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

ment of one kind of currency, as it would speedily be followed by the issue of another. The return of their bonds would enable them to provide coin reserves, far exceeding in amount any that would be required in their operations. The bonds held as security for their notes, equalled, according to the last annual report of the Comptroller of the Currency, the sum of $337,170,400. There were held by them, in addition, at the same time, securities of the United States to the amount of $47,840,150; the total amount equalling nearly $400,000,000. The coin value of their securities largely exceeded that

sum.

Assuming the Banks to resume with total liabilities of $800,000,000, and that they should hold at the time, in coin, a sum equalling 25 per cent of this amount, one-half their government securities would provide all the reserves required. Why should they not be allowed to become possessed of their capital as fast as it can be reclaimed, even if they remain national institutions? As it is, not a dollar of the whole $400,000,000, or at least of that portion of it held for their circulation, is available as banking capital! The Banks cannot resume, for the reason that that which is to enable them to do so is out of their possession, and must always be so, so long as they issue notes. As long as they are deprived of it, they must remain at a dead lock, so far as resumption is concerned. But if the present system be abolished, what, it is inquired, is to become of the people, the poor, ignorant, and innocent note-holders? What has become of them for the past fifteen years, and what has been the result of the paternal action of government during the whole of this period? During the whole of it, their measure of value and instrument of exchange has fluctuated all the way from thirty-five to ninetyfive per cent of its par value; in consequence of which, all ideas of relation of cost to value have been well nigh lost, and all the operations of society brought, as it were, to a dead stand. Would the people, could they have had their own way, have for fifteen long years put up with the currency which has been imposed upon them? With Banks alone to furnish it, it is impossible that an inconvertible currency should long remain in circulation. Strong Banks will always be speedily compelled to resume; weak ones, to go out of existence. Government officials are certainly, of all parties, the last to be

intrusted with the direction of the business operations of the country. Who, but these, brought her into her present dilemma? The beauty and excellence of Mr. Chase's measures have been their theme from their adoption to the present time. They successively repeat the same story, parrot-like, from year to year. Their iterations, however absurd they may be, tend to confirm the general delusion. Would the people, left to themselves, make use of weights or measures to be selected by lot or chance; no two of which, though nominally the same, were alike; and which could not fail to involve in loss, often excessive, one, and perhaps both parties to their use? And yet this is precisely the condition of the country in reference to her paper money. She cannot get out of her dilemma, as her hands are fast tied. Why not, for the future, let the noteholders take care of themselves? Has not experience shown that they are as competent to do this as the government? They would not be compelled to receive the notes of a single Bank. They could always demand to be paid in coin at the rate of bank-notes. They would always demand to be paid in it, were there any cause for distrust. They should always be encouraged to exercise a distrust of bank-notes, precisely as the managers of Banks should be encouraged to exercise it in reference to bills offered for discount. Neither notes nor bills should be accepted until a case had been made out in their favor. Mutual distrust, or caution rather, is the essential condition of all sound banking, as of all the business operations of society. If note-holders understand that they have no protection but the capital of Banks and their competent management, there will be very few unsound ones. Why does not government interfere in all the transactions of society? Why does it not say to a builder of ships, that he shall not begin the construction of one till he has deposited in the Treasury a sum equalling the value of the ship he is to build, as a guarantee that he will discharge all obligations contracted in its construction? How many ships would be built under such provisions as these? Would not the parties who were to deal with the builder protest against them, for the reason that they would destroy his power of purchasing their materials or labor? And would they not demand that he should be left with his means, for their advantage as well as his own? Would any one purchase a bill of exchange, were he told that