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.

Such provisions would not only give the greater part of them the means of resumption, but very large amounts in addition. It is also assumed that the whole amount of circulation, including de posits outstanding upon resumption, will not exceed $800,000,000; requiring reserves of say $200,000,000, of which one half will be held by the United States Bank. As already remarked, the convertible currency of the Banks, as it comes into circulation, will for a considerable time be largely supplemented by the government notes, which, being still legal tender in the discharge of outstanding contracts, will go out of circulation only as such contracts are run off. The rapidity with which the notes are funded will depend largely upon that with which the new convertible money will come into circulation: the removal of all apprehension on the score of the lack of circulation will go far toward carrying the country in safety from one system to the other.

But to resume upon any thing like an adequate basis for the whole country, vastly more is required than what appears to be ample reserves for the Banks. There is the same reason why the public consumers of merchandise - should hold reserves in coin as that Banks should. The latter are little more than instruments arising out of production and distribution. Should their reserves prove inadequate, or be too largely drawn upon, as in case of a heavy export demand, they must strengthen themselves by drawing coin from the public, whose excessive expenditures have been the cause of the export. They may have no other mode of strengthening themselves, and at the same time of checking a prevailing extravagance, but by compelling the public to pay their bills in coin, which they can do by ceasing to make loans. As their issues, by means of which their bills were ordinarily paid, ceased, the latter would, in part at least, have to be paid in coin. Banks are never in a secure position, unless they have a large fund to draw upon other than that in their vaults. The public are never in a safe condition unless such fund exists, which is to make good, on their part, any deficit of products, the ordinary subjects of consumption. A perfect equilibrium between production and consumption is impossible. Balances will be constantly arising to be discharged in coin, for which Banks should not be called upon, or, if called upon, should be able to reimburse themselves from those against whom, from extravagance, or want of production, they were found. Το resume with safety, an amount of coin, chiefly gold, should be in the hands of the public equal to that in the hands of the Bank, or, say, $400,000,000 in all. With the means that will come into the

possession of the Banks, and with the products of our industries, the necessary amount of coin for resumption could be provided with all the dispatch consistent with our highest welfare: for it should be our aim to resume without causing any disturbance in those countries which are the great consumers of our products, which, and not our public securities, should supply the means. When Our people move, the danger will be that they will move with too great, instead of with too little emphasis. The haste should be in adopting a competent method. The moment it is entered upon, there will be no complaint that it is not sufficiently rapid. It is far better to take time, to proceed slowly and methodically; to rest occasionally on what is achieved, than to run the risk, by inconsiderate haste, of losing all.

Cambridge: Press of John Wilson & Son.