METHOD OF RESUMPTION. AMOUNT OF SPECIE REQUIRED.

It has been assumed, in the preceding pages, that the United States notes, after provision of a Bank, and the return to the National Banks of their securities, are to be demonetized except in the discharge of contracts entered into in them; and are to be retired, not by payment in coin, but by funding. This mode of getting rid of them will relieve government of the necessity of providing a dollar of coin on their account, other than that necessary to meet the interest annually accruing on the funding bond.

Neither would the government have to provide a dollar of coin, other than that in its treasury, to place itself at once on a specie basis in all its future operations. It never can, or rather never will issue a convertible currency, for the reason that it never can, or never will make provision for its conversion - the necessary condition of all convertible currencies- previous to its issue. If it would conduct its operations on a specie basis, using paper money, it must use that which is the symbol of merchandise. The issue of such a currency is never one of its functions. It is to aid in its creation by depositing in the Bank to be established by it the coin of which it may be possessed; by making such Bank the depository of the public moneys, and by using its notes in the collection and disbursement of the revenues. Should the coin in its possession not prove adequate for the reserve of the Bank, the stockholders could readily supply what was wanting. By such means provision could at once be made for the issue of a convertible currency to the amount of $300,000,000, a portion of which should be got into circulation as the first step in the process of resumption. The government, as a necessary condition thereto, must unite its financial operations with those of the people. It must abolish the Independent Treasury, or so much of it as provides for the collection and disbursement of the revenues in coin. This institution was established as an act of hostility to the commercial classes; and to destroy, as far as possible, the paternal character of our government. If a Bank could be created to exist for twenty years, the necessary inference was that the government erecting it should at least exist twenty years, to give the proper efficacy to its act. If the government, as was the theory of those administering it, could be dissolved at any moment by the secession of any member of it, that is, of any one of the States, ―nothing could be more absurd than an act wholly opposed to such a

theory. It was to have no entanglements that could not be resolved at an hour's notice. If the necessity, or reason, that led to the creation of the Independent Treasury has ceased, the thing itself should cease. The British government, using nothing but paper in its operations, which far exceed in amount those of our own, is on a specie basis by means of Bank of England notes, in which all its revenues are collected and disbursed. Whatever coin it wants, it draws from the Bank. Our mode of collecting the revenues in coin is worthy only of such countries as Turkey or Morocco, in which no form of money but that of coin is trusted. If the people, by supplementing coin by symbols, make a saving equal to the interest on a corresponding sum, conducting their operations, at the same time, with vastly greater convenience and safety, then government would, by imitating their example, make a similar saving, with equally increased convenience and safety in its own.

It is assumed that the government is to retire its notes by funding. At what price or rate? At that, in each case if possible, at which all outstanding contracts were entered into. This is not possible. It must adopt one rate for all; and that must be the one at which the greatest number were entered into. Such a rate can be sufficiently approximated to do substantial justice, not in all cases, but in the aggregate. The creditor classes earnestly objected to the issue of the legal-tender notes, for the reason that they were compelled thereby to receive, in the payment of their debts, a less value than was contracted to be paid. Great numbers were paid in notes whose value did not equal one-half their nominal amounts. Their remonstrances were treated with contempt. They received no sympathy in their losses, as it was assumed they had a plenty left. It is equally a hardship for debtors to be compelled, by an advance in the value of the currency, to pay a greater value or sum than was contracted to be paid, as it was for creditors to be compelled to receive less. As the creditor must accept the notes, whatever their value, so a debtor, after they have driven coin out of circulation, can contract in no other currency. The value at which contracts are entered into is always assumed by both parties to be the value at which they are to be discharged. So accustomed have the race become to regard uniformity of value as a necessary attribute of money that it never occurs at the time, to parties to contracts, that they are to receive or pay any other than the present value of money, any more than it does that the scales or weights by which they buy are to differ from those by which they are to sell. Were the measures of extension or quantity liable to be different in

every transaction, it would not be long before society would be thoroughly demoralized, morally as well as materially. By the use of measures of value-United States notes - which fluctuate constantly, and often excessively, the people are in the same position that they would be were the former never two days alike. They are demoralized morally as well as materially. Recovery can only come from the substitution of the true for the false, of the measures of value established by Providence in place of those established by man.

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Relief, so far as it can be administered, must be general, not particular. If varying measures of extension were in use, and it were attempted to bring all outstanding transactions to one standard, the only equitable mode would be to ascertain the length, (the denomination being the same), of that by which the greater number of engagements were entered into, and adopt that as the standard for all. So with varying measures of value. That which is to be adopted for all must be the one at which the greater number of outstanding transactions were entered into. Great injustice will be done by any plan; but the lesser good must be sacrificed to the greater. The issue of the notes at the outset was an immeasurable crime, for which the appropriate penalty had to be paid, and has, in part, been paid the present year, in the terrible strikes upon our railroads, and in the frightful loss of life and property which they involved. These are warnings that the reformation of our currency is not to be postponed a moment longer. Not only is its reformation the prime condition of the material recovery of the country, but of the maintenance of domestic order; of the public faith in engagements other than the government notes; nay, of the existence of government itself. Fortunately, the period immediately preceding the present has been the longest in which the value of the legal-tender notes has, since their issue, continued very nearly uniform. Such value, consequently, is the one in which the greater number of outstanding contracts were intended to be paid. It must be adopted as the one at which all are to be paid. Commercial undertakings, which always make up a considerable portion of those outstanding, are entered into and run off, at least three times each year: these, consequently, are upon the present basis of value of the notes. If they can be carried out in the spirit in which they were entered into, resumption will be attended with comparatively little loss or disturbance.

The value of the currency at which contracts are to be discharged being determined, either by assuming its value as it stood

on the first day of July, 1877, or by taking the average for the year preceding, then provision is to be made for funding at such value; the equivalent being a bond having a long time to run, and bearing interest, in coin, at the rate of, say, 4 per cent. Such a mode of adjustment would be equitable, and satisfactory to creditors, as it would secure to them all to which they were entitled. It would wholly relieve government of the burden pressing upon it. It would be just and satisfactory to the indebted classes, as it would compel them to pay no more than they contracted to pay. It would silence the only objection to resumption which is well founded. While government or society may outrage the creditor classes with impunity, they cannot the debtor. The despoiling of the former excites little sympathy, for the reason that they are assumed to be above want: that of the poor may take away their very means of existence. However much may be taken from the rich, they still have enough left to render indispensable the maintenance of social order: its maintenance by those who have nothing to lose may become a matter of indifference. Hence, the complaints of the latter must be listened to, and their griev ances redressed, although a deaf ear may be turned with impunity to those, equally well founded, of the rich. The latter will be well content with the plan proposed, as the alternative might leave them wholly without remedy, so far as the debts due them are concerned. By the mode of adjustment indicated, the government would be liable to no charge of bad faith, for the reason that it is impossible to reduce its faith, depending upon its "pleasure," to any definite quantity or value. It may execute its "pleasure whenever it chooses: the holder of the notes must fix his own time at which it will be executed. If his estimate as to time be wrong, he has no one to blame but himself. It was expected, when the notes were issued, that the "pleasure" of the government would be speedily executed; the notes, consequently, bore a high price. Fifteen years have elapsed, and government is still awaiting the time. at which it may find itself able, or find it convenient, to pay them. No one charges it with bad faith; although, had it been known at the time of issue that fifteen years would elapse before they were paid, they would not have produced one quarter their nominal value. Government will not be properly chargeable with bad faith, if it does not pay them within fifteen years from the present time. It is this uncertainty as to the value of the notes, dependent upon the "pleasure of the government, that causes them to fluctuate so constantly in value. Should it declare its "pleasure" by

providing for their funding into bonds having one hundred years to run, bearing a certain rate of interest, then a value which was before wholly conjectural becomes ascertainable and measurably uniform. The notes would have the value of that into which they would be convertible, whatever that might be. At any rate, government would have done all in its power to give its notes, so long as they remained outstanding, the attribute of uniformity; and all, in fact, that it can undertake to do.

Were the government to undertake to discharge its notes in coin, it could not resume till they were wholly provided for. They would go out of circulation as fast as provision was made therefor. As only a comparatively small amount of the coin by which they were taken in would go into circulation, the country, by their retirement by payment in coin, would, for a time at least, be virtually without a currency. By provision for the retirement of the notes by funding, government would have in effect resumed at the same time that they, or the greater portion of them, would still be in circulation, by virtue of being money-legal-tender so far as all outstanding contracts were concerned. They would be money to a part of the community; and capital, for funding, to another. Those not in debt, and who preferred an interest to a non-interest bearing security, would fund. But funding would not go on long before the notes, as money, would produce to their holders a greater rate of interest, on loans of them, than that of the funding bonds. Funding would then cease, till money became easy by the running off of outstanding contracts; when it would again begin, to be again checked in the manner already stated. In this way, the notes would go out of circulation only very gradually, and as the new convertible currency came in to take the place of the old. The public would never be without a sufficient amount of currency in some form, wherewith to carry forward its operations; and would escape, as far as possible, those convulsions almost inseparable from all great changes in financial or monetary conditions.

It is assumed that the $100,000,000 of coin to constitute the reserves of an United States Bank could be readily provided, by means of which the government, and such of the public as were able, could place themselves immediately upon a specie basis. It is also assumed that the securities of the Banks composing the present safety-fund system are to be returned to them, for the purpose of providing the means for resumption; that they are to remain National or become State Banks, at their option; and that no other than the ordinary restrictions are to be imposed upon their issues.