5l 
 
 -b 
 
 t- 
 
 HG 
 527 
 
 T3 
 
 o 
 
SPEECHES 
 
 REMONETIZATION OF SILVER 
 
 RESUMPTION, 
 
 I)K M V K 1! Kl) 
 
 .A. LIP ZEE OUST SO 
 
 OHIO STATE CANVASS, 
 
 L877. 
 
 CINCINNATI : 
 - HOOK AND JOB PRINTING ESTA1U.I.SI 
 
 1877. 
 
SPEECH 
 
 OF THE 
 
 Hon. ALPHONSO TAFT 
 
 ON THE 
 
 REMONETIZATION OF SILVER, 
 
 AT 
 
 Sandusky, 0,, Thursday Evening, Sept, 13, '77. 
 
 FELLOW-CITIZENS If all laws prescribing the form and de- 
 nomination of coins, and giving to them the quality of legal 
 tender, were repealed, gold and silver would still be the practical 
 measures of value for the world, as they were before coinage 
 began, when "Abraham weighed to Ephron the silver," the price 
 paid for "the cave of Macphelah, " and as they are now in 
 China, where silver is the only currency, and passes by weight, 
 without regard to its formor coinage^y^Their indestructible and 
 lianCquafiHes, their convenient divisibility, their rareness for 
 other uses, and yet their sufficiency for a medium of exchange, 
 and the utter want of any other metal or material fitted for a 
 universal currency, have long since fixed their destiny, and 
 every attempt by legislation to prevent or defeat that destiny 
 has been a signal failure. Accumulated by the mining industry 
 of ages, they now exist as a reliable and constant measure of 
 the values of all other property in the world. Our ideas of 
 pecuniary values have originated in them their quantity, and 
 the cost of producing them. How poorly th 
 
 appreciates this^i^rtbaarsql blessing jvhich 
 fijsfied tp_ mankind ! The quantity of these metals that has been 
 made available^By the labor of man, in all past time, and which 
 now remains in use, amounts to not far from ten thousand mil- 
 lions of dollars, and is almost equally divided between gold and 
 silver. As coins they are durable. "Rust doth not corrupt 
 
2 REMONETIZATION OF SILVER. 
 
 them." They are convenient, and every coin is a medal. Coins 
 have brought to our time important historical facts from remote 
 antiquity, and still have been continually used as a true and con- 
 venient measure of values. If the quantity of these precious 
 metals, at the present time, instead of being ten thousand 
 millions of dollars, had been but five thousand millions, the prices 
 of all property would have been less. Not that the precious 
 metals are equal in value to the total of all other forms of value, 
 nor that the reduction of their entire amount would necessarily 
 reduce the prices of all property in the exact proportion of that 
 reduction, but that prices do very largely depend upon the 
 quantity of the precious metals, and their distribution through- 
 out the world. 
 
 Uhese metals have a use, for which they seem to have been 
 nely^set apart. They perform the certain function of 
 measuring all the values of exchangeable property. If they 
 were more plenty they would be cheaper, and prices would be 
 higher, and if they were^ less plenty they would be dearer, and 
 Their increase in the world has kept pace 
 
 ( with their consumption in the arts, their loss by friction, and the 
 increased demand by the growth of property interests incident 
 to the increase of the world's population and wealth. 
 
 I do not mean that, in the thousands of years during which 
 men have been at work in the mines, these metals have not 
 grown in quantity, as compared with other values, and the uses 
 to which they have been destined, and that, consequently, prices 
 have not grown ; but that growth has been so imperceptible as 
 to be detected only by the comparison of different centuries. 
 
 The supply of the precious metals, therefore, for each genera- 
 tion of people, is practically constant, and forms a just andper- 
 manent measure of value for all generations, and for all nations. 
 This is a matter of inestimable importance to the civilized world. 
 Prices have thus been formed in all time on this basis. Our 
 lands, our cattle and our merchandise are all measured by the 
 world's precious metals. These measures of value exist every- 
 where, and have always existed, and denote the values of all 
 kinds of property as truly as the weights upon one end of the 
 scale show us how heavy a body is that is balanced upon the 
 other. These ideas of value have been the growth of ages. 
 Although different natipnsJiaiEJnadejhese metals into different 
 
REMON1TIZATION OF SILVER. 3 
 
 coins, each putting upon them its peculiar stamp, still the ex- 
 changeable value_of_gach foreign coin is easily ascertained^and 
 practically \ the precious metals form one universal currency 
 measuring the valueslHroughout the civilized world. Whenever 
 any country or any part of a country attempts to do business on 
 some other currency of less value, prices rise, and we are con- 
 scious that these prices arc too high. ^We have a certain 
 instinctive sense of what prices ought to be, and that sense has 
 grown out of thjjjvelljgnown and uniform relation between the 
 precious metals and aU other values. So long as the nations ad- 
 here to this legitimate money, prices are maintained throughout 
 the world at nearly uniform rates, and exchanges of property 
 and international transactions are effected without material loss 
 or inconvenience. All or nearly all nations have originally 
 used what is properly denominated the double or optional 
 standard of value, regarding both metals as money at a ratio 
 between them which each country prescribes for itself. This 
 has been the general condition of the monetary world from the 
 beginning of history, and from before the beginning of civilza- 
 ion, to the present century. It prevailed in all the great empires 
 of antiquity, and has prevailed equally among Christian nations. 
 The ratio between the two metals has undergone some varia- 
 tions. The prevailing ratio in the Roman Empire was 13.33 to 
 I. But in some countries it has been greater or less than in 
 others, at the same time. The result has followed that each 
 metal has, for the time being, tended to the countries where it 
 was most highly valued, though it was lawful money everywhere. 
 In this state of things it was not very important whether both 
 gold and silver remained in every country, or whether one 
 country should have gold and another silver. The result was 
 the same, or nearly the same, as to the maintenance of uni- 
 formity in prices. Both metals were in full use as currency. If 
 one country accumulated too much of one metal, it would flow 
 off to where it could buy more property. The demonetization 
 of either of these metals that is, declaring by law that but one 
 shall be a legal tender in payment of debts has been of recent 
 origin, and has a very different effect, from the causing a metal 
 to leave the country by over valuing the other metal. In the 
 latter case the holder of the coin has an option to send his coin 
 to any country, and in using that option will select that where 
 
4 REMONETIZATION OF SILVER. 
 
 the ratio is most favorable, if there is a difference. But in the 
 case of demonetization, one metal is absolutely excluded as 
 lawful money. But even this process of demonetization by a 
 single nation of a metal would not have much effect to depre- 
 ciate it, so long as it is recognized as money, and wanted by all, 
 or a large majority of other nations. 
 
 Gold and silver have, therefore, held their own with a nearly 
 constant ratio, till the present century. 
 
 In this connection it is well to consider how fortunate it is, 
 that so much has been done in time past in producing the 
 precious metals, and that the stock has become so large in the 
 world that they do not fluctuate, and can not be cornered. If 
 the precious metals were all to be remanded to their original 
 condition, and we were now to begin again to extract them from 
 the earth and coin them into money, our currency would neces- 
 sarily be inadequate and inconstant. A large yield in a partic- 
 ular year, a bonanza in California, or in some other part of the 
 earth, would cause a great and inconvenient change in prices. 
 A loss by accident of a quantity of coin would have a like effect, 
 and it would be easy for stock jobbers and speculators to corner 
 the money market. But the quantity is now so vast, and so 
 well distributed over the earth, that the irregularities of pro- 
 duction or of consumption have no appreciable effect. They 
 are like the waters of the ocean, which are distributed over the 
 face of the globe, but which, if by chance, or by some tem- 
 porary cause, they are heaped up in one place, will soon seek 
 their proper level, and if depressed in any one place, will soon 
 fill that place, from the fluid mass above, always tending to a 
 general level. So it is and must be with the distribution and 
 use of coin as a legitimate currency. -We can^not afford to ciiL 
 s off from this universal medium of the 
 
 Jender paper money; and if we have done so, for some tempo- 
 rary reason, as was our case in the war, the sooner we regain~our 
 old ^nETaTiori rn rV|e nriancial world, without unnecessary shock to- 
 be forbotrTtheput^ 
 
 perity. On this subject the country has reason to expect from 
 the Republican party an honest and straightforward policy, ad- 
 vancing steadily and surely to specie payments, while the Dem- 
 cratic party and their platform afford to the country no such 
 assurance. 
 
REMONETIZATION OF SILVER. 
 
 REMONETIZATION. 
 
 Whether silver shall be re monetized, and on what terms, have 
 become questions of paramount importance to the country, in 
 view of the approaching resumption of specie payments. I am 
 decidedly iaJayorjof complete remonetization, and of the coin- 
 age of the silver dollar, containing as it has done since 1792, 
 37 l / g rams of pure_silver. This subject has been discussed by 
 many learned writers, philosophers, bankers, politicians and 
 orators of this and other countries. It is of national and of in- 
 ternational importance. It affects the convenience of exchanges 
 between different countries, and the relation between debtors 
 and creditors, whether individual or national. In reading an)H 
 author upon this subject, it is necessary to observe the stand- I 
 point of interest from which he writes, and the interest of the \ 
 country to which he belongs. 
 
 It has been said that silver has become depreciated by over- 
 production. But the statement is groundless. The demand for 
 it has been suddenly and exceptionally dimished by demonetiza- 
 tion, and by suspensions of specie payments in countries having 
 silver as their specie standard. 
 
 In 1797, England, while engaged in the continental wars with 
 Napoleon, suspended specie payments. Up to that time she 
 had, like the rest of the world, used the double standard of gold 
 and silver. This suspension of specie payments continued 
 about twenty-five years. In ^816^ before any serious effort to 
 resume was made, and while neither metal was in actual 
 act_of_parliament was gat-Jiirough demonetizing silvej\ 
 measure was__brought about by the aristocratic^wealth of 
 
 beneficial to what has-been called the 
 
 plutocracy, butwhen the_j^sjAmrj>tior^ in gold came, it was not 
 beneficial to ttie~English people. Nor can I suppose that, while 
 England stood alone in her exclusion of silver, her position se- 
 riously affected the value of that metal. It replaced in other 
 countries the gold which was absorbed by Great Britain, and was 
 as much in demand as before. 
 
 But in 1871 the German Empire, which prior to that time 
 had the single standard of silver, and which had just exacted 
 a thousand millions of dollars in gold from France, changed its 
 standard from silver to gold. In 1873, the United States 
 
O REMONETIZATION OF SILVER. 
 
 stopped coining the silver dollar (except the trade dollar for use 
 in Asia, which need not be particularly noticed here), and in 
 1874, took away its character of legal-tender for sums above 
 five dollars. This accomplished its demonetization. In 1876, 
 France, Italy, Belgium, Switzerland and Greece entered into 
 what they denominated the Latin Union, for limiting the coin- 
 age of silver- in their respective countries, to protect themselves 
 from the apprehended influx of silver from Germany. Mean- 
 time, Russia and Austria, whose specie standard is silver, are 
 under a suspension of specie payments,, furnishing* no market 
 for silver, and have even let go what they had. This action of 
 the leading commercial nations of the world accounts for the 
 present depreciation of silver. 
 
 _Mr. Ernest Seyd, in his recent work on "The Fall in the 
 Price of Silver," makes the distinction between nations that are 
 internationally rich and those that are internationally poor, by 
 which we are to understand that nations which are indebted to 
 other nations, or to the people of other nations, however rich in 
 their posessions, are internationally poor, and, on the contrary, 
 that those whose indebtedness is held at home, and the people 
 of which also hold the indebtedness of the Government and 
 people of other nations, are internationally rich. England, Ger- 
 many, France, Holland, Switzerland, with, perhaps, Denmark 
 
 i and Sweden, are creditors. Austria, Russia, Italy, the United 
 States, the British Colonies, Spain, Portugal, Turkey, with, per- 
 haps, the South American Republics, are debtors. England and 
 
 1 Germany may, perhaps, be regarded as the largest creditors. 
 The United States may, perhaps, be regarded as the largest 
 debtor, Her bonds and the indebtedness of her people are held 
 in vast amounts in England and in Germany. England holds 
 more than five thousand millions of foreign secureties, Germany 
 more than twenty-seven hundred millions, and France more than 
 twenty-five hundred millions, making an aggregate of more 
 than ten thousand millions, of which England and Germany 
 have more than eight thousand millions. When we realize that 
 the value taken from silver is added to gold, we can comprehend 
 the paramount interest of the creditor nations, at the present 
 time, in regard to the single and double standard. 
 
 Whatever enhances the value of the medium in which those 
 foreign securities are to be paid, increases the value of the 
 
REMONETIZAT1ON OF SILVER. / 
 
 bonds, or other forms of credit in the hands of the creditor, 
 and adds to the burden of the obligation on the part of the 
 debtor. The same distinction exists between the interest of 
 the individual creditor and debtor at home. These differences 
 and opposing interests are never to be lost sight of, in the dis- 
 cussion of the currency which is to pay our debts at home, as 
 well as our debts abroad. 
 
 I have said that the ideas of the value of property de- 
 pended on the quantity of the precious metals. Silver has 
 contributed as much to the standard of value, as Gold. It 
 has contributed to the world's stock of coin nearly one-half; 
 for a large part of the history of the world more than one-half, 
 and at the present time it does not fall far below it. Although 
 a much larger amount of silver is used in the arts, yet, when 
 we take into consideration the vast population of Asia, who 
 use silver as their only currency, and the several countries of 
 Europe and South America that use silver as their only 
 standard, or the double standard of silver and gold, and the 
 estimated amount of silver coin existing in those countries, it 
 is clear that in the aggregate silver contributes nearly one-half 
 of the currency in circulation at the present time. The popu- 
 lation of the countries which have the silver standard alone is 
 much greater than of those that have the gold standard alone, 
 and, in fact, greater than both those that have the gold standard 
 alone and those that have the double standard ; including as 
 they do the most populous nations of Asia, and Austria and 
 Russia in Europe. But the United States are now ranking 
 among those that have the gold standard alone. France still 
 retains the double standard. 
 
8 REMONETIZATION OF SILVER. 
 
 The following table is interesting, as showing how the silver 
 and gold have been distributed through the world: 
 
 OOUNTRIES HAVING THE SILVER STANDARD ALONE, 
 
 POPULATION.' 
 
 Austria-Hungary 37,700,000 
 
 ostaRica ' 200,000 
 
 Argentine Republic 2,000,000 
 
 China 425,000,000 
 
 Columbia 3.000,000 
 
 Equador 1,000,000 
 
 Guatemala 1,200,000 
 
 Honduras 300,000 
 
 India 190,000,000 
 
 Mexico 9,300,000 
 
 Nicaragua 250,000 
 
 Peru , 2,700,000 
 
 Russia 86,500,000 
 
 San Salvador 600,000 
 
 Tripoli 1,000,000 
 
 Tunis 2,000,000 
 
 Total 762,750,000 
 
 OOUNTRIES HAVING THE GOLD AND SILVER STANDARD, 
 
 POPULATION. 
 
 Belgium 5,350,000 
 
 Bolivia 2,000,000 
 
 Algeria 2,500,000 
 
 France 36,100,000 
 
 Greece 1,500,000 
 
 Italy :..... 27,500,000 
 
 Netherlands 4,000,000 
 
 Spain 16,500,000 
 
 Switzerland 2,700,000 
 
 uba and Porto Rico 2,000,000 
 
 Total 100,150,000 
 
REMONETIZATION OF SILVER. 9 
 
 OOUNTKIES HAYING THE GOLD STANDARD ALONE. 
 
 POPULATION. 
 
 Brazil 10,000,000 
 
 Australia 2,000,000 
 
 Canada and other British Colonies in North America 
 
 and the West Indies 5,000,000 
 
 'Chili 2,000,000 
 
 Denmark 2,000,000 
 
 Egypt 17,000,000 
 
 Oreat Britain JJ1, 000,000 
 
 Germany 42,700,000 
 
 Hawaiian Islands 100,000 
 
 Japan ^,000,000 
 
 Liberia 700,000 
 
 Norway 1,800,000 
 
 Portugal 4,300,000 
 
 Sweden 4,400,000 
 
 Turkey 28,000,000 
 
 United States 88,500,000 
 
 Total 22:',,100,000 
 
 Here, as will be seen, are twenty-six countries still using 
 -silver as a legal tender, and sixteen countries in which silver 
 has been demonetized. 
 
 Although it appears by this table that gold forms the currency 
 of some nations and silver of some, and some countries have 
 the double standard, yet, in a cosmopolitan sense, we may still 
 regard them as universal. The two supply the world with 
 money. The withdrawal, however, of any great commercial 
 country like the United States from the use of either metal 
 .affects its value. But the entire value of the total of both 
 metals remains constant. The prices of the world have, in fact 
 been based upon the quantities of both. 
 
 No man can say how much the value of gold or of silver 
 would be reduced if it were demonetized throughout the world; 
 but as both are used mainly as money, it is reasonable to 
 suppose that it would lose more than half its value. The 
 recent fall in the price of silver has not been caused by any 
 over-production of that metal. It is to be remembered that in 
 1873-4, when the legislation was enacted by Congress which 
 demonetized silver, it was worth more than gold by three per 
 cent., according to the legal ratio of sixteen to one existing 
 here between gold and silver. Since that time there has been 
 
IO REMONETIZATION OF SILVER. 
 
 a fall in the price of silver. It has not been by the over- 
 production of silver, for the plain reason that the statistics of 
 the mining of these metals show that during each year since 
 silver was demonetized, the product of gold has been greater 
 in value than that of silver; and, in the second place, this very 
 fact of demonetization of silver on the part of the United 
 States, together with the change of the German Empire from 
 the silver to the gold standard, with the pressure on the part 
 of England to proselyte other nations to its policy of the single 
 standard of gold, account in the most satisfactory manner for 
 the depreciation of silver. If the whole civilized world should 
 demonetize one-half of its precious metals, the effect \vould be 
 to leave us in the same condition as if the entire currency of 
 the world were contracted to that extent. The demonetizing 
 of silver, or of gold would have substantially the same effect. 
 England, Germany and the United States are not the whole 
 world, and cannot drive silver from France or the Asiatic 
 nations; yet, by driving it out of their own realms, they can 
 depreciate it. It would remain money in other parts of the 
 world, but by withdrawing the markets of England, Germany 
 and the United States, the demand for it would be greatly re- 
 duced ; at the same time the demand for gold would be equally 
 increased. It was clearly an oversight when the United States 
 followed England and Germany into the demonetization of silver. 
 It was not the work of either party; it was an inadvertence. 
 But it was a plain contraction of the basis of our currency, and, 
 as we had immense debts to pay to England and to Germany, 
 we wanted all our legitimate currency to pay them with. Eng- 
 land and Germany, as we have seen, held enormous amounts of 
 our bonds, and bonds of other Nations, and were interested to 
 have the interest and principal paid in a medium as valuable as 
 possible. If, by the demonetization of silver, gold shall be 
 made more valuable as compared to property, their bonds will 
 be just so much more valuable to them, and will be just so 
 much harder for the United States to pay, if they shall submit 
 to the contraction of their own currency by excluding silver. 
 The amount they will gain by the decline which has been 
 already brought about through the demonetization of silver and 
 the appreciation of gold, is more than seven per cent, on the 
 whole amount, and will go on increasing, unless it shall be 
 
REMONETIZATION OF SILVER. I I 
 
 resisted and checked. The United States was, and is under no 
 obligation to join in the crusade against silver. In 1873, it is 
 true, when the silver dollar was three per cent, more valuable 
 than the gold, Congress ceased to coin silver, and in 1874, by 
 the Revised Statutes, it limited its use as a legal tender to five 
 dollars. As our currency in circulation consisted, and still con- 
 sists of paper, the effect has been less in the past than it wil. 
 be in the future, if this state of things continues. 
 
 Of the power of Congress to restore silver to its old place 
 in the currency, I have no doubt. The American silver dollar, 
 as adopted in 1792, was the successor to the Spanish milled 
 dollar, which had been made a legal tender by act of Congress, 
 and was in general circulation. It contained the same -quan- 
 tity, viz: 371^ grains of pure silver, and it has remained the 
 same to this day, nothwithstanding the change made in the 
 gold dollar when, in 1834, the ratio of 1 6 to I was adopted in 
 place of 15 to i. The Funding Act of July 14, 1870, for the 
 purpose of retiring the five-twenty six per cent, bonds, pro- 
 vides for the issue of bonds bearing interest at five, four and 
 a half, and four per cent., to the aggregate amount of fifteen 
 hundred millions of dollars, which were made ''redeemable in 
 coin at tJie present standard value, bearing interest payable in 
 such coin." In the Resumption Act of 1875, the Secretary of 
 the Treasury was authorized "to issue, sell and dispose of, at 
 not less than par in coin, either of the description of bonds of 
 the United States described in the act of Congress approved 
 July 14, 1870." All the bonds of the United States, therefore, 
 whether under any of the acts of Congress prior to the fund- 
 ing act of 1870, or under that act, are redeemable in coin of 
 the standard value of July 14, 1870, of which the ancient silver 
 dollar was one. I find nothing in our legislation to prevent a 
 provision, by act of Congress, for coining the silver dollar, 
 to be a legal tender without limit. On the other hand, the re- 
 monetization of silver will not prevent us from paying our 
 bonds in gold. It is not necessary that I should say in this 
 discussion what discretion ought to be exercised by the Govern- 
 ment in the use of silver or gold coin in the payment of bonds 
 which may have been taken under assurances that they would 
 be redeemed in gold. Our government will, undoubtedly, act 
 in the highest good faith, and will not permit purchasers of 
 

 12 REMONETIZATION OF SILVER. 
 
 bonds to be deceived as to the medium in which they shall be 
 paid. 
 
 Congress could, by express enactment, provide for the issue 
 and sale of bonds payable in gold. But all that is material to 
 this discussion is the conclusion that there is no constitutional, 
 or legal, or moral objection to the provision by act of Congress 
 for the coining and putting into circulation the old silver dollar, 
 and making it an unlimited legal tender in payment of debts. 
 
 But aside from the question of constitutional power there is 
 nothing in the history of the country, nor even in the legisla- 
 tion of the country, that ought to create the expectation on the 
 part of the creditors, national or individual, that silver should 
 be permanently excluded from the currency of the United 
 States. All changes in the standard of values affect the rela- 
 tions between debtors and creditors, and should not be made 
 without clear and urgent reasons. They are sometimes una- 
 voidable. But how much more just would it be to restore 
 silver to its old place now, as we are about to enter upon the 
 resumption of specie payments, than it was three years ago, to 
 exclude it ? That was an incipient wrong, which has done more 
 by its influence abroad to depreciate silver, than by any actual 
 disuse at home, for the reason that our currency in circulation 
 has been paper. What influence our legislation against silver 
 may have had in its depreciation, we shall not know until it has 
 been restored. But in the great warfare of England for the 
 exclusion of silver, we find ourselves unexpectedly, and against 
 tour own interests, on the side of England. 
 
 It is claimed that silver is so cheap now, that it would be a 
 sort of repudiation to pay our debts in a medium so much less 
 valuable than gold. We have seen how it has happened that 
 the value which has been taken from the silver, has been added 
 to gold. By restoring the silver dollar it is probable that it 
 would so far regain its old value as to be equal to gold, which 
 it exceeded, when demonetized, by three per cent. It is urged 
 by some who advocate the double standard, that the old ratio 
 of sixteen to one, which \vas adopted by the act of 1834, 
 isolates the United States from the rest of the world, and will 
 drive gold out of the country. 
 
 Mr. Cernuschi, who was called upon to testify before the 
 United States Monetary Commission, and who has written 
 
REMONETIZAT1ON OF SILVER. 13 
 
 learnedly upon the subject, insists that the ratio of fifteen and 
 one half to one, which is the ratio adopted by France and the 
 Latin Union, should be also adopted by the United States, and 
 he goes so far as to say that unless we adopt that ratio, it would 
 be better to "maintain greenbacks." I am at a loss to under- 
 stand how he could entertain such an opinion. But he is, after 
 all, a citizen of France, one of the creditor nations of the world, 
 and not concerned as a debtor in the payment of international 
 debts. He seems to overlook the vast interest which the United 
 States has as a debtor to England and France and to Germany, 
 in the discussion of this subject, while he confines his attention 
 to the matter of exchanges, and the question of what country 
 shall have the most gold in actual circulation. 
 
 An act changing the ratio from sixteen to one, to fifteen and 
 a half to one might not be unconstitutional. But all our exist- 
 ing debts were contracted while our legal ratio between silver 
 and gold was sixteen to one, and such an act would authorize 
 the payment of our bonds with a less amount of silver, than 
 would have been required by law when the bonds were issued. 
 
 It is not at all probable that the acts demonetizing silver 
 would ever have passed, if the use of metallic currency had not 
 been at the time suspended. It is a remarkable coincidence' 
 that England was led into the same measure, while under 
 suspension of specie payments. This also accounts, in part, 
 for whatever financial distress followed the resumption, a few 
 years after, on gold alone. We do not propose to fall into the 
 same mistake. 
 
 There are many reasons for retaining silver as a standard of 
 value. Mr. Cernuschi makes a good argument in favor of Eng- 
 land's returning to the bi-metallic standard, and shows how 
 much better it would be for her East India colonies, that use 
 the silver standard alone, and by the present depreciation of 
 that metal are made to deal with England at a ruinous loss. 
 Yet England is inflexible. He shows how much more con- 
 venient and fair it would be to use both metals, and looks to 
 either a general agreement among nations in favor of the re- 
 monetization of silver, or to a concurrence of the Latin Union, 
 consisting of France, Belgium, Italy, Switzerland and Greece, 
 with the United States, to withstand the influence of England 
 and Germany. In all this speculation concerning the supposed 
 
14 REMONETIZATION OF SILVER. 
 
 "parliament of man," and in the prediction of failure unless 
 we act with the Latin Union, and make the ratio of our silver 
 coin fifteen and a half to one instead of our old dollar, which 
 is sixteen to one, he evidently is looking to the reasons which 
 should influence a Frenchman, rather than to those that most 
 interest the United States. Undoubtedly it would facilitate in- 
 ternational exchanges to have the same ratio adopted by all 
 nations, and if not by all nations, by as many as practicable; 
 but the great reason that is and should be paramount with us, 
 that we owe moneys at home and abroad which we have agreed 
 to pay in silver or gold, with the ratio of sixteen to one, bears 
 differently on France, which is a creditor with no foreign debts 
 to pay. While we may well go to France, therefore, for her 
 experience and advice, we may not follow her advice too im- 
 plicitly. 
 
 England and the United States have distinct interests on this 
 subject, not only as creditors and debtors, but also as producers 
 of the precious metals. Gold at present is chiefly a British pro- 
 duct, as will appear from the following estimated annual gold 
 product of the world, at the latest dates for which the statistics 
 are attainable in the various reports : 
 
 The United States, 1875 $26,000,000 
 
 Australia, &c., 1872 58,000,000 
 
 British Columbia 2,000,000 
 
 Canada and Nova Scotia 500,000 
 
 Other British possessions and British Isles 1,500,000 
 
 Total British possessions $62,000,000 
 
 Balance of the world 30,000,000 
 
 Total world $118,000,000 
 
 From this table it will be observed that of the $118,000,000 
 which represents the annual product of the world, fifty-two and 
 one-half per cent, was obtained in countries over which the 
 British flag waved, or which were subject to British domination. 
 
 Silver, on the contrary, is at present chiefly an American pro- 
 duct, as will appear from the following estimate. The most 
 authentic returns I have been able to obtain are for the year 
 1873, as follows: 
 
REMONETIZATIOX OF SILVER. 15 
 
 Great Britain and Colonies $1,000,000 
 
 Sweden and Norway L'~>0,000 
 
 Russia 500,000 
 
 Austria-Hungary 1,600,000 
 
 German Empire 3,000,000 
 
 France 2,000,000 
 
 Italy 500,000 
 
 Mexico 20,000,000 
 
 Central America and South America 8,000,000 
 
 Canada 000,000 
 
 United States 36,500,000 
 
 Total $76,250,000 
 
 By still more recent returns it appears that at the present time 
 the entire annual product of silver is but about $70,000,000, of 
 which the United States produces $45,000,000, and all the rest 
 of the world less than $30,000,000. England and her depend- 
 encies produce less than $2,000,000. These figures, together 
 with the characteristic insular sentiment of England wherever 
 she has an interest, account for her utter indifference to the fate 
 of silver, which she neither mines nor coins. 
 
 If we allow the war upon silver to go on with our concur- 
 rence, or without our determined opposition, we betray our own 
 interests as producers of silver. That, however, is far less im- 
 portant than that we maintain bur right to the aid of silver in 
 resuming specie payments, and in paying our debts. These 
 two reasons have small influence with France, which has no 
 foreign debts to pay, nor any silver mines to work. Her 
 writers, therefore, like the English, may well be expected to 
 have but a faint appreciation of our case. 
 
 Our people are also divided into two classes, according to 
 their own individual interests, that is, into creditors and debtors. 
 The large creditors are much more likely to join in the crusade 
 against silver, than those who have large debts to pay. Hence, 
 we witness powerful efforts to form public opinion on the subject, 
 and the press is, to a large extent, controlled by the authority 
 of wealth, in large cities, where the money power is most felt. 
 
 The general object should be to have each metal coined at 
 its intrinsic value, that both metals may be retained in our cir- 
 culation. This, the opponents of silver say, is impossible. 
 But it can be done as well as it has been done in the thousands 
 of years of silver coin which have passed. It has been said, by 
 
l6 REMONETIZATION OF SILVER. 
 
 way of discouragement, that we have been unfortunate in our 
 past experience, because we have sometimes a little over-valued 
 one metal, and sometimes we have over-valued the other, and' 
 have been able to have in full circulation but one at a time. It 
 is desirable that both silver and gold coin should circulate at 
 the same time, and I am persuaded that such will be the case, 
 to a large extent, if the old dollar shall be restored and coined 
 freely. France keeps her gold and silver coin in full circulation, 
 at a ratio of fifteen and one-half to one, thus valuing silver at 
 three and one-third per cent, above our standard, which is six- 
 teen to one. Yet her gold does not depart from the country. 
 She would not take our silver, for the reason that she has what 
 silver she wants, and limits her coinage of silver. She holds 
 both silver and gold in convenient proportions. 
 
 Germany, it is supposed, would flood us with silver. But the 
 silver that Germany has, is not demonetized. It is an unlimited 
 legal tender. It has only stopped its coinage, and I do not 
 believe that if the American Government shows that it intends, 
 to stand firm, Germany will be willing to part with her silver 
 at our ratio of sixteen to one. We have reason to expect that 
 our silver coin, with its ratio of sixteen to one, will regain a 
 part of the value lost by the demonetization and the general 
 war upon it, and that as it was before three and one-third above 
 gold, it will rise to par with it by the time we shall have drawn 
 from the silver market a hundred, or a hundred and fifty, or even 
 two hundred millions which will not be more than a reasonable 
 supply. At any rate, it would be a grave wrong to ourselves 
 to permit our silver coin to be depreciated below its intrinsic 
 value by the adv ?rse influence of our creditors, without an 
 effort to maintain it. And as it is obvious that our remoneti- 
 zation of silver at the old ratio would raise its value as com- 
 pared with gold, we should not give up that advantage. 
 
 Nor is there any danger from unlimited coinage. It would 
 require three years to coin a reasonable supply of silver for one- 
 half of our metallic currency. Meanwhile its tendency will be 
 upward. If there should ever be any occasion to interpose by 
 law to restrict the coinage, which I do not believe, it could be 
 done when we shall have become as well supplied with silver 
 coin, as France and Germany now are. If France had no more 
 silver coin than we have, she would not have thought of re- 
 stricting the silver coinage. 
 
REMONK FIXATION OF SIL\ KK. I J 
 
 But if it should turn out that our silver is really over-valued, ' 
 which I do not believe, the ratio itself can be changed after a 
 full opportunity to observe the course of exchanges, and the 
 effect of remonetization. ~" As'lsIIver was not over-valued in 
 1873 and 1874, when ifwas demonetixed, and as the new pro- 
 duct of silver has since that time been less than that of gold, 
 the presumption is that it is not over-valued now, and we are 
 bound out of a decent respect for ourselves and our national 
 interests, to try it. 
 
 There is not likely to he so much difficulty in fixing and main- 
 taining the proper ratio between gold and silver as some have 
 supposed, for the reason that if the Government establishes, as 
 it has done, a ratio which it regards as correct, and which is not 
 in fact, far from correct, the miners themselves will help to 
 keep them /;/ equilibria. If it shall be more profitable to mine 
 gold, they will let the silver mines rest, and 1'icc rcrsa. So 
 potent is law on this subject, that a concurrence of the nations 
 in establishing a ratio would make it permanent and universal, 
 and both metals would circulate freely. 
 
 It is not of the greatest importance that the precious metals 
 should be in the United States in equal, or in anything like 
 equal proportions. It should be our object to make the ratio 
 as correct as possible, and if the different nations could agree 
 upon the ratio, there would be no more difficulty on that sub- 
 
 ^W* 10 *"^ ^^ "^* ^ i^ ^"^*^ ta M"MMW^M^MM^**M^a M MMnM nHHM ^ MMM _^^^^^^^^H 
 
 ject; for the law and the mining interest together, would hold 
 them in their respective orbits, as surely 'as gravitation holds 
 the earth and the moon in their circles around the common 
 centre of gravity. 
 
 But I regard the idea of anything like a universal agreement 
 of the nations on this subject, at present, as chimerical. I see 
 not the slightest ground to hope that England will give up 
 her position and prejudices against silver. Professor Jevons, 
 I think, represented the English mind on the subject at the 
 meeting of scientific gentlemen at Saratoga, a few days since, 
 where he seemed to complain that the United States should 
 stand in the way of having silver cheap enough to be used for 
 culinary and household purposes, and declared that nothing 
 could change the English Government and people from their 
 position. He assumes that the United States will stand alone, 
 or only with such nations as China and India. It is quite 
 
1 8 REMONETIZATION OF SILVER. 
 
 impossible to imagine an intelligent mind more entirely oblivious 
 of anything outside of the self-interest and prejudices, or what 
 he himself describes as unreasonable "conservatism" of the ruling 
 classes of that country on the currency. 
 
 This waiting for the "parliament of man," or waiting to have 
 an agreement with nations whose interest, if not hostile to, is 
 different from our own, would prove a failure, and be wholly 
 unworthy of our national character. We can meet these nations 
 hereafter, whenever they shall invite us, or show an encouraging 
 disposition. Meanwhile, we have to resume specie payments, 
 and, with gold and silver money we can do it. But we have 
 no time to lose. It is important that our mints be run to their 
 full capacity. It will require more than three years to get out 
 as much silver as we can conveniently use, without detriment 
 to the gold we must also have. There is at present estimated 
 to be from one hundred and fifty to two hundred and fifty 
 millions of dollars of the precious metals in the country, one- 
 seventh only of which is silver. 
 
 Among the alarming consequences of our coining the old 
 silver dollar, it has been said that we should be flooded with 
 the old silver thalers of Germany, which are supposed to be 
 thrown out of use at home by the change from the silver to the 
 gold standard of the German Empire, in 1871. It is not worth 
 our while to be too easily alarmed. In the first place, if the 
 Germans send us their old silver for our gold, they will have to 
 pay the market rates for it. .But when the standard of value 
 was changed in Germany, how was it done? The gold mark, 
 of 23.82 cents, was made the unit of value, and the silver thaler 
 was retained as an unlimited legal tender, one thaler valued at 
 three gold marks, and the coinage of the thaler was stopped. 
 The thaler is as good as ever to the German, and the ratio at 
 which it is a legal tender is about fifteen and one- half to one; 
 that is, one ounce of gold in Germany is worth but fifteen and 
 one-half ounces of silver in the payment of domestic debts and 
 in the purchase of property. Is it probable that the thrift}' 
 Germans will bring their silver to America and pay it off for 
 gold at our ratio of sixteen to one that is, buy one oui ce of 
 gold for sixteen ounces of pure silver, and take the gold home 
 where it would not be legally worth but fifteen and one-half 
 ounces of silver? If so, let them come. We want s: ver from 
 
REMONETIZATIOX OF SILVER. 19 
 
 some source, and may as well take it from them as from others. 
 There should be no limit to the legal tender of silver, and the 
 coinage should be pushed vigorously, and I do not believe it 
 necessary to enact any limit to the amount to be coined, as the 
 Latin Union have done by agreement. Our condition is not 
 that of the Latin Union. If the course of events shall make 
 it necessary, as I trust it never will, a restriction can be enacted 
 in the future. Three years hence will probably be soon enough 
 to make any such provision. An unnecessary limitation would 
 tend to discourage our friends abroad, who are also interested 
 in maintaining the position of silver as a currency. The pros- 
 elytism of England on this subject is fearful. She shuts her 
 eyes to the interest of her vast Asiatic colonies from which she 
 has derived so much of her wealth, where silver is the principal, 
 if not the only currency. By depreciating silver she has caused 
 her own colonies to deal with her at a loss of from ten to twenty 
 per cent, on all their immense annual transactions. That the 
 home Government should be willing to depreciate the necessary 
 circulating medium of such rich and populous colonies under its 
 protection, would be a righteous cause for resistance and re- 
 bellion. The Government of India is reported to have declared, ' 
 * ' That famine, war, and drought are for India lesser evils than ' 
 is the depression of silver in London." 
 
 Whether it be expedient for our Government to make the 
 coinage of silver free to all comers at the cost of mintage, or to 
 coin only on Government account, may not be at present entirely 
 clear. Free coinage is to be preferred, unless there should be 
 developed some inconvenience or danger, which I am not willing 
 to anticipate. But the essential thing is, that the silver mints 
 should be immediately employed to their full capacity, until the 
 country is well supplied with silver coin, both the subsidiary / 
 coin and the silver dollar. 
 
 Mr. David Wells, who has taken an interest in this subject, 
 has communicated his views to the public. He takes ground 
 against the silver dollar, and his principal, if not only reason, is 
 that silver is too heavy and bulky to be carried conveniently in 
 the pocket. For small change it would be more convenient 
 than gold, and I think it would, to a considerable extent, take 
 the place of one dollar notes. There can be no doubt that the 
 silver dollar would be popular with the people. But what 
 
2O REMONETIZATION OF SILVER. 
 
 renders the objection of Mr. Wells groundless is, that the Amer- 
 ican people are accustomed to have their money, for any con- 
 siderable payments, in the form of paper, and would not carry 
 either silver or gold in their pockets, beyond very small sums. 
 Our business transactions will be carried on in some form of 
 paper circulation. The greenbacks already issued will be made 
 convertible, but will probably remain in circulation, until further 
 legislation shall require them to be "retired and cancelled." 
 We shall unquestionably have banks, and the Government may 
 issue notes for circulation, not as legal tender, bt to be con- 
 vertible into specie. I do not propose, in this speech, to dis- 
 cuss the question what paper shall be used as our ordinary 
 circulation. But the provision already made by the National 
 Banks and by the free banks, all of which are required to make 
 their paper absolutely secure by the purchase and deposit 
 with the Government, of Government bonds, with power in 
 the Government to sell them, if needed, to pay the circulation, 
 affords as good a currency as can be desired. No system could 
 be more absolutely secure, and I am sure that the Republican 
 party will never consent to authorize any banking to be done 
 with paper less secure. The system of State banks, w T hich the 
 , /. 1 1 Democratic platform of 1875 recommended, would fall far short 
 of this National security. I think that the Government should 
 | not, itself, become a banker by issuing any more circulation. 
 The power to create circulation is a dangerous power to place 
 in the hands of a body of politicians. No one can tell what 
 might some time be done by them under high political excite- 
 ment. 
 
 The National debt has a felicity in furnishing security for 
 bank paper, beyond anything hitherto discovered. It is to be 
 hoped that neither party will prove so reckless of the country's 
 safety, as to reject the plan of supplementing, by National bonds, 
 the ordinary reserve of coin in bank for the payment of the cir- 
 culation. By the observance of this caution we may have a 
 plentiful supply of paper circulation for business purposes, 
 without risk of any possible loss to the public. Its prompt 
 convertibility will rest on the specie it represents, while its ab- 
 solute security from loss to the holder will rest upon the public 
 credit. Meantime the gold and silver coins will be in use, 
 sufficiently to make us familiar with their peculiar beauties for 
 
REMONETIZATION OF SILVER. 21 
 
 both the eye and the ear. Business men will be happy, because 
 they can find encouragement for their best energies. Capitalists 
 will be happy, because there will be no longer a want of profit- 
 able investment for their capital. \Yorkingmen will be happy, 
 because they will no longer want employment at remunerative 
 prices. The National credit will certainly suffer no serious 
 injury. With the balance of trade with Europe in our favor, 
 and increasing, with specie payments well assured, and with all 
 our mines and our mints in full operation, and our public debt 
 showing a reduction every month, our public credit can not be 
 successfully cried down by all the bulls and bears that infest 
 the money markets of the world. 
 
THE POLICY OF RESUMPTION. 
 
 SPEECH 
 
 OF 
 
 JUDGE TAFT, 
 
 AT 
 
 Cincinnati, 0,, Saturday Evening, September 15th, 1877, 
 
 FELLOW-CITIZENS The historian, who in the future shall re- 
 cord the great political events of the nineteenth century, will 
 find none more important to the liberties of mankind, than those 
 which have transpired on the continent of America during the 
 sixteen years in which the Republican party has controlled the 
 destiny of the United States. The Republican party came into 
 existence of necessity. The perils of liberty compelled the 
 friends of free government to resist the tendency to barbarism 
 and slavery. No party has ever had such questions to solve, 
 nor such formidable oppositions to overcome. It has grappled 
 with the greatest questions, deliberated upon them, decided 
 them, and executing its decisions, has advanced to other prob- 
 lems which could not be avoided. It has been courageous, 
 thoughtful, and in the main, consistent and successful. Its 
 achievements form, and will ever form, the most interesting and 
 brilliant chapter of American history. 
 
 Of the Democratic party it is only necessary to say, that it has 
 consistently and strenuously opposed all the great and necessary 
 achievements of the Republicans ; that in doing so, it has belied 
 its ancient and time-honored principles, and forfeited its claim 
 to the confidence of the country. 
 
 Much as the Republican party has already accomplished, there 
 remains a broad field for future achievements. I do not propose 
 to enumerate all the important principles and measures to which 
 it stands pledged. The most instant and pressing problems now 
 to be solved, relate to the resumption of specie payments and 
 to the currency. The stress of civil war, which destroyed our 
 
THE POLICY OF RESUMPTION. 2$ 
 
 credit abroad for the time being, made it necessary to issue the 
 greenbacks and make them legal tender in payment of pre-exist- 
 ing, as well as future debts. Nothing but the exigencies of a 
 great war could have justified the Government in such a measure. 
 In the opinion of the Supreme Court of the United States and 
 in the judgment of mankind the Government was justified in 
 resorting to this extraordinary measure, and the Supreme Court 
 but expressed the enlightened opinion of the civilized world, 
 when it said, that the justification for such a measure would 
 cease with the passing away of the emergency. 
 
 As the Democratic party opposed the war for the Union, and. 
 this necessary measure to carry it on, so when the war had been 
 successfully brought to a close, it has opposed the recurrence by 
 the Government to a sound currency, and now insists upon the 
 continuation, in time of peace, of the issue of irredeemable legal- 
 tender paper, which could and can only be justified by the 
 emergencies of war, demanding "the immediate repeal of the 
 Resumption act," and calling for the "retention of greenback 
 currency." The reading of these clauses of the Democratic 
 platform for 18/7, in connection with that adopted by the same 
 party in Ohio, in 18/5, "demanding that the volume of the 
 (paper) currency be made and kept equal to the wants of trade," 
 and with a clause in the National Democratic platform of 1876 
 denouncing the Resumption act of 1875, and "demanding its 
 repeal," shows that party to be utterly reckless of the obliga- 
 tion of the country to return to a sound currency. 
 
 The issue of legal-tender paper, though necessary, was a tem- 
 porary expedient, and was so regarded by the people at the 
 time; and when the war was over, in 1865, both parties con- 
 curred in the enactment of a law authorizing the Secretary of 
 the Treasury to take up four millions of greenbacks per month, 
 in order to reduce the currency to its normal and proper volume, 
 and facilitate the return to specie payments. The Secretary <>f 
 the Treasury, Mr. McCollough, proceeded under that authority 
 until he had withdrawn forty-four millions of the greenback cur- 
 rency, when Congress moved by political alarm .and outcry, 
 withdrew the authority. I have always believed that if that ; 
 measure had been suffered to proceed, we should have long since 
 been able to resume specie payments without detriment to busi- 
 ness, and should have avoided the panic of 1873, and many other 
 
.24 THE POLICY OF RESUMPTION. 
 
 -embarrassments. The difficulty in resuming specie payments is 
 mainly political. The party which is out of office is able to 
 avail itself of the possible reduction of the currency to its 
 normal condition preliminary to the resumption of specie pay- 
 ments, to create an alarm in the public mind, by repeating and 
 vociferating in the popular ear, that contraction is ruining the 
 country, charging every man's poverty, and every man's disap- 
 pointment upon the Government, and by asserting that all the 
 .suffering and all the distress to which human life is always heir, 
 are chargeable to the want of irredeemable paper currency. 
 The Republican party having the control of the National Govern- 
 ment, and responsible for the proper measures to secure a sound 
 currency, though much delayed in its action by this political 
 -opposition, has made decided progress ; and, whereas, two years 
 ago, in 1875, when the Democratic orators in Ohio were urging 
 .a continuance of the greenback currency as the}' are to-day, the 
 difference between paper and specie was more than thirteen per 
 cent., it has now been reduced to four, and from week to week- 
 is "growing beautifully less." 
 
 Nevertheless, the Democratic orators now, as confidently as 
 then, declare against the return to specie payments, and seem 
 to be disappointed that we have come so nearly to a sound cur- 
 rency. There has been a depression in various branches of 
 business for a considerable time. The}' avail themselves of 
 these circumstances to charge all the inconvenience of such de- 
 
 -hcn the evidence is perfectly 
 but want of business, that 
 [{ has caused the depression. The chief embarrassment of the 
 Democratic leaders now arises from the apprehension that a 
 thorough revival of business is approaching. But, as the rising 
 credit of the country and the reduction of interest upon its public 
 debt has not discouraged their opposition to the financial meas- 
 ures of the Government, so a revival of the business of the 
 country and universal prosperity will not prevent their reiter- 
 ating and vociferating the coming on of ruin for the want of 
 irredeemable paper currency. 
 
 Their complaints and their denunciations are groundless. 
 Their sinister predictions are vain. It has been found impossi- 
 ble in the history of the business v avoid occasional, if 
 not periodical panics and depressions. Any unusual general 
 
 , these circumstances to charge all the 
 
 pression to the want of currency, wh< 
 \ .clear that it is not want of currency, 
 
THE POLICY OF RKSTMI'TIOX. 25 
 
 change in investments in a country is likely to be followed by 
 disappointment to some, and even in times of peace, business 
 depressions and panics have occurred as often as once in eight 
 or ten years in our country, and oftener in England. ^ n the 
 history of our country, during the last sixteen years, under the 
 Republican Adminstration, the wonder has been that more, and 
 more frequent financial panics have not been experienced. The 
 vast demand in time of war for the productions of our man- 
 ufacturers of iron, cotton, wool, and of all the materials of war, 
 and of eventhing that was made necessary by the war, caused 
 the sudden expansion of the manufacturing power of the country, 
 and the investment of the great majority of the capital of the 
 country in the manufacturing establishments which sustained 
 and carried the arm)* through its four years of service. When 
 the war was over, capital, with its characteristic inertia, remained 
 in the gigantic establishments where it had been placed during 
 the war, and produced iron and other articles of manufacture 
 far beyond the wants of the country in time of peace. The 
 result has been great over-production in the country. The 
 natural consequences oi this over-production to labor and in- 
 dustry, was postponed by the energy of business men and the 
 prudence of the Government, from year to year, far beyond the 
 time fixed by the philosophers and political economists of the 
 Democratic party. But the effects of the necessary change of 
 capital from the purposes to which it had been directed, in time 
 of war to other and different investments, though for a time 
 postponed, could not be entirely avoided. 
 
 Those effects are sufficient to account for the panic of 1873, 
 and the embarrassments which the business of the country has 
 experienced, since they involve not merely the great and various 
 changes of the investments of vast amounts of capital, but also 
 a change of the employments on the part of the people, who 
 had been collected from the country and agricultur.il employ- 
 ments, to the cities and populous points, where the great man- 
 ufacturing establishments were carried on. It has become 
 
 ' "^^ *BBMMMMMBMHMM 
 
 ssary that the population so called together should, to 
 considerable extent, be again distributed to agricultural pur- 
 suits, where they may be equitably compensated for their in- 
 . ciustry. From this gvr, '^satisfaction among the cm- 
 
 ployed, and disappointment among the employers were inevitable. 
 
26 THE POLICY OF RESUMPTION. 
 
 s Time and the characteristic good sense of the American people,, 
 both those who have acquired, and those who, by their labor, 
 are acquiring capital, will readjust the various industries of 
 the country, and mollify and finally remove the hardships of 
 which they now complain. This desirable consummation may 
 undoubtedly be facilitated by legislation in collecting and dis- 
 tributing correct and practical knowledge of the facts, from 
 which every man can form a 'just judgment of his own interest. 
 
 But our Democratic speakers assume without proof, that the 
 sufferings of the people of this country exceed the sufferings of 
 I all other people, of all other countries, and of all other times, 
 and that they have but one cause, and that is the want of irre- 
 vX?? deemable paper money. They assume this as a fact without 
 proof, and against the plainest evidence. The credit of our 
 country never was better. No Government has yet been able 
 to negotiate its bonds at par, for less interest than four per cent., 
 and here at home, money has never borne a less interest than 
 it does at the present time, nor at any time have there been 
 larger amounts of unemployed capital in the form of currency 
 than at present. What good, then, could an increase of the 
 volume of currency do to the laboring, or any other class of 
 the community ? 
 
 Now, the fact that there is abundant money accumulated,, 
 ready for use, and as much capital as there ever has been in the 
 form of unemployed currency, shows that is not want of currency 
 that keeps men out of profitable employment. It has been as- 
 "sumed by the Democratic orators that the contraction of currency 
 produced the panic of 1873, and has produced all the financial 
 embarrassments since. This assumption is made absurd by the 
 fact that there was no contraction in 1873. The volume of cur- 
 rency remained as large as it ever had been before, and very 
 much larger than it was before the war. 
 
 ~ It is true that there was during the war, and for a year or two 
 afterward, growing out of the settlement of the war claims, an 
 amount of floating and temporary debt, in the form of Treasury 
 notes bearing interest, compound interest notes, and certificates 
 of indebtedness, which General Gary and Mr. Ewing, in the 
 political campaign of 1875, called currency, and because they 
 were paid and merged into a funding debt, they called it contrac- 
 tion of the currency. This had all happened, however, previous 
 
THE POLICY OF RESUMPTION. 2/ 
 
 to the first election of General Grant to the presidency, 
 five years before the panic. The legitimate currency of the 
 country, consisting of the United States notes and the circula- 
 tion issued by the banks, amounted to about seven hundred 
 millions of dollars, and from 1868 to 1873, when the panic 
 occurred, the amount had increased, instead of diminished, 
 fifty millions, and that is the contraction, to which these Demo- 
 cratic philosophers ascribe the panic. It is also to be borne in 
 mind that during the entire first term of President Grant's ad- 
 ministration the business interests of the country were unusually 
 prosperous. There was no lack of currency to do the business 
 of the country; employment was plenty, and business enter- 
 prises were entered upon with hope and success. The panic 
 came with the same volume of currency that had existed, 
 slightly increased, and that volume of currency has not been 
 sensibly diminished since. There is the same plethora of cur- 
 rency now that there was before, and the only diminution that 
 has happened in the circulation has arisen from the voluntary 
 surrender by the banks of the privilege of issuing currency 
 which they could not profitably employ, amounting to not 
 exceeding fifty millions, leaving the currency slightly less in 
 amount, while in its value, it is vastly greater than in 1869,. 
 when the presidency of General Grant commenced, and when 
 business was brisk. 
 
 Another evidence of the futility and falsehood of the state- 
 ments of the leaders of the Democratic party is, that since 1875,. 
 when the Resumption Act was passed, we have had a law 
 authorizing free banking, so that any man is free to enter the 
 banking business, and issue currency on the reasonable terms 
 of that act by giving the security which the law requires to 
 protect the holders of the currency issued. If there were really 
 any actual demand for a greater amount of currency .than now 
 exists, there would be inducements for men of capital to enter 
 into the banking business under the law of Congress authorizing 
 free banking, and issue more currency. This is a demonstration 
 that the outcry against contraction of the currency is wholly 
 groundless, and a mere trick of the stump. Hard times, there- 
 fore, are not caused by want of more paper money. Really/, 
 good times, ought not to be expected until we have returned to 
 the standard currency of the world, based upon gold and silver 
 
.28 THE POLICY OF RESUMPTION. 
 
 Until such return, there will necessarily be apprehension and 
 fluctuation. The suspension has been too long, and creates 
 distrust. Gold and silver have measured the values of all 
 nations, from the beginning of civilization. The business men 
 of the country, and the people are conscious that any cur- 
 rency not based upon gold and silver, is irregular ; and that the 
 financial affairs of the country will never be at rest until it re- 
 turns to its historical money. Capitalists are cautious how they 
 allow their funds to go out on such long credits as are necessary 
 to the encouragement of enterprise in business, and enterprising 
 men without capital, are not willing to go into business on bor- 
 rowed capital for a like reason. Confidence is a great matter 
 in finance. 
 
 As the time approaches for the resumption of specie pay- 
 ments under the act of 1875, the Democratic leaders of Ohio, 
 forgetting that their party helped to pass the act, though some 
 opposed it because it delayed resumption too long, denounce it 
 because it fixes a day for resumption, and demand its repeal. 
 "Resumption may be a good thing, but the fixing a time when 
 it shall come, is ruinous." By a singular infelicity these eloquent 
 ^orators have referred to France as authority in favor of their 
 claim for paper money, and as an example of what they regard 
 wisdom in affairs of finance and currency, overlooking again the 
 important fact that France has seta day, the 1st day of January, 
 1878, for the resumption of specie payments, and that the finan- 
 cial world expects the return of France to specie payments on 
 that day with the same confidence that it expects the next New 
 Year. 
 
 The day fixed by our law is one year later, January, 1879. 
 In this we 'follow not the example of France only, but of every 
 country that has ever resumed specie payments, after having 
 once embarked upon the uncertain tide of irredeemable paper. 
 It is important that the financial world and the people should 
 know when that great event is to occur, in order to prepare and 
 be ready for it. It is now manifest that all the various interests 
 of the country are preparing for this necessary event. The 
 greenbacks are approaching gold in value, and it is no longer 
 difficult to foresee that before the 1st day of January, 1879, 
 they will be equal, to the infinite advantage of every kind of 
 industry, and to the disadvantage only of croaking politicians. 
 
THE POLICY OF RESUMPTION. 2C) 
 
 None will be more benefited than the workingmen of the 
 country. Capital will no longer doubt and hesitate, but will 
 go into business enterprises, and the workingman will receive 
 the reward of his labor in the same currency that pays the 
 interest of the bondholder. The young giant of American in- 
 dustry may well be timid while wafted about in the balloon 
 of paper money, but when he shall once more stand upon the 
 solid ground, he will resume his natural strength and vigor. 
 
 I have said that the allusion by Mr. Ewing to France as fur- 
 nishing an example in favor of the financial policy which he 
 advocates against resumption, and against the fixing of a day 
 for resumption, was unfortunate, because France is about to 
 resume, and has long since fixed the day of resumption. But 
 his allusions to the financial history of France, and to that of 
 England, are equally unfortunate, for the reason that in the 
 long experience of each of those countries, the ruinous con- 
 sequences of his policy of an irredeemable paper currency, 
 have been demonstrated beyond doubt or dispute. It was in 
 France, where John Law as the Comptroller General of the 
 Finances of the Kingdom, first introduced his "system" of 
 an irredeemable paper currency, more than a hundred and fifty 
 years ago. He was annoyed by the tendency of gold and 
 silver to go abroad. 
 
 He said : 
 
 "BUT HERE IS THE SOVEREIGN REMEDY FOR THIS ILL; IT IS 
 TO GIVE THE PEOPLE A SIGN OF TRANSMISSION [currency] OF 
 WHICH THE MATERIALS SHALL BE OF NATIVE GROWTH, THE VOL- 
 UME OF WHICH THE PRINCE MAY AUGMENT AND DIMINISH, IN 
 ACCORDANCE WITH THE WANTS OF THE STATE AND OF COM- 
 MERCE, AND ABOVE ALL WHICH SHALL HAVE NO INTRINSIC 
 
 VALUE." Lettres sur le Xouvcau Systcme des Finances. Econo- 
 mists Financiers du XV I I line Sicclc, p. 675. Paris, 1843. Gnil. 
 lauoinie. 
 
 Nothing could more precisely express the idea of the Dem- 
 ocratic financial platform of 1875, if we substitute "the Con. 
 gress" for "the Prince." And if we are to take the opening 
 speech of Mr. Ewing as a fair representation of the Democratic 
 platform in the present year, we are bound to conclude that the 
 same hostility to a sound currency, redeemable in coin, controls 
 the Democratic party now. Neither Mr. Law, as "Comptroller 
 
30 THE POLICY OF RESUMPTION. 
 
 General of the Finances of France," looked for resumption of 
 specie payments at any time, nor does Mr. Ewing, or the Dem- 
 ocratic party of Ohio look for specie payments; but, on the con- 
 trary, they both and equally would ' ' give the people a currency 
 of which the materials shall be of native growth, the volume of 
 which the Prince, or the Legislature may augment and diminish, 
 in accordance with the wants of the State and of commerce, 
 and above all, which shall have no intrinsic value." Law had 
 intelligence, a fervid zeal and great financial ability, with the 
 whole power of France to sustain his plan. It is not necesssry 
 that I should detail the working of his "system," as it has 
 always been called. It went into operation with the highest 
 hope, promising relief to all the distressed classes and to the 
 State. For a brief period it gave apparent prosperity, but in 
 a few years ended in general financial ruin and misery to all 
 grades of people, from which they slowly, but gradually re- 
 covered, by industry and by specie payments. 
 
 But some seventy years afterward, this same France, in the 
 time of the famous revolution of 1789, was again lured into 
 the adoption of the same principle of irredeemable paper money, 
 under a more specious form. The Government had confiscated 
 the real property of the Church and priesthood to an enormous 
 amount, estimated at four thousand millions of francs. It was 
 urged in the French Chamber of Deputies, by the renowned 
 Mirabeau and others, that the paper issued as circulation known 
 as assignats, based upon this vast amount of public property, 
 would be secure, and as good currency as gold and silver coin. 
 An issue of four hundred millions was authorized, which was 
 made by law the limit. It awakened speculation, and created 
 high hope of business prosperity. It was soon exhausted, how- 
 ever, and the cry was raised for another issue, which, after long 
 deliberation and debate, with full consideration of the past ex- 
 perience of the Nation, was authorized, but another limit was 
 solmnly fixed by the statute at 1,2*' ,000,000 francs. As soon 
 as the business and prices had beer- adjusted to that amount 
 of currency, hard times came on ain, and the irrepressible 
 clamor arose for more money. r a mighty struggle the 
 
 House of Delegates again yielded ! one issue after another 
 succeeded, until nine thousand m. had been issued. The 
 
 public had lost all confidence in i it was worthless. An 
 
THE POLICY OF RESUMPTION. 3! 
 
 attempt was then made to revive the credit of the country, by 
 specifically pledging the vast amounts of property of the nobility, 
 which had been confiscated by the Government, to secure the 
 issue of a new paper under the name of mandats. They were 
 doomed to the same utter and disastrous failure* which had fol- 
 lowed the assignats. No prosperity came to France, till it was 
 worked out through the medium of gold and silver, in which all 
 business men had confidence. 
 
 By these great historic lessons France has been taught to 
 avoid irredeemable paper currency, and that if in any great 
 emergency, like the German invasion, or like our own American 
 civil war, it is necessary for a temporary purpose to borrow 
 money under the form of a paper currency, the Government 
 should immediately determine to return to specie payments, fix 
 a reasonable day for that purpose, and work resolutely and in- 
 flexibly to that end. The French Government, acting upon 
 that principle, when, in 1871, it was compelled to issue paper 
 money in order to pay a thousand millions of dollars in gold to 
 Germany, immediately determined to return to specie payments 
 in six years, and fixed the ist day of January, 1878, as the day, 
 and the policy of the gradual contraction of the paper currency 
 was openly declared, adopted and carried out. The people of 
 France and the financial world understand the sincerity and de- 
 termination of the French Government, and have no doubt that 
 resumption will come, as provided by law. Meantime, French 
 industry was never more active and prosperous, and the paper 
 currency which was destined to be equal to gold and silver on 
 the ist day of January, 1878, has become so already, in antici- 
 pation of that day, without shock to business or any just com- 
 plaint from the rich or the poor. 
 
 We need no stronger argument in support of the Republican 
 policy of a recurrence to specie payments. The ist of January, 
 1879, will be about seventeen years after our suspension in 1862. 
 
 The example and the argument derived from the history of 
 France are complete, to show, not that in an overwhelming 
 emergency credit money may not be issued, but that it can be 
 justified only by such an emergency, and that, when issued, 
 the Government is bound to provide, at the earliest practicable 
 moment for specie payments. That no unnecessary shock may- 
 be produced, a day should be fixed, by which all the people and 
 
32 THE POLICY OF RESUMPTION. 
 
 the financial world may know on what to rely. France has 
 illustrated our case entirely. What effect do you suppose these 
 orators would have upon the French Chamber of Deputies, if 
 they were to sound their alarm to that body with dire predic- 
 tions of ruin from resumption, and from fixing a day and noti- 
 fying the people when it was coming? 
 
 I am here reminded of the declaration of Napoleon, when it 
 was proposed to him to resort to paper money in a financial 
 pressure caused by his exhaustive wars. He wrote to his Min- 
 ister, " While I lire I will never resort to irredeemable paper" 
 And he never did. 
 
 But they also refer to England, as if they could find support 
 in British history. I must not take your time to trace the 
 financial experience of that country. England has been so 
 thoroughly taught the same lessons as France on the subject 
 of irredeemable paper currency, that these Democratic speeches, 
 if made in that country, would be received with infinite derision. 
 John Bull learns a great deal more by experience, than by 
 didactic theories. The South Sea bubbles have made an in- 
 delible mark on his memory, and what he regrets in regard 
 to his issue of irredeemable paper in 1797, is that he waited 
 twenty-five years before resuming. He found that waiting so 
 long made matters worse, and it became a question with him 
 then, as it is now with us, whether resumption should pass 
 into the indefinite future and become impossible, or should be 
 fixed for some reasonable date, and accomplished as a part of 
 the national destiny? What he should also regret is, that 
 while under the stupor of suspension, he suffered silver to be 
 demonetized. To refuse to take the necessary steps for a 
 return to a sound and honest currency, would be political in- 
 fidelity. 
 
 ii their tirade against everything done by our Government, 
 these orators seek to make a point by comparing the rate of 
 taxation, per capita, in this country with the rates in England, 
 in France and in Austria. They omit, however, to mention 
 that we are paying off our debt, and have already reduced it 
 \ many hundred millions, which England and those other mon- 
 archies never intend to clo with theirs. The National debt is 
 Sone of their permanent institutions, a guaranty of the per- 
 v^petuity of royal and aristocratic power. 
 
THE POLICY OF RESUMPTION. 33 
 
 Let it not be supposed that the Republican party intends to 
 cast discredit upon the greenback currency. That currency 
 was issued for a great and necessary purpose, which it has ful- 
 filled, and the character of the country is identified with the 
 maintenance of its credit. Its existence reminds us of the 
 patriotism of the people, and the devotion of all branches of 
 the Government to the Union and welfare of the country. The 
 greenbacks which have been issued are not to be discarded, but 
 to be raised to the standard that is stamped upon their face, and 
 made equal to gold and silver. No man has a right to complain 
 of their redemption in coin, for they bear on their face the 
 promise of the United States to pay them ; and the Congress 
 of the United States, in the act of 1864, pledged the faith of the 
 Government to the holders of greenbacks and to the world, 
 that "the total amount of United States notes issued, or to be 
 issued, should never exceed four hundred millions," and in 1869 
 Congress again pledged the faith of the country to their pay- 
 ment "in coin or its equivalent," and to make provision, "at 
 the earliest practicable period for their redemption in coin," and 
 in 1875, in pursuance of its numerous promises already made, 
 and already too long deferred, again promised that they should 
 be made redeemable in gold and silver, on and after the 1st day 
 of January, 1879. Both creditors and debtors therefore, and 
 the business world have had due and timely notice of the re- 
 sumption of specie payments under the existing law. When 
 the process of equalizing the value of greenbacks and coin shall 
 be complete, and they are redeemable in gold and silver, the 
 motive of returning them to the Treasury will cease, and they 
 will undoubtedly remain in circulation as currency, making as 
 good a currency as this or any other country ever had. It 
 would rest upon the same foundation of National credit, which 
 that portion of the circulation of the Bank of England rests, 
 that does not represent the deposit of gold and silver in the 
 bank that is to say, there is issued by the Bank of England 
 an amount equal to seventy-five millions of dollars, which 
 rests upon the credit of the Nation; beyond that, the paper 
 issued represents the specie deposited in the bank. Our green- 
 backs would have this advantage over the similar circulation in 
 England, that our Constitution precludes any increase in the 
 volume of that kind of paper, in time of peace, while our 
 

 34 THE POLICY OF RESUMPTION. 
 
 Government is bound to keep in the treasury sufficient specie 
 to make its paper at all times redeemable in coin. 
 
 Let no man suppose, however, that greenbacks are to be the 
 only currency used in the transaction of business. After the 
 day of resumption, all the paper that shall be in circulation, or 
 that shall be issued by whatever authority of law, will no longer 
 be irredeemable, but will be convertible into coin at the option 
 of the holder. Undoubtedly the resumption of specie pay- 
 ments will bring into use large amounts of gold and silver, so 
 that the currency of the country, by the addition of coin, 
 together with the greenbacks that shall remain in circulation, 
 and the bank paper redeemable in gold and silver, will make a 
 currency ample to meet the wants of trade. 
 
 I should have much greater apprehensions as to the success 
 of specie payments, if I did not suppose that Congress would 
 feel the urgent importance of restoring the silver dollar to its 
 old place among our national coins as a full legal tender. I shall 
 not take your time this evening to discuss the general grounds 
 upon which I recommend the remonetization of silver. But 
 there can be no reasonable doubt that the silver dollar may be 
 efficiently and constitutionally used in the redemption of green- 
 backs and in the payment of our debts. By the Resumption 
 act, which pledged the Government to return to specie payments 
 January 1 , 1 879, the greenbacks are made already to approach 
 gold in value, and will soon be equal to it. By the same 
 token, if Congress shall remonetize the silver dollar it will 
 directly be found equal to both paper and gold. I am pleased 
 to see that even Mr. Wells, who represents the American mo- 
 nometallists, admits that such an act will bring silver to par with 
 gold at our legal ratio of 16 to i. I think so too. 
 
 Considering the abundant product of our own silver mines, 
 the hope of procuring silver from abroad, the gold we have on 
 hand, and that which we also produce, the credit of our bonds, 
 the accumulating surplus of our revenues, the balance of trade 
 in our favor, the unbounded wealth, present and prospective, 
 of the Nation, and the undoubting faith of our people in the 
 destiny of our country, there can be no failure. When the 
 Government shall have made such preparations as it is now 
 making, and as it can make before 1879, and declares resumption, 
 as it has been commanded to do, and as it has promised to do, 
 
THE POLICY OF RESUMPTION. 35 
 
 in all the theorizers and croakers., domestic and foreign, will resist 
 vain. Seated in the confidence of the American people, who will 
 share in the blessings of this great National consummation, the 
 United States Government can defy the threats of ambitious 
 politicians and the predictions of theorists and speculators, at 
 home and abroad, who, though they all should combine in one 
 grand effort, can no more hinder the execution of this bene- 
 ficent design, than could the Homeric gods and goddesses, by 
 the golden chain let down from heaven, drag Jupiter from high 
 Olympus. 
 
Mod) us 
 
 or 
 
 IRIESTJIMIIPTIOlsr, 
 
 FROM 
 
 Speech Delivered at Toledo, Sept, 19, 1877, 
 
 I come now to the question of the resumption of specie pay- 
 ments, which is the most important issue at the present time 
 between the two parties. We can discuss the expediency of re- 
 monetizing silver with the Democratic orators, without much 
 conflict of opinion. The conflict, however, is developed, when 
 we consider what use is to be made of the re-monetized silver. 
 The Democratic party propose the immediate repeal of the Re- 
 sumption Act, and make no provision for, or suggestion of a re- 
 turn to specie payments at any time. In its platform of 1875, ^ 
 proposed to repeal the time fixed for resumption, and merely hint- 
 ted at the possibility of growing up to specie payments, at some 
 indefinite, if not impossible time, in the future. But now the 
 party has ceased to talk of resumption, except to urge the repeal 
 of the only provision that has been made for it. Its platform 
 and its orators, propose at one and the same time, the retention 
 of the greenback currency the remonetization of silver, and the 
 indefinite postponement of specie payments. 
 
 The first question that arises on this complex proposition is : 
 How would the country be any better off, than it is now? With- 
 out specie payments, silver coin would no more come into use, 
 than gold. The Republican party on the other hand proposes 
 to make the re-monetized silver immediately available in the 
 preparation for, end in the accomplishment of a sound currency 
 of silver and gold, and of paper convertible into silver and gold 
 at the option of the holder. Here is a direct issue between 
 the two parties. 
 
 I claim that the Democratic plan is inert : that it can furnish 
 no relief nor encouragement to me business community, while it 
 exposes the country to the demoralizing effects of irredeemable 
 
MODUS OPEfcANDl OF RESUMPTION. 37 
 
 paper, and to mortifying comparisons and losses when we deal 
 with foreign countries. On the other hand I claim, and hope to 
 make it clear to every candid listener, that by the plan of resump- 
 tion with both the precious metals and redeemable paper, we can 
 make silver as well as gold immediately useful, in awakening 
 new energy in business, with new encouragement to industry. 
 and in diffusing general prosperity, 
 
 Before proceeding further let us inquire what that resumption 
 is, for which the act of I4th Jan., 1875, provides. The lan- 
 guage of the Act is, that "after Jan. 1st, 1879, tne Secretary of 
 of the Treasury shall redeem in coin, the United States legal ten- 
 der notes then outstanding on their presentation for redemption, 
 at the Office of the Assistant Treasurer of the United States in 
 the city of New York, in sums not less than fifty dollars." 
 
 "And to enable the Secretary of the Treasury to prepare and 
 provide for the redemption in this .act authorized or required, he 
 is authorized to use any surplus revenues from time to time, in 
 the Treasury not otherwise appropriated, and to issue, sell, and 
 dispose of, at not less than par, in coin, either of the descriptions 
 of bonds of the United States described in the act of Congress, 
 approved July I4th, 1870, entitled an Act to authorize the refund- 
 ing the National debt, with like qualities, privileges, and exemp- 
 tions, to the extent necessary to carry this act into full effect, 
 and to use the proceeds thereof for the purposes aforesaid. And 
 all provisions of law inconsistent with the provisions of this act 
 are hereby repealed." 
 
 It thus appears, that the United States by this resumption Act 
 provides for the " redemption of the United States notes on their 
 presentation for redemption at the office of the Assistant Treas- 
 urer of the United States in the city of New York." And this 
 is the resumption, for which the Republican Administration is 
 now preparing, and which the Democratic party denounces. 
 
 But this redemption does not retire from circulation, or cancel 
 the greenbacks so presented and redeemed. By section 3579 of 
 the Revised Statutes of the United States, it is provided " that 
 when the United States notes are returned to the Treasury, 
 the public interest may require." By section 3582, it is pro- 
 they may be re-issued, from time to time, as the exigencies of 
 vided " that the authority given to the Secretary of the Treasury 
 to make any reduction of the currency, by retiring and cancelling 
 
38 MODUS OPERANDI OF RESUMPTION 
 
 United States notes, is suspended." The effect of the resump- 
 tion act taken in connection with these provisions of the Revised 
 Statutes would seem to be, that the redemption of the U. S. 
 notes under this act does not prevent the Secretary of the Treas- 
 ury from using them as money, and keeping them in circulation. 
 This provision for the redemption of greenbacks by the Govern- 
 ment, is to be construed like that which requires each National 
 bank to select a bank " in the city of New York, at which it will 
 redeem its circulating notes at par." The object of the redemp- 
 tion, is not to stop the circulation of the paper, but to preserve 
 its credit, and make it circulate more freely. This is evidently 
 the construction adopted by the Secretary of the Treasury, and 
 upon which he is preparing to act, on, and after the ist of 
 January, 1879, as we learn from his speech recently made at 
 Marion. 
 
 The language of the ist section, which applies to and provides 
 for the redemption of " fractional currency " is such, that, although 
 the word "redemption " is used, the obvious meaning is, that the 
 fractional currency shall be taken up with the silver change, or 
 subsidiary coin. No man can doubt the meaning, who reads it. 
 The process of redemption is to go on, ' ' until the whole amount 
 of such fractional currency outstanding shall be redeemed." The 
 plain implication is that there shall be none left outstanding. 
 
 The same may be said of the use of the term ' ' redemption 
 of United States notes'* in connection with the increase of bank 
 circulation in the 3d section of the same act, till the total is re- 
 duced to $300,000,000. Here there can be no doubt, because 
 "the reduction" of the volume of greenbacks is expressly pro- 
 vided for, and the limit of reduction is fixed at $300,000,000. 
 The provision for redemption on the ist January, 1879, does 
 not require any reduction of the greenback currency. 
 
 By the act of April 12, 1866.. (14 Sts. U. S. 32. c. 39. 52.) 
 the Secretary of the Treasury was authorized to receive United 
 States notes for bonds, " provided, that of United States notes not 
 more than ten millions of dollars may be retired and cancelled 
 within six months from the passage of this act, and thereafter, 
 not more than four millions in any month." This power, was 
 e. ercised till $44,000,000 were taken up. But they were not 
 destroyed. The proviso impliedly authorized the "cancellation" 
 of four millions per month: There is no provision for cancella- 
 
MODUS OPERANDI OF RESUMPTION. 39 
 
 tion, or retirement of the United States notes, in the clause of the 
 act of 1875 for the redemption of United States notes presented 
 in New York. The $44,000,000 thus redeemed were not can- 
 celled, however, but remained in the Treasury till 1873, when 
 the panic swept over the country like a tornado. The Secretary 
 of the Treasury, then, re-issued $26,000,000 of the $44,000,000 
 so redeemed. 
 
 The objection that such a re-issue of the United States notes 
 redeemed after January 1st, 1879, would be forbidden by the 
 constitution, is obviated by considering the limit of that object- 
 ion, as expressed by the judges of the Supreme Court in deciding 
 the question of the validity of the legal tender notes to pay debts. 
 The objection was not, that Congress could not make a paper 
 currency, but that it could not constitutionally make such a cur 
 rencyalegal tender to pay pre-existing debts, excepting in case of 
 an overwhelming emergency such as was our civil war ; and the 
 reason of the objection was, that it was compelling creditors to 
 accept in payment, a currency less valuable than that contemp- 
 lated by the contract, viz : irredeemable paper. Now, the con- 
 tinuance of the use of a paper currency which has long been in 
 use, stands on entirely different ground, and the objection will 
 not lie, unless Congress should attempt to increase the volume 
 of that currency, by new issues, so as to diminish its value. In 
 that event, the constitutional objection would arise, to any such 
 new issue. But the law as existing, contemplates the volume of 
 greenbacks as a currency provided by congress, expressly limi- 
 ted to $400,000,000, reducible to $300,000,000 on the issue of 
 bank paper, as provided by the resumption act. But there is 
 still another answer to the suggestion of unconstitutionally, 
 viz : that this paper will be always convertible into coin. 
 
 While the Government might not to be compelled by the law 
 as it stands, to re-issue all notes redeemed in New York, any- 
 more than it would be compelled to re-issue all notes which may 
 be returned to the treasury by payment of taxes or otherwise, it 
 will be authorized to regard them as legitimate currency, and 
 to use them as such. 
 
 The Secretary of the Treasury makes no allusion to th< 
 monetization of the silver dollar. He took the law as it stun 
 But this measure of remonetization will greatly facilitate the re- 
 demption which the law requires. 
 
4O MODUS OPEKANDI OF RESUMPTION. 
 
 Allow me now to suggest a modus operandi, or manner in which 
 this plan can be carried into effect. 
 
 1st. Congress should remonetize the old silver dollar contain- 
 m g 37 l V g^ins of pure silver. There is already a law for casting 
 bars of silver, and of gold, with the government stamp thereon 
 showing their weight and value. It is not probable that there 
 will be any effectual opposition to this, or some equivalent measure. 
 
 2nd. Let the Secretary of the Treasury go on with the sale 
 of the United States Bonds, for both gold and silver. Let him 
 not fail to accumulate from $100,000,000 to $200,000,000 in 
 silver, in addition to the $50,000,000 already required by law for 
 subsidiary coinage. Let him also go on with his accumulation 
 of gold of which he already has more than $120,000,000. 
 
 On or before Jan. 1st, 1879, ^ et a sufficient amount of coin be 
 placed in the Office of the Assistant Treasurer of the United 
 States in New York, to redeem all the U. S. notes which may be 
 presented, as the law requires. Such notes will be put immediate- 
 ly into circulation again, if the Government shall have occasion 
 to use them, in the same manner, as a bank re-issues its notes 
 which have been presented for redemption, thus in all probabili- 
 ty, keeping the greenback circulation nearly, and perhaps quite 
 as large as it is at the present time, and far more useful, as it 
 would be convertible, and therefore always equal to gold and 
 silver. This is undoubtedly practicable. The Government can 
 and ought to do it, and I cannot doubt that it intends to do it, 
 and is willing, and waiting to do it. We may fairly infer this, 
 from the declarations of the Secretary of the Treasury, in the 
 speech to which I have referred. 
 
 We are now prepared to understand the real difference be- 
 tween the policy of the Democratic party, and that of the re- 
 publican Administration, on the all important question of what is 
 to be done with the greenbacks. 
 
 The Democratic party would keep them irredeemable. The 
 Republican will make them always convertible into silver and 
 gold, than which no better currency for the business man, the 
 working man, or the capitalist, can be imagined. This paper will 
 be equal to gold. The Treasury will be so fortified with the pre- 
 cious metals as to be impregnable, and its known ability to 
 meet all demands for coin will, ordinarily, leave no motive in 
 the holders of greenbacks to present them. The reserve which 
 
MODUS OPERANPI OF RESUMPTION. 4! 
 
 the National Banks hold in greenbacks will be equivalent to 
 coin, and the banks will be able to supply themselves with coin 
 as easily as with paper. 
 
 Capital will go into business enterprises, without fear of loss 
 by depreciation of the currency. Enterprizing business men 
 will not fear to effect loans for the purpose of commencing, or 
 carrying on manufacturing establishments, because the currency 
 which they borrow will be as good as the currency which they 
 will have to pay. The waives of labor and the interest on capital 
 will be paid in the same kind of money, and not as hitherto, in 
 gold to the bond holder, and in depreciated paper to the working 
 man. I maintain, that this policy will produce the grand confi- 
 dence, which is necessary to carry forward the business of the 
 country, encourage every kind of industry, and give profitable 
 employment to all who are willing to work. 
 
 Of the practicability of making the United States notes redeem- 
 able as we propose, there is no good reason to doubt. The Sec- 
 retary of the Treasury expresses entire confidence of success, and 
 that without reference to the aid to come from silver. But there 
 is a felicity in the accumulation of silver at the present time, 
 which could not under other circumstances exist. Nothing 
 could be safer than for the government to hoard silver, as soon as 
 it shall be re-monetized. It is about 10 per cent, below par- 
 However it might be with others, it is sure to be a profitable in- 
 vestment for the United States. The government will have use 
 for all it can get, at par. I am glad to observe, that the govern- 
 ment is now buying silver bars, by the million of ounces. This, 
 I suppose is in pursuance of the law authorizing the purchase of 
 $50,000,000 of silver for subsidiary coinage. There is also power 
 to coin the trade dollar with 378 grains of pure, and 420 grains 
 of standard silver, intended for use in Asia. I presume, that 
 the government will see to it, that no more bullion, whether of 
 silver or of gold shall go from our mines to Europe. 
 
 Our silver will facilitate our trade with the Asiatic markets^ 
 and may enable us to compete successfully in that great field, 
 with England. We need have no fear of accumulating too much 
 of that metal. The result will be that our silver coin will be as 
 valuable as our gold, and that we can pay the bonds as easily in 
 gold as in silver. 
 
 There is reason to suppose that the growth and renewed activ- 
 ness of the business of the country, and its commerce aided by 
 
42 MODUS OPERANDI OF RESUMPTION. 
 
 resumption, may furnish employment for a volume of currency as 
 large as we now have. At any rate, what with coin which will 
 be largely in circulation, the Greenbacks which will not be can- 
 celled, and the paper of the National banks, there can, and will be 
 no failure in the supply of currency for the wants of trade, and 
 the encouragement of every useful enterprize. 
 
 I have no doubt that the present policy of the administration 
 is, to keep the greenbacks in circulation. The capacity of the 
 country is probably equal to the employment of so much cur- 
 rency. The advantage of the policy will be that the currency 
 will be elastic, and will expand or contract to meet the just 
 demands of healthful trade. Coin will be in circulation, and 
 will come as it is needed. The banks too, will issue currency 
 as it shall be needed. There would be danger of greater ex- 
 pansion than would be wholesome, but for the universal test of 
 redeemability in coin. While that quality remains, our currency 
 will not be for any considerable time, disproportioned to the 
 reasonable demands of our trade and capital. 
 
 With the present immense agricultural products of this coun- 
 try, with the products of our mines of gold and of silver, of cop- 
 per and of iron, with our varied and vast manufactures which 
 have been reasonably fostered only by the republican party, and 
 which have employed and still employ armies of workmen, and 
 with the large balance of trade with foreign countries in our fa- 
 vor, a balance which by the short crops and the long war in 
 Europe is sure to increase, specie payments will be reached, not 
 only without shock to business, but with universal encourage- 
 ment, and with actual exhilaration of industry and enterprize. 
 
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