the quality of legal tender, there be impressed 

 upon the measure a firm provision exempting the 

 public debt heretofore issued and now outstanding 

 from payment, either of principal or interest, in any 

 coinage of less commercial value than the present 

 gold coinage of the country. 



In adapting the new silver coinage to the ordinary 

 uses of currency in the every-day transactions of life, 

 and prescribing the quality of legal tender to be as- 

 eigned to it, a consideration of the first importance 

 should be BO to adjust the ratio between the silver 

 and the gold coinage, which now constitutes our 

 specie currency, as to accomplish the desired end 

 of maintaining the circulation of the two metallic 

 currencies, and keeping up the volume of the two 

 precious metals as one intrinsic money. It is a mixed 

 question for scientific reasoning and historical 

 experience to determine how far, and by what meth- 

 ods, a practical equilibrium can be maintained which 

 will keep both metals in circulation in their appro- 

 priate splieres of common use. 



An absolute equality of commercial value, free 

 from disturbing fluctuations, is hardly attainable, 

 and without it, an unlimited legal tender for private 

 transactions assigned to both metals would irresist- 

 ibly tend to drive out of circulation the dearer coin- 

 age, and disappoint the principal object proposed 

 by the legislation in view. I apprehend, tnerefore, 

 that the two conditions of a near approach to equality 

 of commercial value between the gold and silver 

 coinage of the same denomination and of a limita- 

 tion of the amounts for which the silver coinage is 

 to be a legal tender are essential to maintaining both 

 in circulation. If these conditions can be success- 

 fully observed, the issue from the mint of fiilver 

 dollars would afford material assistance to the com- 

 munity in the transition to redeemable paper-money, 

 and would facilitate the resumption of specie pay- 

 ment and its permanent establishment. 'Without 

 these conditions, I fear that only mischief and mis- 

 fortune would flow from a coirage of silver dollars 

 with the quality of unlimited legal tender, even in 

 private transactions. 



Any expectation of temporary ease from an issue 

 of silver coinage to pass as a legal tender, at a rate 

 materially above its commercial value, is, I am per- 

 suaded, a delusion. Nor can I think that there is 

 any substantial distinction between an original issue 

 of silver dollars at a nominal value materially above 

 their commercial value, and the restoration of the 

 silver dollar at a rate which once was, but has ceased 

 to be, its commercial value. Certainly, the issue of 

 our gold coinage, reduced in weight materially below 

 ite legal-tender value, would not be any the less a 



