Ml 
 
 
 i 
 
 
RESUMPTION, f 
 
 The Currencv and the Banks. 
 
 t/ 
 
 ESS 
 
 OF 
 
 GEORGE S. COE, ESQ., 
 
 PRESIDENT OF THE 
 
 AMEKICAN EXCHANGE NATIONAL BANK, 
 
 AT THE 
 
 convention 
 
 OF THE 
 
 gimcrtGtn gankrs' giHSOciatioit, 
 
 At Saratoga, August 7th, 1879. 
 
 SECOND EPITIO.N. 
 
 NEW YORK: 
 
 Published by the Bankers’ Publishing Association, 
 No. 247 Broadway. 
 
 1879. 
 
CLp'^ 
 
ADDRESS OF MR. GEORGE S. COE, 
 
 President of the American Exchange Bank, New York. 
 
 Mr. President and Gentlemen of (he Convention : 
 
 I consent to take this position to-day in order to develop in this assembly a 
 general discussion upon the admirable paper of Mr. Knox, and I think an assoJia- 
 tion of bankers such as I see before me, ought not to disperse without expressing 
 their sentiments on the subject upon which the Comptroller has so ably addre.ssed 
 us. If he is right, we should say so in our own way, and if he is wrong, let us 
 deliberately and without hesitation say so. Ho has stated in very happy terins the 
 effect of resumption, and wo have to congratulate ourselves and the country that 
 we have reached, after long expectation, the period of specie payments. 
 
 Have we really Uesiiiaeil anil how J 
 
 The question now is, liave we resumed all the conditions which properly belong 
 to the country in a time of perfect restoration ? Are we restored to all the healthful 
 relations of sound commerce ? Or is this only an accidental, a temporary, or partial 
 resumption ? Any person now having legal tender notes in possession may go to 
 the Treasury and obtain for them gold. That is a fact, and a very happy fact. But 
 the reason for it is, that the last seven years, as the Comptroller has hapiiilv said 
 have been years of plenty. They have filled the land with abundance, ahd turned 
 the balance of commercial exchanges in favor of the United States to the enormous 
 sum of nearly one thousand millions of dollars. We are so replenished with riches, 
 that we do not take the long coveted gold now that Ave can obtain it. This great 
 change comes not because of any new conditions in the policy of the Government. 
 As the war left the country in respect to its currency so it nmv remains. And the 
 reason therefore, for resumption, is the happy general commercial prosperity 
 which has returned, and not because of any measures adopted by the Government 
 It would bo a singular fact if, after a war of such unexampled .severity, in which 
 financial expedients of novel and extraordinary character were resorted to, we 
 should find the financial situation to be in perfect harmony with all sound economic 
 conditions. It surely would be a marvellous state of things if financial order 
 should spring out of civil discord and chaos. Let us look at the simple facts. 
 
 Is it a Souiitl anil Pormnnent Resumption J 
 Before the war the banks of the United States were the holders of the reserve coin 
 of the country and the solo issuers of its currency. At present the Treasuiy is such 
 custodian. It divides with banks the current issues, and all the banks, as well as 
 the people, seem perfectly content to have it so. To permit the Government to be 
 the sole cash keeper of commerce, and the banks to use as their reserve the notes 
 of the Government, upon which they rely for obtaining the coin whenever com¬ 
 merce requires it, unmindful of the fact that coin so situated is most exposed to 
 co^ercial alternation.s,—isthat the condition which Ave desire to have perpetuated? 
 
 IS that the best possible financial system for the country. This is the question, I 
 mink, to which Ave should now earnestly address ourselves. Let us examine it. 
 This country, as I said before, has had a credit balance of trade of nearlv one 
 thousand millions, tlie aggregate gain of the last six yeai-s, and all the .signs of the 
 tunes point to a gradual transfer of commercial empire from the Old World to the 
 
4 
 
 New. [Applause.] It is perfectly plain to every one who reads, that it can only 
 be a few years before New York and not London will become the financial centre of 
 the world, j Applau.se. j Already the change is aiiparent by our calling home 
 nearly all our own bonds, and ceasing to be borrowers abroad. It is more ap¬ 
 parent by our negotiating bonds of Canada and some other foreign securities, show¬ 
 ing that we have capital for ourselves in abundance, and some excess for other 
 countries. Already you i>erceivo a relative decline in the fertility of the land, and 
 in the industrial resources of England. Already you see an almost incredible 
 growth in this country of all productions and wealth, and from present appearan¬ 
 ces, it cannot be more than twenty years before we shall have attained the com¬ 
 mercial supremacy. If that be so, it becomes us as bankers and as citizens to look 
 carefully at the (piestion. Arc we upon a sound financial basis at present, and is it 
 such a basis as, with such high expectations, we wish to perpetuate ? Is it such a 
 basis as will best promote the social growth for which we are ambitious ? 
 
 Two KIiicIm of Currency, 
 
 At present the bank notes of all the National Banks rest upon other notes, for which 
 it is assumed we can obtain coin if wanted. Now, what is theTuse of that superfluity 
 and complication in the financial machinery ? It would be awery illogical arrange¬ 
 ment, if we had to make it anew, that one note should rest upon another note, and 
 that note uiion something else. If this plan be a sound one, as I said before, it is 
 very illogical. The fact is, gentlemen, it is not a sound one, and we all know it is 
 not ; therefore, wo might as well confront the question honestly and fairly now. 
 
 One or tho»other of these two classes of circulating notes ouglit to be superseded. 
 There is no evading that conclusion, if we honestly bring our minds to the subject. 
 
 If the bank notes now rest upon other notes, and those again upon a reserve of 
 coin, particularly exposed to the vicissitudes of foreign trade, why not dispense 
 with one class of the circulating notes, and let them all be of the same issue ? There , 
 ought to be something, gentlemen, in the nature of the two things which is 
 essentially different, or else wo must absolutely abolish either the one or the other. 
 Which kind is the fittest to survive ? Let us see. 
 
 Which is the Best Kiiul I 
 
 During the last year the exports of the United States were some seven hundred 
 millions, and the imjjorts some four hundred and fifty millions. The difference 
 was between two hundred and fifty and three hundred millions, and it has been so 
 for two or three years in succession. The property represented in those large sums 
 did not pa.ss by means of money. There was almost no money used in it. What ' 
 was the operation ? Ships sailing to and fro upon the ocean, carried great cargoes 
 of the various jiroductions of the United States, and brought back in return the j 
 
 products of every other clime. By what means were those large changes of jiroperty i 
 
 effected ? By simple pieces oi paper, not in any sense money, but by instruments ; 
 
 which we call Bills of Exchange. These great changes were chiefly promoted by a j 
 
 class of citizens most useful, important, and, in fact, indispensable, called bayikers. i 
 
 Those bankers became, from time to time, the custodian!, of all this merchandise, by ' 
 
 means of those bills representing and controlling it. Their siiecial service in the 
 human economy is to distribute and exchange property. 
 
 \VUa< iJi all True Currency made of! Ist, International Currency, 
 
 Now, it is perfectly clear that such bills of exchange are the currency of the 
 world. They constitute the currency of the larger denominations by which the , 
 
 world’s wholesale business is transacted. That we all know. But Avhat does that | 
 
currency rest upon ? "What gives it value, and by what means is it .secured ? 
 Ui>on the .ships, ui)on the cargoes which go to and fro, and against whicli the bills 
 are drawn. If any of you require a bill of exchange, and Avish to know of a surety 
 that it is true and genuine, and absolutely guaranteed to bo so, you will .say to the 
 gentleman Avho comes to negotiate it: “I am not certain that you have shipped a 
 cargo against which you draw this bill, and in order to secure your fidelity I demand 
 that you give me a bill of lading of the goods shipped. This I will attach to the 
 bill of exchange to Avhieh tho transaction belongs.” That is the basis of the whole 
 operation. In other words, some form of useful industry constitutes the sum ami 
 substance, not only of that paper, but also of the avIioIo Avorld’s eommerce, and 
 thus business continually goes on, not by the use of money, but by got)d.s ex¬ 
 changed among mankind, Avhich are useful and nece.ssary for human life. Such 
 bills of exchange are really the Avorld's currency ; l)ut Avithout the shipments, the 
 currency Avould be good for nothing. They are tho essential ingredients out of 
 Avhich tlie bills are composed, and tho goods must thus pass, or else tho bills are 
 not genuine. Noav, su2?po.so tho Governments of tho United States and Great 
 Britain Avere to make a treaty, jicrmitting tho is.sue of GoA-ernment bills, Avithout 
 tho shipment of any goods Avhatcver. What Avould be tho effect of them Aii)on the 
 world’s industry ? Suppose tho United States Avero to issue three hundred and 
 forty-six millions of bills upon London (that being tho amount of currency issued 
 by the Government at home), and not ship a dollar of in'o^Aorty ? Is it not A-ery 
 manifest that tho people of this country Avho used them Avould draAv, through tho 
 world’s commerce, that amount of tho labor and industry from the i)eoplo on that 
 side of tho water, without giving them anything from this side in return. They 
 would disaiTange tho Avholo Avorld’s affairs, and disturb all the relations among men 
 and nations. Thei’o is nothing jdainer than that. 
 
 And supiAOse that the United States-should say : “ This bill is iJorfectly good ; 
 becau.so Avhen it becomes due, another Avill bo given of tho .same sort to pay it 
 with.” Then what becomes of the balance of tho exchange between tho tAvo 
 nations ? It seems, therefore, i)i‘actically a most false, ruinous, and absurd assumj)- 
 tion of lAOAver in GoA'ornment, not i)os.sessing industrial lAowers, to create commer¬ 
 cial instruments, Avhoso A'ital es.sence and virtue must, in tho very nature of things, 
 bo Avanting. Neither tho Government of the United States nor any other Govern¬ 
 ment can legitimately is.sue this kind of currency, unle.ss it be endued Avith i)OAver 
 from on High to create the goods out of Avhich alone any true currency can bo 
 made. To lAcrform this omnipotent act. Government must possess omnipotent 
 powers, and, as Mr. John Bright said recently in the discussion of a kindred sub¬ 
 ject : “Hero is Avhcx’o the omniixotenco of human government xitterly fails. ” 
 
 !4«1, Homo Currency. 
 
 Having tlms shoAvn tho operation of currency for international trade, let me make 
 another illustration for the homo market. Tho other day, Avith the President of 
 this Association, I A\’ent into tho New York Clearing House, and Avhile there tho morn¬ 
 ing exchanges betAveen banks was going on. Wo saw jiass through the hands of 
 tho bank messengers, Avithin the space of about ten minutes, ixieces of jxajjcr called 
 hank checks, representing eighty-soA-en millions of dollars. These eighty-seA-en mil¬ 
 lions—Avhat were they ? Tho exchange of industrial proijerty and things. Avhich 
 had occurred in the City of Ncav York, through all the banks the day before. There 
 was not a dollar of money to bo seen in all this, but after those exchanges Aven' 
 made up there appeared to bo two classes of banka; one a creditor class, Avhich had 
 given more property than they had received, and tho other Avas a debtor class, Avhicb 
 
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 had given less, and the difference l)etwcen those two classes was some five millions 
 of dollars, which sum had subsequently to be jmid in money. That wjus all the 
 actual money needed for that great transaction. 
 
 Now, the same suggestion I made a moment ago, I now make in respect to these 
 instruments of internal commerce. The checks and papers pas.sed between those 
 banks were internal currency, and they, like the foreign exchanges, were based 
 upon tlie actual transactions pressing tlirough banks, and by them through their 
 dealers, the community at large, the day before. And I now state this is an 
 undeniable axiom. You cannot make a paper honestly representing value unless 
 it actually passes property from one person to the other for the full value repre¬ 
 sented, and such is the case with every legitimate note or obligation issued by a 
 sound bank. If that bo true, the essential superiority of bank currency over the 
 Government issues must be apparent. 
 
 Why C»ov<;i'nmcii< caiincit inukt; SciuikI Currency. 
 
 This seems to me to bo a statement in exact science that cannot be denied. 
 Now, whence comes industry ? It is the personal, individual act’ of every man. 
 Government has no function for it whatever. It has no capacity for production, 
 distribution or exchange of industry. It cannot, therefore, furnish genuine cre¬ 
 dentials of labor. If it forces its ciirrency devices into business the intrusion can 
 only i^roduce derangement of all honest labor, first, last and always. It cannot 
 create capital. It has power to borrow it from its prodiicers, and when it borrows, 
 it borrows like an individual, by paying an annuity to the owner for the u.se of it. 
 A pajier that passes as money value, without pa.ssing at the same time, the real 
 material of which it is composed, is just as ab.surd as a coin without any metal 
 in it. Coin or money of the world’s standard passes property of intrinsic value in 
 itself. Genuine paper currency of eve\'y hind., must imss propei'ty, concurrently xcith 
 itself, and of the money value expressed. 
 
 One more illustration from private life. Two boys meet in the street and swap 
 jackknives. One of the articles is worth two dollai’s and the other one dollar ; the 
 balance of trade is against the one and in favor of the other. Now, that creditor 
 boy is an American citizen, and after parting with his property he has a right to 
 claim a full dollar in return. That right he has acquired by virtue of his being a 
 human being, entitled “to his life, to his liberty, and to his pursuit of hapiuness,” 
 which means his property ; and no government can fairly deprive him of either 
 without giving him a full equivalent. To be sure, in case of war, the nation may 
 take them all, by taking the boy himself. It is a duty which every one owes to his 
 country, to hold himself in readiness thus to be sacrificed on the altar of patriotism. 
 But war having ended, and the Government having returned to iis normal condi¬ 
 tion, the boy again becomes free, and is entitled to all his rights and privileges, 
 which cannot by any constitutional government bo taken from him. It is the glory 
 of law to extend this protection to the humblest citizen. To interpose a paper in- 
 stnimcnt, compulsorily, in a trade Ijetweeu him and his fellow, which deprives liim 
 of the possession of his dollar, is an abridgment of his liberty and ijroperty. And 
 it seems strange that this free American nation should claim the right to do that 
 which would not bo i?ermitted by despotic power. That, however, is the-practical 
 resxilt of legal tender currency, by Avhich the boy is compelled to take that for his 
 property which docs not immediately convey to him a dollar’s worth of property 
 in return. 
 
 These three illustrations seem siifficient to shoAv the nature and pi-actical opera- 
 
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 tion of trtie currency, and wliy it is beyond cho power of Government to furnish 
 the genuine article. 
 
 They also show the folly and absurdity of all those estimates so often made, of 
 the amount of currency required for the business of the country, and which are 
 sometimes carried so far as to i)rescribo the exact sum needed i)er capita of popula¬ 
 tion, regardless of their special industrial conditions. This is like gathering to¬ 
 gether a large number of vehicles or railroad cars in a given locality, to move a 
 desired crojj not jiroduced, or of jjroviding shijjs pro rata of inhabitants to trans¬ 
 port a commerce which is hoped for biit does not exist. All such calculations of 
 the power of currency to create business are only misconceptions of its nature, and 
 place the consequence before the cause. 
 
 Why Govcriimcnl <'urrt*nry slioiild l>c- liotirc-d. 
 
 The Government of the United States have, it is true, now provided for its cur¬ 
 rency issues a small proj^ortion of the value which they purj^ort to cojivey. Why 
 should they not provide for the whole, and retire from a business for which they 
 have no competency ? Is there any reason in the nature of things why they should 
 not ? On the contrary, does not every commercial instinct imperatively demand 
 it ? The war is over. These currency devices were born in poverty and in the 
 nation’s extremity and supposed inability to boiTow capital. Since then this thou¬ 
 sand millions of new capital has come in, and offers itself to the Government iqion 
 the lowest terms. 
 
 All the natural rights which belong to men in society arc now re-established, and 
 we rightly say to Government “ You cannot longer interpose either your fiction for 
 a dollar, or a deficit dollar, because we are free citizens ; and as such we reclaim our 
 privileges, only temporarily suiTondered, to go everywhere and anyAvherc with our 
 property, unabated by Government interference. To abate, or diminish it, excep¬ 
 ting by the imposition of jitst taxes, is an infringement of natural right which Ameri¬ 
 can citizens must rejAel with patriotic ardor. ” And such being the case, why can 
 we not restore the conditions that existed before the war ? Why shoiild not the 
 Government perfect that which it has begiin, and leave comnierce to itself ? There 
 has been already gathered into the Treasury forty 2)er cent, of iudustiw 2ier hun¬ 
 dred, of that which 25 rofesses, but does not re2iresent industry. Why should not 
 the remedial process go on until wo have entirely cleared away these relics of" the 
 great conflict, and converted those exceptional financial instruments of war, into 
 the plough-shares and the pruning-hooks of 2>eacefal industry ? We have all seen 
 the baneful effects of contintiing the use of an expanding currency. We all know 
 that until the beneficent panic of 1873 occurred, we were financially under a centri¬ 
 fugal force which was sending this great Nation to destruction as fast as 2>ossible. 
 That event, sometimes regarded as a misfortune, was in the highest degree remedial. 
 It Avas the natural development of previously existing commercial disease. It aAvoke 
 the Nation from its delirium and rein.stated it u2)on the track of sound industry and 
 2Jrovidence, and it has resulted in since turning the balance of exchanges in favor of 
 this country, as I have already stated, about a thousand millions of dollars. 
 
 It seems noAV the order of Providence, against Avhich we may not rebel, that 
 commerce should resume its normal conditions. Incoming re.sources provide abun¬ 
 dant means. Is tliere anything in the 2ieculiar financial conditions that should 2ii'G- 
 veiit it ? On the contrary, do avo not by permitting the continuance of GoA'ernment 
 currency, cherish the germ Avhich like an e2)idemic lies latent during the Avinter, 
 ready to break out again into fever upon the a2iproach of the hot season ? It is a 
 
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 danger wliicli, if not removed, may again revive with the same terrific injury as 
 before. 
 
 Tliis i.s a moral as w'ell as a financial question. It is a question tliat affects the 
 welfare, and tlio stability of society. No man can doubt this, when ho reviews the 
 circum.stances of the hist ten years. It i.s not a mere matter of dollars and cents * 
 it is a question of human life and destiny. Th<\so things, indissolubly united in tlie 
 order of Providence, cannot be separated. 
 
 With these simple illustrations, I have said enough to show that industry is the 
 true and only means of restoration, and will naturally and noco.s.sarily provide the 
 best currency instruments by -which wealth can bo exchanged, and its results incor¬ 
 porated into vital forms and institutions to benefit society. As the country now 
 starts upon a new career, shall the great West, the granary of the world, and all 
 other sections of the land now teeming with surplus i^roperty ready for exportation 
 —shall they bo permitted freely to exchange their productions for the wealth of the 
 Old World upon equal terms ? Or shall there be needlessly interposed an obstacle 
 created by war, unknown or unrecognized in other nations -w'ith w’hich wo ex¬ 
 change, and which renders the financial results of all this industry variable and un¬ 
 certain. 
 
 Commerce has to do with mankind at large, and with pi'oducors and consumers 
 irrespective of national lines. It must bo apparent that any peculiar, local standard 
 or conventional measure established by a people seeking the benefits of the largest 
 trade, is a self-imposed impediment to their own progress. The smallest trader, 
 liroducer or laborer, when ho sells his property or his service, knows not but that 
 they Avill enter into some great aggregate for shipment abroad. And if they do not, 
 their value is favorably affected by a wuder demand. The humblest laborer and the 
 largest merchant or banker are therefore bound together by a common tie, as 
 workers in the great human hive. They are alike interested in having the most ex¬ 
 tended commerce with the world, and also in adhering to the standard which the 
 world most recognizes. They who aim to inject into the currency a false represen¬ 
 tative of labor, or to alter the measure by which labor is exchanged, may justly bo 
 .suspected of a sinister design. They are either drones or deceivers. 
 
 tiovcrnmt'nf and lianU Currency Coini>are<l. 
 
 In the light of this explanation, let us now, as bankers, examine the statements 
 of the National Banks, and of the Treasury Bank, in order to test the relative merits 
 of the two currencies. 
 
 1st. The National Banks are indebted to the public— 
 
 Milliong. 
 
 For deposits. 823 
 
 For circulating notes. 290 
 
 Total.1,118 
 
 ey have in hand to meet this indebtedness assets as follows : 
 
 Millions. 
 
 Loans and debts due to them. 1,191 
 
 United States and other bonds. 420 
 
 Coin duo from Treasury. 40 
 
 Legal tender notes. 123 
 
 Total 
 
 1,774 
 
y 
 
 Showing an excess, which is their own capital ayid surplus, of fiSG millions, or 
 one humirecl and fifty eight dollars of assets for every one hundred of liahilities. 
 These assets are composed in large measure of notes secured by every form of 
 industry produced by people in every section of the country. They are jiredicatod 
 upon cotton, corn, wheat, farming utensils, and upon the infinite variety of things 
 ■which contribute to the life and comfort of society, and which are hourly and per¬ 
 petually exchanged for other such things, among the people, through the banks. 
 This is the service which the banks perform, and without wdiich our advanced 
 social life could not exist. It is a service so indispensable in the great economic 
 system that every civilized nation of the world has found it necessary to establish 
 and to encourage such institutions and associations as \vo rejiresent. The oldest in¬ 
 stitutions in Europe are of this chanujter. In fact, some of our own associates, still 
 in youthful activity, arc the most venerable in the land, and are older than the 
 Government itself. The liank of North America, in Philadelphia, was formed by 
 Kobert Moms, our Colonial Secretary. Its aim was to draw from the peoide their 
 industrial resources to sustain the Ilevolution, and he did it. Through that insfni- 
 mentality means w'ere mainly provided to defeat Cornwallis. The Bank of New 
 York, founded by Alexander Hamilton, is 100 years old ; and the Manhattan Com- 
 j)any Bank, inaugurated by Aaron Burr, whoso able President is near me, is about 
 the same age. Y’our own bank, Mr. Chairman, has been in business some 75 years; 
 and a larger number of our more youthful institutions have existed half a century. 
 And no sooner does any new community grow into tlu* importance of a commercial 
 town or city, than a bank is established to supply an obvious need. This fact of 
 itself proves that they do a work which society demands, and that there is an 
 intrinsic necessity for their existence. The part of the ctirrency of the.se institu¬ 
 tions wliich is composed of depo.sits and is trausfen-ed by checks, forms the medium 
 for larger transactions, and that part which consists of bank notes is iised for the 
 the smaller. It is all alike currency, and iierforms substantially the same office, 
 the notes being the subsidiary currency, just as pieces of metal of smaller denomina¬ 
 tions are the subsidiary coin or money. These notes are seciired by, 1st, the cai^ital 
 of the bank; 2d, by the property taken bv the banks and held to rodoom tho notes 
 ■when paid out; 3d, by Government bonds of 100 cents for every 00 ceati issued. 
 They have the guarantee of Government and of the personal property of the i)eo- 
 2 )le, each to more than their face value, as security; and, if the Comptroller con¬ 
 tinues to exercise tho same fidelity which has so far eminently characterized him, 
 these banks Avill be j^repared at any time to hand over to their creditors, upon 
 instant demand, either money or the money equivalent in other industrial values, 
 such as will reimburse them in full and leave a largo margin or excess, us alieady 
 stated. 
 
 Now, in the same way, let us examine tho Treasury Bank ; it has issued ; 
 
 MillioiiR. 
 
 Notes payable on demand. 310 
 
 Fractional notes. 10 
 
 Total. 302 
 
 It has assets to moot this indebtedness— 
 
 Minion 
 
 Gold and silver coin and bullion. 14S 
 
 Deficit. 211 
 
This hank is therefore prepared to pay to its creditors on demand forty-one cents per 
 dollar^ l)nt for the balance it lias nothing to show. Where is this deficit sum to be 
 found ? Simply in the power of taxation. This is a power slow in its operation and 
 utterly impracticable as an immediate resource for payment on demand. The other 
 resource consists in the power to borrow capital. This kind of bank conducts its 
 busine.ss upon the chances of floating a currency, wanting all sound commercial i 
 
 basis, under the idea that p.art of it only will be returned for redemption. What is j 
 
 that but doing by Government, as much illegitimate financiering as is pos-sible with- i 
 
 out exposure, and resting in the confidence of being able to retire in case of need, * 
 
 behind its good credit as a borrower ? W’hat is it but doing by Government a kind ^ 
 
 of banking it w'ould arrest as criminal, if done by its .subjects ? It must be remem- ^ 
 
 bered that every true note certifies to the community the ability of the country 
 to expend the value it repro.sonts, and every false one, the more it is accredited, the 
 more it deceives, by inviting and facilitating expenditures in excess of means, so ; 
 that the very high credit of Government currency, gives it peculiar danger. Such ■ 
 
 an institution as this surely has not the qualities of a bank of last resort. If the i 
 
 good rules which the Comptroller applies to all National Banks should be apiJUeJ, ' 
 to this, it must be ruled out as an unsound institution. 1 
 
 (iover linin'lit hIioii 1<1 1ft t’limmcrfc provide Its own Currency. 
 
 If this view of the laws which underlie all commerce among men be correct, it 
 must be seen tliat our better currency is resting upon the w'orse, that there is in that 
 re.spcct a complete inversion of all sound financial 2 irincii)les, and that what we rely 
 uiion as the reserve of Banks and the last resort for all business transactions in the 
 United States, is really the weakest item among the commercial assets. While other 
 jiortions of them are founded upon full exchangeable values, this one, the very 
 foundation of them all, contains but forty-one iier cent, of convertible worth, and, 
 the deficiency, when demanded, must be supplied from those very commercial re¬ 
 sources which banks represent. It is also obvious that when the lialance of trade 
 necessitates a resort to these Treasury reserves, the disturbance and exhaustion 
 produced will render a loan by the iieoplo uO- the Government more difficult and 
 uncertain. Ilere then is auothe:- chance to which tliis Treasury Bank is exposed.] 
 
 Is it not an undeniable fact, that while Government notes, be they more or less in 
 amount, inevitably betray the peojile into extravagant expenditures, labor must 
 finally be called in to save what has thus been lo.st ? And even if the wasted sum 
 be suiri)lied by foreign loans, it is yet true, that the labor and economy of other 
 lands will contribute to counteract the prodigality of this, and must bo comirensated 
 by labor in return. So true is it that the universal law of labor is one of mirtual 
 obligation and dependence the world over. It is a lawre.sting uiron every man, and 
 from it, even Government cannot emancipate nor absolve us. 
 
 The only security for commerce and for the country then lies in the entire with¬ 
 drawal of Government from all further effort to supply a currency for the people, 
 and from all interference with industrial exchango.s. So long as such a jiower is 
 recognized as within the j^ossible functions of legislation, the industries of every 
 citizen and his consequent hai5}>iuoss as well an the consequent well being and good 
 order of society, will be subjected to the ca 2 >rices of Congress. The Divine law’ is 
 thus sui^planted by human legislation, and nothing but discord can result. 
 
 All Kasy Solution of tiic truest ion. 
 
 The lu’actical question remains, how can this now best he done? The Congress 
 that authorized the issue of t!io original legal tender notes never contenqdated the 
 
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 possibility of tlieir continnancc after tlio war was over, and to promote tlieir early 
 extinction as currency, they made every one of tliem convertibh! into a six i)er cent. 
 l)ond. Tims inviting exchangeable capital to be supplied for them from surplus 
 industry of this or other i)eoples, by imprinting upon each note the offer of a liberal 
 annuity for a loan of its amount. Had this condition been continued, the notes 
 would long since have con.sed to exis-t, and the Government and people would have 
 saved an incalculable sum, .subse(iuently lost by waste, extravagance and prodigality, 
 besides averting the untold misery, di.sappointment, wretcluulncss and crime, 
 directly and indirectly traceable to the prolonged use of this now and variable 
 medium of exchange. As originally issued, they presented an inducement for every 
 holder to exercise his skill, industry and economy to secure to himself the offered 
 annuity. They were earnest incentives to thrift and motives to economy, but in an 
 evil hour this privilege was withdrawn, and the notes became like idle and unmiti¬ 
 gated tramps, possessed with i^ower to consume the cajiital of othem, but l ondoring 
 none in return. The option given to every holder to loan, was a continual solicita¬ 
 tion to save. But the irredeemable, unexchangeable note, on the contrary, awakened 
 an intense desire to expend, in order to secure for it any species of property attaina¬ 
 ble, regardless of price. This Avas the grtnitest financial blunder of the war. It 
 cost the nation untold millions in money, and infinite demoralization. It relaxed 
 all industry, and ma<ie us a nation of prodigals. 
 
 These great evils having been arrested by a natural reaction from their very ex¬ 
 cess, it is now the duty of every good citizen to take measures to prevent their pos¬ 
 sible recurreiice, by urging a total abolition of the system out of which it grow. 
 This can be effectually done ■ by the simple restoration of the privilege of funding 
 into bonds, bearing a rate of interest of the last loans made by Government By 
 this means the desire to save will be revived, industry Avill be stimulated to create 
 the capital required, the deficit sum uoav entirely Avithin the eapacity of the nation, 
 Avill bo gradually supiiliod from the resources, industry and ingenuity of the people, 
 and exchangeable values, convertible into gold or into any other fonn required, 
 will fill the void uoav represented by Government currency, Avhich Avill imperceptibly 
 pa.s3 away. This change maybe made AA'ithout violence, commotion, or financial 
 embarrassment. It Avill proceed in the silent order of nature, surely and effcctuafiy, 
 affecting beneficently ev'ery good interest and injuring none. The Avhole nation, in 
 eveiy part, and eA'eiy man in it, will feel the rencAving influence, and there will be 
 opened up on this broad continent a period of sound commercial prosperity such as 
 the world has never yet seen. Why should Ave delay in removing forever thi^ last 
 A'estige of war, or hesitate in reinvesting this great nation Avith the unrestricted 
 iwwers and privileges of healthful commerce ? [Applause.]