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Bank established at Chicago would, as a means of increasing its loanable capital and its business, receive in payment of its bills, and on deposit, the notes and credits of all solvent speciepaying Banks within the territory of which that city is the commercial centre. It would, however, require all such Banks, whose notes and credits it received, to make them "good," daily, at its own counter. It would be equally for the interest of all solvent Banks to make such an arrangement, as a means of securing for their notes and credits the widest circulation. A good reputation would do for them what it does for a merchant; and they would, as a rule, seek to deserve it. The managers of Banks, if they are not influenced by higher motives, are subject to much fewer temptations than merchants to deviate from their proper path. By means of a United States Bank and branches, the system of redemption which so long prevailed in the New England States would, as far as specie payments were resumed, be created for the whole country, and would be enforced by the most potent of all laws, that of selfinterest. If the notes of a Bank in Minnesota, for example, were "good" at the branch Bank in Chicago, they would be equally so in every other part of the country, less the rate of exchange between that city and the point at which they might be offered; or they might have a higher value than coin in certain sections from which remittances to that city were to be made. A branch at Louisville would, in the same way, receive the notes and credits of all the Banks in good standing within the territory dependent upon that city; imposing, however, the conditions described. Another system of redemption would thus be created for another and important section of the country. These systems would be repeated, so as to apply to every portion of it. Wherever a branch was established, the local Banks would be forced to come up to its standard; and as the notes and credits of the Bank and its branches, less in each case the rate of exchange, would be of uniform value throughout the country, the notes and credits of all the Banks in good standing within it would everywhere possess a similar value. A safe, homogeneous and convertible currency would thus be created by the operation, as it were, of natural laws. Its use, like that of bills of exchange, would necessarily involve occasional losses; but such losses are no argument against the use. The possibility of loss, in every

operation or investment, would teach the necessity of providing every safeguard against it. The great danger in the matter of currency is that such safeguards will not be provided. A notice by the Suffolk Bank, while that system was in operation, that the notes and credits of any Bank were "not good" at its counter, was always received by the public as a valuable warning. Experience proved that in almost every case it was not seasonably given; not from the fault of the Bank, but for the reason that every one redeeming at it would naturally make every sacrifice to prevent an exposure of its own affairs. There never was a charge made against the former that it ever acted in any case from improper motives, or unadvisedly. Never was there a well-founded charge made against either Bank of the United States that it treated any Bank otherwise than with the greatest forbearance and consideration. If it erred at all, it always erred on the side of too great leniency. Every Bank should be held to the strictest account. No injustice can be done it in compelling it to make all its issues the equivalent of coin. The public, who are the holders of the greater part of its notes and credits, have no means of determining their value. Hence the importance of a system which shall disclose, at the earliest moment, the weakness or improper conduct of every issuer of currency. No injustice can be done a Bank, should all its liabilities be demanded for immediate payment. It contracts to pay them all on demand. They will not be presented for immediate payment so long as its loans are properly made. No Bank will collect the notes and credits of another Bank, for the purpose of making a run upon it, and thereby injuring its credit, as it would be liable to create in this way distrust and disturbance which might weaken its own position, its own liabilities being always payable on demand. As it is for the interest of merchants to deal fairly with their customers and the public, as the best means of promoting their own welfare, so it is for the interest of Banks to treat each other in a similar manner. Their interest becomes the rule of their conduct; and this interest always coincides with duty.

It is needless to remark that the results predicated of an United States Bank to be created are precisely those which followed the establishment of the second Bank in 1816. The nation then was in a desperate condition in reference to its

currency, and was restored mainly through the instrumentality of the Bank, by methods which have been fully set forth in the extracts given from Mr. McDuffie's Report of 1832.

Adequate provision for the future having been made, so that government, and individuals as far as they are able, can conduct their operations upon a specie basis, the next question is the mode of getting rid of our present inconvertible currency. That having relation to the government notes can be easily disposed of. The only provision to be made for their retirement is to fund them at a low rate of interest. That done, the duty of government will be at an end. They are to be wholly and finally retired. The degree of rapidity of their retirement is to be left with their holders. With provision for funding them, the notes should be demonetized, except in the discharge of contracts entered into in them. In their retirement not a dollar of coin should be used. If the notes, as is so generally claimed, be good money, they will continue to circulate as money. If not, it will be for the interest of their holders to get rid of them as soon as possible. As they will have a great deal of work to do in discharging the contracts that are still outstanding, they will be funded only in an easy state of the money market, and when no embarrassment would be created thereby. It would be a great misfortune to have resumption proceed too rapidly at the outset. The retirement of the notes will create the least disturbance when their holders are left to act as their interest may dictate. The process will be a healthy, for the reason that it will be a natural one. Taken in connection with the provision of a Bank, it will be a most rapid one, for the reason that a new currency will constantly be provided to take the place of the old. The old will disappear so soon as the new can be created. Nothing could be more absurd than for government to attempt to pay off its notes in coin. This would involve the employment of a cumbersome and expensive machinery to effect that which could be accomplished far more easily without than with it. To pay off the notes in coin, government would be compelled to provide a sum equal to a million dollars in coin, weekly, for a period of more than seven years. No provision for a new currency having been made, it could proceed only a few weeks in this direction without creating the greatest alarm and embarrassment.

The plan proposed by government is as if an army should burn all its ships, and all the material necessary to build new ones, before attempting to cross a river that obstructs its way. It imagines, in fact, that it has no river to cross; that resumption is a mere ceremony, not a radical revolution in the monetary system of the country. Were the method it proposes practicable, the time required for its accomplishment would be a sufficient reason against its adoption. Instead of a little more than one year within which resumption is now to be had, ten years would not suffice; while the country would suffer more in the process of resumption in coin, than it has suffered from the first issue of the notes to the present time. The plan proposed is as unjust as it is impracticable. No one has paid coin, or their value in coin, for the notes. Why should the holders receive more than their value in coin? If they are paid in it, who are to be its fortunate receivers? Only a small amount can be paid off at any one time. The coin paid out would not go into circulation, for the reason that the notes remaining outstanding would still be at a discount. Whoever received the coin for them would immediately sell it, as do the Banks at the present time, in order to make the premium. The attempt to retire the notes by payment in coin would be worse than the labor of Sisyphus. If the government were to announce that it would immediately begin the payment of its notes in gold, at the rate of a million dollars in a week, and that it would continue such payments for three hundred and sixty weeks consecutively, that is, until the whole were taken in, they would fall to a discount far greater than that at present existing. Their value could then be pretty accurately estimated, and they would only command their value. If the whole were to be retired within an average period of three and a quarter years, they would probably fall to a discount of twenty-two, instead of six or seven per cent. The impression now prevails that they are to be retired by the first day of January, 1879. It is this idea that controls their present price. They can no more be retired by payment in coin, or brought to their par value by 1879, than the waters of Lake Superior can before that time be pumped into the ocean. The exact period of resumption can no more be foretold than can the state of the weather on the first day of January, 1879. Nothing but mischief can come from fixing a certain day upon

which the event is to take place, especially when every step now taken tends to postpone instead of to advance it. When every thing is done that can be done by way of preparation, the nation must quietly await the event.

Provision having been made for the creation, by a Bank, of a convertible currency, to serve as well in production and trade as in the operations of the government, and for the demonetization of the legal-tender notes, the next step to be taken is the repeal of the law imposing a tax upon the notes of State Banks. That step taken, such of the latter as were able would immediately begin the issue of convertible currency. There are now some six hundred of these institutions in existence in the country, having an aggregate capital of $80,000,000; loans and discounts to the amount of $178,000,000; and deposits to the amount of $158,000,000. Among these are some of the strongest Banks in the country. Their means, whatever they are, are in hand, not (like those of most of the National Banks) tied up in Washington They would be compelled to issue convertible notes, or none at all. The public will never take an inconvertible currency when they can get a convertible one; and this they could get in the notes and credits of the United States Bank. To issue a currency, the State Banks would have to provide reserves in coin, as it is assumed that the United States legal-tender notes have been demonetized. The tax on their notes being removed, great numbers of the National Banks would immediately reorganize themselves as local or State institutions. Such as had no considerable part of their means in governments could very speedily become the issuers of notes for circulation. They could, for the reasons stated, issue no other than convertible ones. Resumption by the National Banks which received their full quota of notes would necessarily be a much more gradual process, unless government should consent to return to any Bank its bonds, upon the deposit of a corresponding amount of National bank-notes which might not be its own. Government could compel the various Banks to redeem their notes so returned in its own notes, to be cancelled if advisable. As the Banks in receiving their securities would presently, as State institutions, become the issuers of money, no great or necessary stringency would result from the retire