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President Grant's Financial Views

President Grant's Financial Views image
Parent Issue
Day
12
Month
June
Year
1874
Copyright
Public Domain
OCR Text

Washington, June 5.- Tbe following correspondence on the finanoial question between the President and Senator Jone, of Nevadn, lias been obtnined for publiofttion : l'xiTF.n St.vtks Sknatk ('uamjikk, Washington, ,lum' 4, IK7 1 . v la llic Vrciti'ltut. I was so deejily impreaaed ly tlm olewness and wisdom of tho fiiiancittl viowa - somo of which you have fortunately reduced to writing - leccntly expressd by you in a conversation in whiclí 1 had tlio honor with a few others, to be a participant, that I cannot disuiistheni frum niy inind. Tho great divorsity of ideas throughout tho country upon the subject, and the tact that public opinión lipón tho samo is still in procesa of fornmtion, lead me to bolievn that the publiuation of these viows would bo productiva of great good. I venture, thcrufore, to rmjucat of you that I muy have a copy of the written memorandum to whicli I have alludd with your pennission that it may be made public. I havo the honor to b very Wpeotfully your obeditmt servan t, (iSigued) JOHN 1'. JON BS. ExECVTivr. Maxstox, Washixotox, D. O., June 4, 1871. S Deah iSir : Your note of tlii datt; roquesting a copy of a memorandum which I hud prepared oxpressive of ui y viows upon the financial queslion and which you with others have heard rcad is received, butat too lata an hour to cuinply to-night. I wil!, howovar, takn great pleasure in furuishiiig you a copy in the inoming as eoon as 1 can have it copied. It ia proper that I Hbould state that theso views wore reduced to writing becauso 1 had been consulted on this questioii not. only by some of tho raeinbers of the Conference Coniuiittoe, butby other nieuibers of Congress. To avoid any and all possibility of niisundorstanding I deeuied this course both justifiable and proper. With this explanatiou I euclose you herewith the meinorsiidum referred to. Very respectfully, U. S. GRANÏ. To Hon. J. P. Jones, Unitod State Senntc. THE " MEMORÁNDUM." I believe it a high and plain duty to return tu a specie basis at the earliest practicable day, not only in ccnipliauc with legialative and party pledgas, but M a step indispensable to lasting uational prosperity. I believe furthor that lbo tiiue has come when it can be done, or at least begun, with les.' eiubarrassment tu every branuh of industry thau at a future time, after resort has been had to unstable and teniporary expedienta to stimulate unreal prosperity and gpeculation ou bases other thau coin aa the recognized medium of exohiuige throughout the commercial world. The particular modo solected to briug about a rostoriition of the specie standard i not of bo much consequonee as that ome adequate plan be devised, the time tixod when curroncy sliüll be uxuhangeable tor coin at par, and the plan adopted rigidly adhered to. It is not probable that any legislation suggested by ïr.e would provo aeceptable to both branches of Congres, and indeed a f uil discussiou might shake my own faith in the details of ány plan 1 might propose ; JL will, however, vonture to state the general features of the action whiofa seeius to me advisable, the iinaneial platform on which I would stand, and auy departure trom which would be in a spirit of couco8sion and harmony in detsrence toeonflicting opiuions. First, I would hke to see tho legal tender clause, so-cttlled, repealed the repeal to take effect at a future time, say July 1, 1875. This would cause all coutracts made after that date tor wages, sales, &c, to be eathnatod in coin. It would correct our notions of valuos. The specie dollar would ba the only dollar known aa the measure of equiraleuts. When dabts afterward contraoted were paid in currency, lustend ot calling the paper dollar a dollar and quotlug gold at so uiuch premium, we should tliink. and speak of paper as at so muoh discount ; this alone would aid greatly iu bringing the two eurreucies nearer together at par. Second, I would like to see a provisión that at a fixod day, say July, 1, 1K76, the currency issued by the United Stutes should bo redeemod iu coin on presentation to tui y a.ssi.stant treasurer, and that all the currency so redeeuied should be cancelled and nevur re-issued. To effect this it would be necessary to authorize the issue of bonds, payable in gold, bearing sucti interest as would command par in gold, to be put out by the Treasury only in such suuis as would from time to time be needed tor the purpose of redemption. Such legislation would insure a return to sound tinancial pirnciples in two years, aud would, iu uiy judgment, work less hardship to the debtor interest than is likely to come from putting off the day of final reckoning. It must be borne in iniud, too, that the crédito interest had its day of disadvantage also when our present financial systeui was brought in by the supreme noeds ot the nation at the time. I would further provide that, from and after the date fixed for redemption, 110 bilis, whether of uational banks, or of th.e United States, returned to the Treasury to be exchanged tor new bilis, should be replaced by bilis of less denoraination than f 10, and that in one year after resuroption all bilis of loss than $ó should bo withdrawn froui circulation, and in two years all bilis of less than $10 Bhould be withdrawn. The advantage of this would be strength givon to the country against time of dejiression resulting froin war, failure of the crops, orother cause, by keeping always in the hands of thu people a large supply of tho precious metáis. With all the stuallertransactions conducted in ooin niiiuy millions of it would bo kept in constant use, and of course prevented t'rom leaving the country. Uiidoúbtedly a poorer ourrency will ulways drive the botter out of circulation. With paper a legal tender and at a discount, gold and silver beconio articles of uierchandise as inuch as wheat or cotton. The surplus will find the best market it can. With small bilis in circulation there is no use for coin, except to keep in the vunlts of bank to redeera circulation. During perioda of great speoulation and apparent prosperity there is littio demand for coin, and then it will flow out lo a market wliere it cnn be uiado to earu Homethiug, which it cannot do while lying idle. Gold, like anything olse, wheu not ueedcd becomos a surplus, aud liko every other surplus it seeks a market where it can find ouo. By giving active umploymeut to coin, however i tg presence can, it Booms to lue, be Becured and tho punics and dopressions whioh have oecurred periodically iu timet of nominal specie paymonts, if they cannot be wholly provonted can at loast bo groatly mitigiitod. Indeed I question whether it woiüd lmvo been found necessary to depart f'rom th standard of specie in the tryiug days which gave birth to tbc first legal-tunder act, had tho country taken the ground of no smnll billa at early as 1 S.50. Agaiu, I would provide au exces of revenuo over current exponditures. I would do this by rigid econouiy and by taxation whoro taxatiom can bo best borue. Increased revonuo would work a constant reductiou of debt aud interest, und would provide coiu to meet domands on the Treasury tor the redemption of ita notos, thereby diininishiug the ainount of bonds needed for that purpose. All taxes after redemption beging should be paid in coin or United States notes. This would force redemptiou on the natioual banks. Witli moasures like these or meaaures which would work out such results I see no dangcr in authorizing frpo banking without limit. A Milwaukue boy hasswallowud half a dozen steel buttons, und bis mother doesu't have to screum tor hini when be is out on the Street playing with tbo Cluckersou boys. She just bringa a magnet to the door, and hu flies to it like a ueedle to the pole.

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