Mr. MORRILL. Mr. Chairman, so many schemes are afloat here that the public judgment is bewildered sometimes one for the immediate retirement of compound interest notes; sometimes for the substitution of U.S. notes for compound interest notes and all other obligations of the U.S. falling due; and sometimes for the substitution of U.S. notes in lieu of those now furnished by the national banking associations but whatever the merits of these asso ciations, as an original question, I must say that I should regard a measure to wind them up and the issue of an equal volume of currency by the U.S. as tantamount to a perpetual suspension of specie payments. This instability, the ever recurring proposals of change in measures affecting and disturbin the whole interests of the country, is a vice o most deplorable magnitude, and which we as legislators should unremittingly labor to limit. Mr. Chairman, much needless disputation is avoided by a precise definition and limitation of the terms employed to express propositions. If those who advocate specie payments and those who favor paper money would fix accurate bounds to the meaning of their words they might be found apart, but not so far apart as they themselves suppose. Those who are for resumption do not mean forthwith, and those who are against it do not mean non-resumption forever. Jet them explain their positions and they would be nearer together than they now are; but while they indulge in loose talk they are as wide asunder as the poles. It is true, resumption of specie payments by the Government cannot be obtained until there is some curtailment in the circulation of the legal tender notes, say $200,000,000, nor perhaps until by stiffening the tariff we check the outgoing of California gold. But when resumption does occur it will at once unlock a large amount of specie hitherto withdrawn from circulation, and, prices being also reduced, a less amount of currency will be required. No disastrous effects need follow if the people and the SecyTreasury only exercise a common prudence. All expect the country to face resumption at some time; and it is after all but a question as to what time will be the best and productive of the least amount of inconvenience. The men who have faith in the resurrection of gold and silver say we shall never have a better time than now. Those who have felt the fructifying effect of a flood of paper money its 1st glow of expanding prices and its quiet mode of scaling debts believe its potency inexhaustible, and demand that the flood shall never subside. For my own part, I am persuaded if we start now we shall not reach the goal of resumption any earlier than the most devoted patrons of an exclusively paper money system would wish. In a season when prices have universally risen it is a matter of congratulation that the value of man has risen most of all. Skilled labor the hand guided by educated brains and a free will is appreciated. The world begins to find room for all her children, and never will good and willing workmen be forced to beg for employment. Whether paid in paper or gold, the wages of man the world over will rule higher for every slave that has been emancipated. On the return of specie payments the rank of labor will be more than relatively main tained. Finance seems to be a subject which in.all men, and each one is persuaded of the infallibility of his own gospel. The financial condition of no nation or individual is ever so sound that it may not be improved; and if admitted to be unsound the volunteer doctors and the wet and dry nurses, painfully prolific, propose remedies more to be dreaded oany malady. It is curious, too, to observe what progress is made in the science of {. wealth. standards are no longer authority, and 2 and 2 no longer make 4. To appreciate this progress one must turn his back upon Franklin and Hamilton and Gallatin. They believed that labor created wealth and that the public debt could be paid only by proper taxation. The new school, however, trust much to the miraculous efficacy of paper currency. Hand in hand with that, the laborer is taught that he can earn as much in 6 hours as he once earned in ten or 12, or that if he is worthy of the age he need not work at all. Again, that with this invention diligently used taxation, always a great bore, may be handed over to posterity or any party who likes it. I regret that I have no such pleasing theories and no such delusive nostrums. have no dream that we can add to the wealth of the country by any contrivance unaccompanied by honest labor, nor that we can long maintain public credit without taxes or by faith without works. Let us rather strive to give to labor its largest constant remuneration, and equally strive to sustain the Government by the small est amount of taxation. While some of the ablest intellects in France and England are seeking a road by which to escape the evils the losses and hazards of even a mixed currency, while they are be coming bullionists fure and simple, we have some men who should be statesmen studying schemes, by which to perpetuate the prodigal use of that Government paper which was engendered by a gigantic war. A speech on financial questions, bestudded with facts and figures, I know possesses few attractions compared with the many immediate and remote problems that arise on the great topic of reconstruction, and yet the subject is now one of even more pressing importance. If the sinners of the South can afford to delay repentance, we can afford to wait. I shall not ask anyone here to adopt my arguments, which may be poor, but the facts presented I hope may have more to recommend them. ever was it more important than now that we should fix our tax and revenue system upon a stable basis to stand for a series of years but, if our political condition did not forbid this, the unfunded national debt, and, above all, the immense volume of national bank and legal tender currency, will not permit it. Ere this we ought to have been sailing on smooth. seas; but beyond some palpable rocks, which may be avoided if we choose, what unexplored dangers lie in our path it is almost impossible to foretell, and yet all contingencies must be provided for. Our destiny is to be a great and powerful nation, or, if not that, then to follow in the long procession of extinct republics. There can be no middle ground. The U.S. must be a grand Power among the nations of the earth or nothing. The 1st sign of exhaustion, the 1st stumble of decrepitude, will be the signal for all of our foes to unite in crushing out our national existence. We must not forget in finding cruel enemies at home we also have been furnished with superabundant evidence that those who govern foreign nations are by no means our friends, but on the contrary they have exhibited a savage joy at every blow which made “freedom shriek” or retarded the triumph of the principles and supporters of a republican Government. Earnestly seeking peace, and believing honorable peace possible, we yet may be flirted into war. We may be assailed, and thus be called upon to defend ourselves with all our might. If our financial condition is only sound we can easily bear the strain; but until we have our debts solidly funded, until they are held where they will not leap into the market and crush all domestic credits at the 1st croakings of alarm, an addition of another 1,000 millions of debt is to be avoided. A war to be supported by an inflated currency is devoutly to be shunned. I do not like the idea of being under perpetual bonds to keep the peace, and therefore it is our highest"duty to insist, 1st and everywhere, on rigid economy; and 2nd, to restore our finances to the normal condition to the specie standard at the earliest practicable moment. Producing more gold and silver than all the rest of the world, let us not endure the reproach that we do not know how to keep it after we have got it. Able to bring into the field the mightiest of armies, let us also be equally strong in our means of in definite and independent support. Let any who may seek a war with us know from the outset that it will be one commensurate with our physical and geographical Poion and in no way inferior to our past history. We must look at the sober facts before us. The inevitable expenses of the Government must be provided for. The interest on our public debt is estimated next year at $105, 551,512, and, unless the perpetual paper propagandists shall prevail, upon the final redemption of the legal tender currency this will be ultimately increased about 20 or 25 million dollars, or in the aggregate more than our whole public debt in 1816, when it reached the high est point ($127, 334, 993) prior to the recent rebellion. Qur Navy has been very largely increased, and it is not probabfo that it will ever shrink to its former narrow proportions. In this Dept our orswill be $23, 144, 810 31, or nearly twice as much as before the war. The regular Army is now fixed at about 54,000 men, but we have to provide for nearly 90,000 for the coming year; 8,000 or 18,000 are forever obsolete; and it must be kept capable of instant and formidable expansion. estimated cost for the War Dept the coming year is $58, 804, 657 05. The extra bounty we provided for last year will amount to $80,000,000, all of which is yet to be paid. The pension appropriation, instead of covering a few heroes of 100 years as well as of the Revolution, and 5 or 6,000 scarred soldiers of the war of 1812 and 1847, now embraces young men, but mutilated in service, in every city, town, and village, to the extent of nearly 125,000; and instead of less than a million dollars, as in 1862, now requires $13, 177, 445, or as much as the whole expenses of the Government in 1824 and 1828. The war claims of several States, if that of Missouri, already reported upon at $7,000,000, may be regarded as a foretaste, will weigh heavily upon the Treasury. The Indians, though reduced in numbers since the advent of the Pilgrim fathers from not less than 15 millions to 295,774, maintain their nomadic and in tractable character, requiring for each a mile square of territory for support where a white man would need but a few acres, and beyond this an annual and perpetual expenditure of $3, 500,000 more, which does not include the large and variable sums it costs us out of the military chest to bestow upon them, for various provoked and unprovoked offenses, that Christian chastisement which the agents and traders who snatch and devour our amiable charities, think they need. Last year 7, 909 Navajoes were held by us as prisoners in NewMexico at an expense of $1,500,000. The Freedmen's Bureau, in proportion to its value and importance the most economical expenditure of the government, will cost for the coming year $10, 350, 265 55; but it has an unexpended fund on hand of 2/3rds of this amount. The elevation of the Indian may be hopeless: but fortunately the improvement of 5 millions of the African race is a possibility abundantly' assured. With the most inflexible economy, without any guarantee that the Halls of Mon tezuma shall have restored the gold abstracted by Cortez, or without the indulgence of any other splendid folly, our entire expenditures for all purposes cannot be brought down to anything like the old standard of 60 or 70 millions per annum. Heavy taxation is at present unavoidable; but this will every year be sensibly diminished by increased wealth and increased population. Our task, if we are wise, will be at least biennially to relieve something from taxation. European nations, however, ambitious once more to maintain large armies in time of peace, compelled to make lavish expenditures for the maintenance of the balance of power, will annually have to seek some new object of taxation upon which new burdens may be imposed. An unusual item, however, is this year to be provided for by the people, not by the Government, which will transfer a large sum from the U.S. to Europe. The Paris Exhibition will attract Americans, ever addicted to travel, by1,000s, and there is some ground for the satire conveyed in the pretended cable dispatch, 4hat Napoleon has set apart 4 acres as a grave yard for American visitors who may not survive. It will be a very moderate estimate to calculate that 75,000 persons will this year cross the Atlantic from the U.S., and the cost will not be less than $1,500 each in gold, or a total of $112, 500,000, which in currency would be over $150,000,000. Some will estimate the number much higher and the expenditures greater. It will hardly be less. This will swallow up the entire production of all our gold and silver mines for the year to come, or, what is more likely, its equivalent in U.S. bonds, to be disposed of as the exigencies of individuals may require. such a drain may be ill timed, but there is no escape from it. For the present our lesson as a nation is economy, rest, abstinence. Hereafter we may revenge our selves by calling a world's convention at StLouis or upon the summit of the Rocky mountains. I know that excellent men entertain much affection for paper money, although no one at the time of its recent introduction dreamed of its present overgrown proportions, nor of using it beyond the immediate war exigencies of the Government. Its use, justified only by an over whelming necessity, was to be terminated with the 1st dawn of peace. I confess to a feeling almost of mortification in having the conviction that this question requires sober argument before an American Congress. How any friend of American industry can espouse the cause of an endless reign of paper currency, of which it takes one dollar o 30, 40, or 50 cents to buy a dollar in specie, is to me incomprehensible. Iron ships are rapidly coming into use, but they can be built abroad and employed for 1/2 the price they cost here. Will any American build an iron ship? Tenements for rent, unless already built, are no longer favor. ite investments for men having capital, and no oor man dares for a moment to indulge the idea of building a house and a home. Although all other circumstances, save only our depreciated currency, indicate a disposition and war rant in all parts of our country, North and South, East and West, to start new industrial enterprises, yet few such are actually started. Men will not invest expecting 5 years hence to lose 1/2 of the sum. Some gentlemen think that the premium on gold paid by the importers is ample compensation for all the griefs of American manufacturers. Never was there a greater fallacy. When the wants of the Government created both a demand and war prices for goods; when it was easier to sell than it was to buy; before labor and raw materials had advanced to the same ratio or beyond that of gold, then manufacturers were reaping princely harvests from the rise of raw materials and stocks on hand. All that is changed. Now raw material has been consumed and labor has advanced, but prices of finished manufactures have receded and are still receding. Many mills have already suspended, and others are working on short time. Certainly to embark in any new enter prise is deemed hazardous. Neither the great attractions of the West nor of the South can overcome the dreaded longevity of the race of “greenbacks.” The bare difference in the cost of the permanent capital of English woolen manufacturing establishments and American to the English the mastery and ample dividends. 6 years ago a woolen mill that would have cost $1,000,000 in NewYork or NewEngland could have been put up so much cheaper are raw materials and labor for $500,000 in England. Permanent investments there which yield 3 and a half%. per annum are satisfactory. Here7%. per annum is the least that would tempt capital to such enterprises, or that would anywhere be voluntarily accepted. Today the prices of bricks, iron, machinery, and labor have so largely increased that such an establishment would here cost nearly double what it would 6 years ago, or $2,000,000. The interest upon this sum would be $140,000 per annum; but the interest of the British establishment $500,000 at 3 and a half% is no more than $17, 500. Here is $122, 500 per an num in favor of the British manufacturer, a sum sufficient for very respectable dividends, certainly, on a capital of $500,000. Is it any wonder that we have an extraordinary influx of British goods, or that all Europe last year was swept to furnish the empty American markets? Prior to the war the cost of the labor expended upon a yard of cotton cloth (64×64 printing) was 9 mills, but now it is 2 cents and 7 mills or 3 times the amount. A printer in Washington now gets 24 dollars per week and works but 8 hours per day, where he formerly received 14 dollars per week and worked ten hours per day; in? yet he will tell you that his condition and means to support a family have not been bettered. A ton of English railroad iron in Wales is now sold for 5 10s or $27 50; but it is estimated that the wages alone paid to workmen in Pennsylvania to produce a ton of rails amounts to 65 dollars, and of this a careful analysis shows $35 28 to be expended by them for agricultural productions. In spite of the high rates of the figures the laborer enjoys no more comforts than formerly. Our paper currency represents dimensions without gravity and its perpetuation must prove destructive to both employees and employers. I am no defender of the polities of the SecyTreasury. They have been and are as distasteful to me as to any of my friends. He is not, however, the 1st man who has sought distinction in a rôle for which he was unfitted. The author of Blackstone's Commentaries sought parliamentary position to increase his fame, but there his career is only remembered because Junius pointed at him his “slow, unmoving finger of scorn.” John Quincy Adams was not always satisfied in the high career of a statesman, but sometimes attempted poetry, and “Dermot McMorrogh” was the result. The political sins of the Secretary are patent, but according to Burns “we know not what has been resisted.” Should we drive hini from position, is it likely that any successor would have more of the confidence of the country? His recommendations, so far as I am concerned, shall not be condemned because made by him, only scrutinized. I do not think it will be very wise for Congress to get wrong on financial questions because the Secretary happens to be right, though wrong politically. For myself I shall not make the mistake of opposing him where my conscience assures me he is mainly sound and true. although I think he has named a day for the resumption of specie payments somewhat ear lier than it will be possible to achieve, yet the unalterable purpose to resume at an early day I have no doubt is sound in principle, policy, and morals, and if Congress shall thwart this purpose it will have doomed the country to long years of suffering. More than this: any party which shall undertake seriously to procrastinate the day of our redemption from the evils of an excessive paper currency, the evil of dear living, will at last be overwhelmed by its opponents, even though the latter may not be able at the time to extricate the country. Strong as we are we cannnot afford to take the wrong side of such an issue. On the 11th day of May, 1865, the premium on gold had fallen to 120 8 and a half%., having fallen from 200%. in March, and from a much higher point than that in January without producing a perceptible ripple in financial circles and far less a panic. There were 2733 failures in 1860 in the U.S., amounting to $61, 739, 473; but in 1865 there were only 5 30, amounting to $17,625,000, or about one 4th part of the average number and amount. Mortgages, made light, had been liquidated. The old system of mer cantile credits by common consent had been banished. The South in losing all had lost its credit, and trust in that direction was impossible. All felt that to pay as you go was sound policy. The scriptural injunction “owe no iman anything” had been implicitly obeyed, and then was the golden moment, not only for political reconstruction, but for a return to specie payments. Then the capital of the country was idle and might have been largely enlisted into the service of the country. The campaign of a paper currency was over, and it waited only to be honorably discharged. useful once, it was now only an incumbrance. The western States prior to the war were largely involved in debt, and they not only paid off an indebtedness of not less than $200,000,000, but they became large holders of U.S. securities with means of becoming still larger holders. Up to this time neither in the West nor in any other part of the country have our people asked or received the ancient measure of credits. Notwithstanding the drain of the war the great masses of the people are free from debt. Thanks at least, to the SecyTreasury for having borne aloft the motto of an early resumption of specie payments. This, if no more, has prevented the country from an indefinite expansion of credits, from plunging headlong into debt; and never, in my opinion, shall we have a more auspicious moment to initiate measures for a vigorous retirement of the excess of our paper currency. I wish I could believe that the estimates of the receipts from customs for the years 1867–68 were not too large, but I cannot, and instead of $145,000,000 if we get less by $20,000,000 it ought to content and be satisfactory to the country. The capacity of the South to consume and pay for immense importations has been vastly overrated, and the lake trade alone Pool. much exceeds the entire oof the southern trade recently restored. The prompt action so generally expected upon the tariff bill now pending in the Senate, by which the rates of duties would be somewhat increased, for a time greatly stim ulated importations, and we have had both a giut of merchandise and of revenue by no means to be anticipated for the coming year. It is most likely the SecyTreas: ury has underestimated the amount of U.S. bonds held abroad, and that instead of $350,000,000 not less than $500,000,000 of our national securities are so held. So long as these remain below parabroad they will be held more or less as fancy stocks, liable to be returned for realization at any moment. If they could be made equal to par, it does not seem to me that the holders would part with a security for which they were receiving 6%. interest in order to accept another no better at 3 and a half%. interest. Beyond a question when our bonds bring what t hey.represent, dollar for dollar, a new loan abroad could be negotiated, if it were esirable, at 5% and perhaps at 4 and a half%. We shall ere long demonstrate that it is safer to trust the U.S. at 3 and a half%. than any other nation in the world, but 1st we must make our }. obligations worth their parvalIue in gold at home. wish it were true that the stocks of the U.S. were not to be found at all in foreign markets; but we are not rich enough to hold all the good things we produce. Is it not, however, a source of mortification that iMnassachusetts 5% stock brings more London than U.S. 6es? Or that Virginia 5% s bring only 20%. less? Are we quite content that Egyp tian, (quoted at 84,) Turkish, (98,) Brazilian, (93,) and even Moorish, (93,) stocks shall be uoted much higher than the best of U.S. stocks? Some of these loans at 4%., of Governments greatly inferior, as we think, to that of the U.S., brin higher prices than our 6%. loans. do not wish swiftly to put large profits in the pockets of our creditors, but those who obtained our stocks at less than parmade their profits at the time of purchase, as it was to have been expected the Government would pay to the uttermost farthing all it promised, principal and interest, and those who relied." the good faith of our Government, or who may hereafter so rely, will never receive less. No other Government has met its obligations with more punctuality. If slowly, the world will surely yet acknowledge the fact. But our creditors are receiving 8 or 9%. while gold commands its present rate of premium.. On $2,000,000 of debt this profit of our creditors amounts to over 40 millions per annum. The problem of how much currency or cir culating medium any country requires for the healthful transaction of its business is one having so many points of disturbance that its actual solution is one of some difficulty. Each examiner will vary the result according to the data included or excluded, and probably according to the theory he wishes to build up or demolish. I propose to present some facts upon this sub}. that to me seem important, and to which invite the consideration of the House. The entire amount of bank note circulation of the whole country in January, 1862, was $184,000,000, and of this $40,000,000 belonged to the southern States. The maximum amount of bank note circulation at no previous time has gone beyond $214, 778, 822, and the circulation in 1860 was $207, 802,000, and that was a year of as large production and of as much general prosperity as any perhaps in our history. To the amount of paper there must be added a small amount for specie in daily circulation. Doubtless there was $200,000,000 of specie in the country, but that held by banks is represented by paper, an equal amount of which is usually retired whenever specie is demanded and temporarily brought into use. A considerable amount, as there ever will be, was hoarded or in transitu as merchandise. The business of the country was not larger in 1866, certainly, than it was in 1860, except in national taxes, and these unquestionably create a demand for some increase of the circulating medium, and as unquestionably to some extent diminish the business of the country. It is a great convenience, however, that the medium should be of a national character and current in all parts of the country. With what propriety can it be claimed that the business of the country requires the vast volume of paper currency which now inundates the land? Let us look at it: Paper currencynow in circulation, (December 1, 1866.) Notes of State banks. $36, 785,03050 Nootuetsstaonf dSintagt.e. banks converted.now 9, 748,02500 U.S. notes, legal tender. 385, 441, 84090 Fractional currency. 28, 620, 24993 Circulation issued to national banks. 292, 671, 73030 753.266, 91913 In 1862 the circulation of bank notes of the southern States was $40,000,000, and was at the outset of the rebellion much increased; but the confederate currency was subsequently largely substituted for it, and the amountnow outstanding certainly does not exceed that sum, and its chief value lies in the fact that the creditors of the banks can use it to pay their debts. I shall not bring the $1,000,000,000 of Jeff. Davis's king cotton currency into the account. That, in “swinging around the circle, ” seems to have been condemned and executed even before its authors. West of the Rocky mountains, on the Pacific slope, gold and silver has maintained its sovereignty and very little paper has got into cir culation. The amount of gold and silver coin is probably considerably greater there today than it was 6 years ago, and may be estimated in all the States and Territories at $25,000,000. Throughout the country, and particularly where merchandise is distributed at wholesale, there are many articles bought and sold exclusively for gold, and no other prices are quoted for them. instead of coin, gold bars or bullion is very largely used by banks and by importers to pay for foreign merchandise. These circumstances keep some small portion of the gold coinage from being wholly demonetized. The copper and nickel coinage has been depreciated so that a 5 cent token contains about one cent of real value, or until it is almost as light as any paper which can be produced, even by the genius of the hydrostatic power at the Treasury Dept, and it once more rises and floats triumphantly over the dirty sea of paper currency in vulgar fractions. The gold certificates of deposit, issued by millions, help to swell our circulation, being conveniently and daily used for many purposes, especially to pay for exchange in the liquidation of foreign accounts and among gold operators. Bills of exchange are in fact currency, and the amount afloat is enormous. The compound interest notes are largely used, and almost universally, though without authority, take the place of U.S. legal tender notes in the reserve required to be held by national banks. Even the 7 thirties often take the place of lawful money, and are given and taken in financial transactions at their current value. To some extent the coupon bonds of the U.S. are used as money and are remitted to pay balances due, especially balances of trade due abroad. To the circulation alreadymentioned, it is fair, then, to add the most considerable part of the following items: Gold certificates of deposit. $19, 636, 500 Compound interest notes. 147, 387, 140 Specie in actual circulation on the Pacific 25,000,000 Speciein actual circulation in States the atlantic 5,000,000 Copper and nickel. 3,000,000 $210,023, 640 This, added to the 1st series of items, makes the whole of our present currency $963, 290, 551 93, or in onumbers nearly 1,000 million dollars, to do actually less business than we were doing 6 years ago, when we did not have nor require one 4th part of the sum ! The 4 millions per month of Government aper authorized to be. retired last year has more than compensated by the increase of national bank paper, and paper curreney, therefore, still maintains its supremest bulk. We produce of gold and silver $8,000,000 per month, and yet higgle about retiring within the same time $4,000,000 of paper. The amount of notes authorized to be issued by the Bank of England is 11,000,000, or $55,000,000; and the entire amount of paper cir culation in GreatBritain, including private and joint stock banks, as.; by act of Parliament in 1844, was 37,000,000, or $185,000,000. Some years it has been a trifle more than this and some years a trifle less; but in 1865, strained as they were for capital to buy and hold cotton at its advanced price, the amount did not go beyond 39, 129, 789. Be yond doubt the trade and commerce of GreatBritain vastly exceeds that of our own or any other nation. Its exports in 1864 were $2, 545,000,000, and yet they find $185,000,000 of pa. }. money equal to all their ordinary demands. how is it that it can be pretended we require so "muchmore? During the war it was claimed that.he enormous transactions of the Government absorbed 100s of millions, and doubtless the money paid to our armies in distant fields did not find its way to commercial centers as quickly as it would if it had flowed through the ordinary channels of trade; but the Government changed business, did not increase it, and if it did, the war has ceased and the government is no longer the grand purchaser and consumer of everything upon which it can lay its hands. It is an absurdity to suppose that we require 5 times as much paper money as GreatBritain to do less than half as much business. But the facilities now in use for the transaction of business by houses engaged in large operations, outside of the use of money of any kind, although known, are generally vastly underrated. A member of Parliament recently declared that it required no more currency to do the business. GreatBritain now than it did 20 years ago, when the business was only half as large. There will be found in one of the parliament. ary reports of 1858 (Evid., p. 165) the testimony given by Mr. Slater, a member of a firm in London largely engaged in commercial transactions, ranging over several millions sterling yearly, which showed that their receipts and payments in the ordinary cour e of business, when carefully analyzed, held the following ratio for 100 parts: Receipts. Bank of England notes. Gold and silver. Bankers' drafts and chec Total. 7%. 3%. 90%. 100%. Payments. Bank of England notes 2%. Gold and silver. 1%. Bills of exchangeand chec 97%. Total. The business of this firm was analogous to that of any of our large merchants or traders in NewYork, and proves conclusively that the credit and capital of the people are used to the extent of 90 to 97%. in ordinary mercantile transactions, and that neither gold and silver nor paper convert ible into o and silver is used for a circulating medium beyond from 3 to. ten%. fact is strikingly illustrated by the NewYork bank exchanges or money transactions for a single day; for example, take one in the year 1863, amounting to $91, 291, 431, which was performed by the use of $2, 807, 396 in money. n the year 1854 the bank exehanges were $5, 862, 912,098, and the balances or money used daily were under one million dollars. For this data I am indebted to a former eminent member of this House, (Colonel Stebbins.) This experience of NewYork tallies very closely with the testimony in the parliamentary report, that it only requires about 3%. in money to liquidate all payments in modern trading. If it were not mischievous it would be ridiculous to claim that there is a necessity for the continuance of our present excessive amount of paper money. Mr. Charles Buller, in the House of Commons, stated that the amount of bank paper in 1834 was between 26 and 27 million pounds, while the amount of bills of exchange in circulation at one time in the same year was 132, 123,000, or 5 times the amount of bank notes. On the 1st day of January, 1866, the whole bank capital of the country amounted to $403,357,346; but a much more active and larger capital was made up of individual deposits, which at the same date amounted to $513, 608, 888. By means of the checks of depositors this may be and is drawn out daily, and by checks of other depositors or other bankable funds an equal amount may be depos ited. At the same time it is perfectly safe for any bank to calculate that at the close of business each day the sum total of the deposits will remain nearly unchanged, and thereby the basis of discounts is very much enlarged. Thus the credit of individuals at the banks plays by far the most important figure in modern financial transactions, and does away with the necessity of a large volume of bank note circulation, besides more than doubling the aggregate working capital of the banks. An unvarying standard of money has been the desideratum of the world, but it has not yet been found. Gold and silver have been almost universally accepted as the nearest approximation to that end, because these metals have great intrinsic value in proportion to weight, and are portable and durable. But a bushel of grain in old and long settled countries has been considered a more unvarying standard of prices than even gold, on the ground that it requires a more uniform amount of labor to produce it. But a uniform standard, however desirable, appears impossible. Labor in one country is worth more than in another, and worth more in cities and towns than in rural districts, because money is there more abundant and purchases less of the absolute necessaries of life. Educated or skilled labor is more valuable than the uneducated, because more productive. Labor is worth more in the spring time and harvest than in winter, notwithstanding it costs the laborer more in clothing, food, and exposure, because in the winter unemployed laborers become abundant’ Agricultural labor being interrupted, many who follow it in its season pursue the trade of artisans during the winter, and thereby depress the prices of such labor in towns and cities. Prairie lands combined with labor saving agricultural implements have reduced the price of grain in the Western States, but the labor to effect distant transportation prevents any very large reduction in the prices which the world at: continues to pay. A day's work in the U.S. may be worth twice as much as in Mexico; but if 1,000 men in the U.S., produce 1,000 ounces of gold or silver for the same amount of labor it requires in Mexico to produce 250 ounces, transportation no longer interferes, and the price in Mexico will fall one half, or it will take twice as much gold or silver to make the same purchase as before. It is to be noted, however, that Chinese labor, being that largely employed in bur mining regions, is quite as cheap as that employed in Mexican mines. In point of fact the surpassing abundance of the precious metals, especially that of gold, discovered within the last 18 years California being already eclipsed by the Colonies of GreatBritain and the facility and cheapness with which they are obtained, has so cheapened the markets of the world that gold itself has rapidly depreciated and nowhere purchases as much as it would in 1850. So copious are the supplies, multiplied suddenly at so many different points on the globe, that it may be expected at an early day to be valued, like any other article, at no more than the cost of extraction. Whether the enormous increase of the precious metals may not ultimately destroy them as a measure of value, as was apprehended upon the 1st opening of the golden treasures of California and Australia, remains, yet to be seen. The extraordinary drain of silver to the Asiatic nations will not forever postpone the question. It seems probable, however, if this drain should continue even for a short time longer that all nations will either abandon the use of silver coins or they must speedily debase them. Otherwise their commercial price so much exceeds the currency value as compared with gold they will be melted up. In 1800 the value of gold produced stood to that of silver in the proportion of 28 to 72 in a total of $54,000,000; but in 1863, when the production had been quintupled, the proportions were nearly reversed, and gold stood as 67 to 33. In fact the increase of silver is small, while gold has quadrupled. Macaulay's NewZealander may. annong other wonders 1000years hence a pound of silver valued at 15 pounds of gold. In 1880 it was estimated that for the preceding 19 years the average annual production of the precious metals had fallen off about $31,000,000 from what it had been prior to that time. Productions Productions before 1810. after 1810. Europe and Asia. $4,000,000 $5,000,000 Woo Archipel. 2rica. 1, America. The amount of gold and bullion in Europe in 1847 was estimated to have been $1, 200,000,000. The accessions to this general stock of gold in the world since haveo: but prior to 1848, for more than 30 years, the annual supplies did not much more than equal the annual waste. I am not able to obtain any consecutive returns of the amount produced in Mexico, South America, Russia, or Africa, and only imperfect returns of what has been produced in the U.S and in Australia, but it is known that productions have been increasing largely, and probably the aggregate annual production in the U.S. alone is now nearly equal to the amount produced by both the U.S and Aus tralia a few years ago. U.S. Australia. Mexico. To these statements should be added from ten to 20%. for what is not reported. Mr. Homans, of the Bankers' Magazine, estimated the production of gold and silver in 1863 as follows: Qalifornia 70,000,000 Other portions of the U.S.. 30,000,000 British Colombia. 6,000,000 Mexico. 25,000,000 South America. 13,000,000 Total, North and South America. 144,000,000 Russia (Europe and Asia). 22,000,000 Other parts of Europe Asia and Africa. Australia. 75 NewZealand and British colonies. 12,000,000 All other countries. 6,000,000127, 575,000. Grand total. $ 27r1,57 5,000 The following is the estimate of M. Chevalier, June, 1866, (see Journal des Economistes.) Silver, fr. Gold, fr. America. These estimates, made up from different sources and from different stand points, serve to prove each other, and beyond doubt are very near the truth. Within the last ten years, for which I have no returns, the very reliable estimates already given for 1863 and 1866 would show that more than treble the amount has been produced than for the 6 years for which I have given the returns. These facts conclusively show, apart from the action of a paper currency, that gold. must have irremediably fallen in intrinsic value. It has become cheap by its abundance. What occurred after the discovery of the silver mines of Potosi in 1545 is again stamping itself upon history. There is, therefore, no occasion for any other depreciation than that which must inevitably befall us on account of the annual addition which has been and will be made to the general stock of gold and silver in oft the for generations yet to come. We keep up mints and assay offices at great expense, but it is clear that on the whole not one 4th part of the sums coined are retained by the country. Of all we have coined, in other words, 3/4ths or more has left the country. The impress of the American eagle gives no patriotism to coin, and it changes its allegiance as did the coins of other nations in past ages, though forbid by Draconian laws whenever oby any interest possibly computable. The following table shows the work of our mints and assay offices since 1st established: Gold coinage is. Silver coinage is Copper coinage.3845, 536, 600 79. 136, 351, 81926 23 55 so Where is it? Most of it has disappeared, rated at the value of the pure metal contained, . not a whit jo" by the artists of the int. Among other modes of reducing the standard value of money, Congress began as early as 1837 by debasing our gold and silver coins, and declared that of 1,000 parts 900 should be of pure metal and 100 parts alloy. The standard of British gold is one part alloy in every 12; but we have no coins which are not debased at least one part in every ten. At that time gold could be more profitably exported than silver, and this measure was designed not only to make the legal value of the 2 equivalent to their relative commercial value, but to bring gold into more general circulation. Neither object was secured. The rates of value, of 15 or 16 to one, soon became obsolete, and gold coins, although the standard was purposel placed below that of silver, were still exported. order to retain in the country any silver, which, being worth more than its legal tender value, bore a premium and was sold as a commodity, it then became necessary to reduce the weight of the silver coinage, and the half dollar in 1853 was reduced from 2six and a quarter grains to 192 grains, and fractional parts to the same proportion. Silver dollars at once disappeared, and eagles bearing date prior to 1837, being worth in proportion to the new eagles $10 66, also disappeared. The weight of these in 1791, standard gold, was 270 grains, but in 1837 they were reduced to 258 grains. The debasement of our coinage, never entirely pure, was thus about7%. Foreign coins, beyond our power to debase, circulation. have been of course permitted to be rated at an increased valuation. The pound sterling of GreatBritain, or sovereign, was made a lawful tender in 1794 at $4 44, and in 1842 it was raised to $4 84 being an increase of over ninIet wpeilrl cent. be seen from this recital that the standard of the U.S. coinage is very low, and the normal condition of exchange with most other civilized nations is always against us. Exchange on London when at not over 9 and a half% is really at par. When our paper money is promptly convertible into specie it is still much below the par of the countries with which we have the largest commercial transactions. Our gold coins are received abroad, not according to the value we stamp upon them, but according to the amount of pure gold they contain. i. would seem almost inexcusable to allow our paper money to remain depreciated below the standard of specie as fixed by ourselves for any period more rotracted than is now imperatively necessary. ank notes, when they are made equivalent to the standard of U.S. coin, will be none too valuable. The 2nd, 3rd, and 4th dilution of money would not be tolerated by even Hahnemann. But the value of anything circulating as money diminishes both, in proportion to its abundance and in proportion to the swiftness with which it changes hands. Holders of what is called money below the standard of the world are always eager to part with it; they never hoard it. They invest it either in something more solid or are happy to be rid of it for even such extravagances as they would feel could not otherwise be afforded. The American people at all times possess a wonderful facility for bargain making, and an abundance of paper money exaggerates this national aptitude. In the U.S. the same sum of money probably changes hand twice as frequently as in England, and in England 3 times more frequently than in France, and in France twice as frequently as in Spain, and in Spain 5 times more frequently than in Russia or Turkey. China and India appear to be Serbonian bogs, where specie once introduced never more comes to the light. It goes and stays there perhaps because it will buy more labor there than elsewhere; it is irrecoverably lost, at all events, to modern commerce. Years ago a high authority laid it down as an axiom: “Given the comparative abundance of money, its market value will vary as the rapidity of the Given the rapidity of its circulation, the market value will vary as its comparative abundance. Given both the quantity and rapidity, its value will vary as the economy in its use.” If this be true, almost any nation would feel the evils of a redundant currency less than that of the U.S., because the rapidity of circulation elsewhere would be generally far more sluggish. The effects of an inflated currency, by creating suddenly a nominal increase of values, has demoralized the nation. Men quit work and buy property for a rise, although the rise may have ceased. The Jew in Boston, who had heard of some parties who made fortunes by failing, shut up his store, although owing nothing, and traveled about all day saying he had failed. Toward night he reopened his store, and said that he had failed ever since 9 o'clock in the morning, and had not made a single cent If the speculators would go back to their proper avocations, like the Jew, it would be all very well; but they will not. Staid men become adventure us, and adventurers become desperate. Haste to be rich fires the brain, and he who has no elephant or no fancy stocks ready to water and dispose of to green friends, is a fossil of a by gone age. Even the unsophisticated representatives of the rural population, attracted by the history of some lucky city gambler, (or “gold opera tor, ” the polite do call it,) rush toward towns and cities, eager for sudden wealth, and are ready to sully character for an unsullied equi page, believing the splendors of an establishment may conceal a shabby soul. The urban population everywhere gain in numbers at the expense of the rural. Town and city rents are fabulously dear, and not even the cholera retards their rise. Hotels are filled, notwithstanding members of Congress from the Pacific find it cheaper to cross the Atlantic and spend the vacation in Europe rather than risk a 4 months' reckoning with an American landlord. Industry, whether agricultural, manufacturing, or mechanical, is no longer attract: ive when fortunes are lost by wise men and are gobbled up by fools. A few may gain what others lose by bold and remorseless speculation; but the masses, trained to legitimate business and to honest labor, are daily growing poorer in pocket while they are daily exposed to deeper ruin by the seductive influences of those who seem to fly to fortune on the expanded wings of a paper currency. Let us set the gold operators and all who follow kindred trades at work in some honest calling. At least we may dry up the fountain from which flows their present means of intoxication. It is a significant fact that our great eras of financial distress have occurred just at the moment when we have had the maximum amount of paper money inflation and when we were at profound peace with all the world. The bank note circulation of the U.S. from Jan uary, 1830, to January, 1837, rose from $61, 324,000 to $149, 185, 890, and then came the financial collapse from which the country did not recover for more than 5 years, or until 1843, when the bank circulation had been reduced to $58, 564,000. In 1857 another period of sharp distress and great embarrassment was experienced throughout the country. At this time the bank note circulation had swollen to the highest point then ever known $214, 778, 822. An excessive rise of the circulation of paper would seem almost as surely to presage a storm in the financial world as the sud den sinking of the mercury in the barometer denotes a violent change in the atmospherical world. Under such circumstances the skillful mariner will trim his canvas so as to weather the rough dangers he may be called upon to pass through. While the war raged we had to run fearful risks, stretching every rag of sail, with our admirals lashed to the masthead, and came off victorious. Now, with all our craft safely in harbor, it would be disgraceful to sink by insisting upon carrying full sail instead of throwing an anchor or by neglecting to trim the ship with proper ballast after being unladen. Thus far we have escaped any commercial tor nadoes, but if we should be visited by such a calamity the usual sequence of war it is too obvious that we are exposed to something of unrecorded severity. Any excess of currency adds nothing to actual values. Calling a dollar a dollar and a half only brings along the necessity for marking up the price of every exchangeable commodity correspondingly. If this were to be done with mathematical exactness nobody would be the gainer or the loser. But our circumstances are peculiar. We know and have faith that every dollar issued by the Government will be actually redeemed and paid, and probably within 5 years. So that anyone can afford on this hypothesis to invest gold in o U.S. notes hold them idle until redeemed for much less than even the present premium on gold, and would probably gain much more than 6%. interest according even to the present rate of discount on legal tenders. o: withstanding that the present inflation of paper ought naturally to carry the price of gold much higher than it now is, this all pervading conviction largely controls the rate of discount. If the public faith on this point should undergo a change and the time. specie resumption appear to be uncertain or postponed, there is no power which could prevent the premium on gold from bounding up to some of its highest altitudes. Let Congress become weak and vacillating and we should soon see our currency as buoyant as soap bubbles and with hardly more purchasing power. During the war, at whatever sacrifice of present comfort, the people back of us conducted themselves and voted like statesmen. Let us not suffer in comparison by an exhibition here of a more contracted vision when the light is more abun dant. The ratio between gold and paper is not the true one. Producing a large surplus of gold, it naturally is and forever will be cheaper here than elsewhere. But we have depressed it by making it a commodity which we are obliged to sell for what the world will give. We can spare it more readily than anything else. The Government requires gold to be paid at the customhouse and it pays out an equal amount at the sub Treasury. That is the inflexible and perpetual measure of our wants. Beyond this neither Government nor people have any use for it. Banks have long since removed it from their vaults. It is the cheapest thing we have to scll. So long as this continues we are maintaining the paper system to the great advantage of foreign nations and to our own loss. While it ocontinues we shall be the subjects of foreign and the spoil of gold speculators. Every man's property is at the mercy of the wild waves of an inflated currency. All our experience shows that excessive issues of paper money have been followed by excessive importations of foreign goods. When the struggle with Napoleon was oyer it was not until years later that England resumed specie payments, during which her material progress was comparatively stationery, and her magnificent strides in trade and commerce bear date subsequent to this period. When the bank note circulation of the U.S. was so largely expanded in 1836 our imports reached the large sum of $189, 980,035, having risen from $70, 876, 920 in 1830. At the same time our exports of domestic produce were only $106, 916, 680. Again, under like circumstances, in 1857 the imports rose to $360, 890, 141, having been no more than $178, 138, 318 in 1850. At the same periods the excess of specie and bullion exported was very large. The net imports of foreign merchandise the past year, valued in gold, amounted to $417,046, 577, of which over $125,000,000 were in dry goods! The close of the rebellion let loose at high prices a vast amount of cotton; but we exchanged it at once for dress goods. These facts would seem to show that the higher law of trade and commerce exercises a pitiless rigor against those nations which tolerate an excess ive circulation of paper money. It is often said that the U.S. if the loegal: tender issues were withdrawn would be by the amount of increased interest. The commercial health of the country is of ten fold more value than $24,000,000 to the government. With inconvertible paper health is impossible, but with health, we could easily negotiate all loans for one 6th less interest. The $300,000.000 of national bank currency that would then be convertible, being over 50%. more than we had in 1860, would be an ample supply for the wants of trade. But while we are befogged with paper currency redeemable in other paper currency and that not redeemable at lf". worst conceivable form of inflation Congress will make lavish appropriations and the expenditures of the Government will be unnecessarily expanded at every session far more than any loss to be incurred on the score of interest by funding the U.S. notes. As legislators we come to hold money cheap. Familiarity with millions has bred a contempt for paltry sums, and it seems cowardice to shrink from any proposal merely because the figures are larger than would once have sufficed. Put off the day of } and we count large sums as trifles, orgetting that each dollar of every million will cost some one of our countrymen the sweat of a hard day's work. It is the golden moment for the party now in power to turn its attention to the dry subject of economy and stem the tide flowing out from the Treasury, for the day will approach when our course will not fail to be reviewed by tax payers. If we cannot now reduce taxation largely we can do much more by largely reducing our appropriations. If we prevent all raids upon. Treasury we shall entitle ourselves to imperishable gratitude. From the facts to which I have already called the attention of the House it would appear to be demonstrated that the simultaneous discov ery of new auriferous deposits in various parts of the world, of marvelous extent and richness, has rapidly and forever depressed the standard value of gold, whether as a currency or as a commodity, throughout all civilized nations, and that the U.S. standard of the precious metals used as currency has been depreciated from time to time, either by alloy or diminished weight, until it compares unfavor ably with that of other nations; that while we have already entirely extinguished or propose to extinguish the circulation of State banks, we have supplied its place and much more by the creation of a family of national banks, whose issues alone are 100 millions greater than the circulation displaced issues every where practically irredeemable and inconvert ible, and only claiming to be convertible at some time or other into other paper currency of still larger proportions, which the Government will in some way and at some time redeem, if it does not choose instead to go more deeply into the monopoly of fancy colored paper money; that deposits, bills of exchange, and checks of individuals really possess in commercial transactions all the functions of bank note currency, and in modern times are used at least 9 times more extensively, and therefore, in proportion to the business of the world, far less money is actually required than formerly; that the rapidity of circulation of money, or whatever circulates as money, greatly magnifies any currency which may be used in the U.S.; that the immensity of our paper money circulation tends to the spread of unthrifty habits and induces extravagance on the part of congress and the Executive Depts as well as the people; that a postponement of the time of resumption will find our people less preared, more deeply in debt, the banks with a E.line of discounts, and the credit system more expanded everywhere than now for a wise, steady, and prudent adherence to the idea of an early resumption; and without this cardinal idea always in front we are in danger, in the face of a diminishing revenue, of no resumption at all. A violent or abrupt contraction of the present volume of paper currency might not be advisable, and with the ever present interest of the Treasury urging the maintenance of an easy money market, there is no danger of its occurrence; but a moderate and persistent contraction of the flood within its old embankments is advisable in order to restore health and vigor to languishing industries and in order to build up our greatness as a nation upon that impregnable foundation for which the material, not more precious than solid, has been placed by Providence within our reach, and in greater abundance than is to be found in all other countries beside. We have just emerged from a most expensive war, and ought to exhibit that spirit which success justly inspires, grappling with the financial difficulties remaining as part of our inheritance with the courage that conquers, and thus, secure the vital interests of our own people while we challenge the respect of foreign nations.