suitable paper could be found for discount. Every person that was able to resume would open an account with it, and would conduct his operations in the currency issued by it; and this process, like all healthy and natural ones, would steadily gain strength till all unhealthy and unnatural ones were completely superseded.

But provision for resumption, and the creation of a currency by means of which the operations of the government, and in time those of the whole country, could be carried on, would be by no means the only or chief advantage resulting from a Bank of the United States. No matter the extent of its operations, the greater part of the currency is always to be furnished by other and local institutions. To render a currency furnished by such safe and adequate to the wants of the country, provision must be made for the constant redemption of their issues. The tendency of money of every kind is always to the centres of capital and trade. When, however, the notes and credits of Banks are issued in the discount of bills representing merchandise, they will as a rule remain in circulation till they have served for its distribution. Where issues are made on accommodation paper, these, having no proper constituent for their employment, tend immediately toward the commercial centres. The tendency of all the issues of the New England States was constantly toward Boston. With daily redemptions in that city, of all the Banks within the territory dependent upon it, there could be no considerable excess of issue by any Bank, as such excess had to be taken in almost as soon as it was made. By the system peculiar to that section of the country, and which has already been described, a currency uniform in quantity and value, or one reflecting the means and wants of the people, was secured. This system, which was purely voluntary, and which imposed upon all the members to it the duty of redeeming their notes at their own cost, at the point to which they constantly tended to flow, never obtained in any other part of the country, chiefly for the reason that no other section formed such a complete geographical and commercial unit. By means of the United States Bank and its branches, and by these alone, will a similar system, or rather series of systems with similar results, be formed for the whole country. A branch of this

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 mo tives, 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 im- ' proper 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