The Finances

The important diity lmposed on this department by tlie Besumptión act, approvcd Jan. 14. Ibï5, has been steadily pursued durin the past year. The plain parpóse of the art is to secure to all tnterests and all classes the benefits of a sound currency, redceuiable in coiu. with the lea.it possible disturb anee of existí ng rights and contracta. Throe of its provisions have been subatantially carried into execution by the gradual substitution of fractional coiii for fractional currency, by the free coinage of trold and by tree banking 'Jhere reuiaius ouly the completion of prnparations for resumxtion in eoin ou the Int day of Jauuary, 1S7VÍ. and its mainteuance thcreafter upon the basis of existing law. At the date of my aunual report to Congrcss in December, 1877, it was deemed neeessary, as a preparation for reeumption, to aecumulate in the treasury a coin reserve of at least 40 per cent. of United .States notos outstanding. At Ihat time it was antirijiated that, uuder the provisions of the Besnmptiüu act, the volume of United States notes wonld be reduced to $L00.000,000 by tho lst of January, lsT'.t, or soon thoreafter. and that a reserve in coin of $120,000,000 would then be suineient. Con ffress, howevcr, in view of the strong popular feeliug against a contractinn of tlie currency, by the act approved May 31, 1878, forbado the retirement of any United States notes alter tliat date. Ieavifig tlie amount in eireulat.ion fWttJÖtfl.OlG. Upon the principie of safety upon wlnch the department was actinsr, that -1U per rent. of coin was the mallest reserve upon whicja resuniption could prudently be commenced, it beeamo. necessary to increase the coin reserve to $138,1)00,000. At the close of the year 1877 this coin reserve, in exeesa of coin liabilities, aznounted to $W,f ltf.030.96, of which $15.000,000 were obtaíued by the sale of 4)é per cent., and $25,000,000 by the sale of 4 per cent. bonds, the residue being surplus revenue. SubHocmontly, on the llth day of April, 1878 the Secretary entered into a contract with certain bankérs in New York and London- the parties to the previous contract of June it, 1877, already communicated to Congress- for the sale of $50.000,000 4} per cent. bonds for remimption purposes. The bonds were sold at a premium of 1 v per ent. and acerued intereHt, lesR a commipHion'of y of 1 per cent. The contract lias beeu fulftlled, añd the net proceedfi, ÉB00O,0CO. have been paidinto the treasury in gold. The $r,5(H).U00 coin paid ou the Halifax award have been replaced by the sale of that amount of 4 per cent. bonds sold for resumption purposes. making the arei?ate amount of bonds sold for these purposes ,55,500,000, of which $K5,t'00,(MX) were A} per cent. Iwuds. and $:;0.500,000 4 per cent. bonds. To this has been added the snrplua ïvveuuo from time to ti-ne. The amount of coin held ín tho üvasury on tho 2&1 day of November last, in excesa of coin sufficient to pay all acerued roín liabilities, was $141.Síís.1O0, and cozusti tutes the ooin reserve prepared for resumption purposes. This Puin wíl] be diminwhed somewhnt on the lst of January next ly reason of the largo amount oí interest acmting on that d.iy In excess ot the coiu revenue receíved mranwhile Tn antlcipatlon oL resumption, and in view of the faet that tlui redemption of United States notes ia mahdatory only at the office of the Assistant Traasurer in the city of New York, it was deemed important to secure tho co-operation of tho associated bankt) of that city in the ready collection of drafts on tliose banks aud in the payment of treasury drafts held by them. A aatisfactory arrangement bas beeu made by which all draftï on tho bauks held by the treasury are to be paid at the ClearingHoiitie, and all drafts on tlie treasury held by them are to be paid to the ClearinR-House at the ofliee of the ARsistant Trnasurer, in C'nited States notes; and, atti-r ihe lst of January, United States notes are to be received by them as coin. This will greatly lessen the risli andlabor oí collections both to the treasury and the bftlïks. Every step in these preparationa for resumption lnih bpen accompanied with inoveosed business and confidence. The accumulation of coin, instead of increasing its price, as was feared by many, has ! steadily reduced its premium in the market. The depressing and ruinous loases that followed the panic of 1S73 had not diminished in 1S75, when the Itesumption act passed; but every measure taken in the execution or enforcement of this act luis tended to lightèn these losses and to reduce tho premium on coin, so that uow it ís merely nominal. The present condition of our trade, industry and commerce, hereaft er more fully stated, our ampio reserves, and the general conüdence inspired in our ünancial condition, seem to justify the opinión that we aro prepared to commenceand maiutaiu resumption from and after the first day of Januarv, A. D. Ib7!i. The means and manuer of doing this are left largely to the diserction of the Secretary, but, from i the nature of tho duty imposed. he must restore ' coin and bullion, when witlnlrawn in tho process of redemption, either by the sale of bonds, or the use of the surplus reveuue, or of tho noted redeemed ironi tiuiü to time. ' ïho power to eéU any of the boivls df-s-.-übed in the Refundin.? act continuos aftor as well as befare rcKtimption. Though it raay not be ofteu used, it is essenüal to cnable tbia riepartment to meet emergenclea. By its exercise it ia anticipated that the treasury at any timo can readfíy obtain ooín to reinforce the reserve already accu mul ated. United States nötes must, however, be the cluof nieana uu ier existing law with wliich tho dermrtrapnt BltU1 restore coia and bullion when withdrawn iti procoas of redomption. Tho notos, when reÖfeeiöed. fpftft ueoessarily acoumulaio iu the treanury unti) their superior uso and convenlence for eirciüation enables the departmeut to exenango thuai at par for ■oin or bullion. The act of May 31 , 1878, alrcady referred to, provides that when United States noten ar redéemed or received in the treasury under any law, from any sonreo whatovor, and shaJl bolong to the Unitod States, they hall not bo rotirod, cancelad, or destroyed, but ,aall be roissued and paid ouf again and tept in cireulation. The power to roirwio Unitod States notes was eouferml by aection 3,579, Bevised 8tatutes, and was not liniited by tho Resuraption act. Ah tuis, however, waa questioned, Conyross winely removed the doubt. Notes redeemed aro like othor notes receivod into the treasury. Paymenta of them can be mado only in conseqnencc oL appropriatious made by law, or for the purpose of bullion, or for the refunding of the public debt. The current rec-olpts from revenue are sufücient to meet the current expen'litures as well as the aecru ing interest on the public debt. Authority is coaforred by the Refundiug act to redeoni Ö per ceat bonds as they become redoemablo. by tho prooeods of the sale of bonds bearing a lower rate of intérest, Tiifi Uuited States notes redeemed undor the Ueeumption act are, therofore, the principal npeaue provided for the purchase of bulliou or coin viitb which to maintain resnmptiou. but should only bf paid out when they can bu usod to re pi ace an equa' umouxit of coin withdrawn from tho resumptioij fund, Tliey may, it is true. bc used for curreuf purposes like other money, but when so used theit place is ülled by money received irom taxea or other sourcea of revenue. lït daily business, no distinction need te made bet ween inoueys írom whatever hou ree received, but they may properly be applieil to any of the purposes authorizcd by law. No doubt coin liabil ities, such as interest or principal of the public .ïebt. will le ordinarily paid aud willingly received iu United States notos, but, when demauded, such payments will bo made ín coin: and United States notes and coiii will be used in the purchaso of bullion. ThiB method bas already been adopted in Colorado ard North Carolina, and arranco mont.are being perfected to purchase bullion in tuis way ín all the mining regions of the Uuited States. By the act approved June 8, 1878. the Secretary of the Treasury is authorized to constitute any superintendent of a mint or assayer of auy assay ornee an Assistant Treasurer of the TJníted States to re ceive gold cola or bullion on deposit. By the Legislativo AppToprlatlon bilí, approved Jnly 1Í. 1S7S, the Sccretary of the Treasury is authomod to issue coin cortiftcatea in pay ruimt to depositara oí bullion at tlïe Beyeral mints and aaesy offices of the United States. These proviaions. inten.ltd to secure to the producers of bullion more spéedy payment. will nooexsarily bring into the miuts and tn:aury the groat body of the precious metáis minod in thUnited States, aud will tend greatly to the efcsy and steady supply of bullion forcoinaRO, United States notes, wheu at par with coin. will be readily re ceived for bullion instead of coiu certificates, ant with great advantaye and couvenience to tho pro ducers. Deposita of coin in the treasnry will. no doubl continuo to ho made after the lstof Jauuary. aheretofore. Both ffold and silver coin, from il weight aud bulk. will natíirally scek sueh a saf deiosit, while notes redeemable in coin, from thei ïupcrior convenience, will be circulated iutead ACter ï-esumption. the distinction bctwecn coin and Uuited StattM ttotcs öliould bo, as far as practicable, abuadoupd in the current affaire of the Government; and, therefore. no coiu certificaos should be iHued except whcro expreealy requiretl by the provisions of law, as in tbe case of silver certiiicates. The gold cerüflcatefi hitherto Issned by virtue of the discretion conferred upon the Sccretary will not be issned after the lstof Jauuary next. The necessity for them dUring a Biispenaton of specie payments is obvious. tmt no longcr exists when by law every United .States noto i's. iu effect, a coin certiftcato. Tho onh purpose that could be auhjaejrved by their issiehereafter wonld be to cnable persons to convert their notos into coin certifica tes, and thna contract the i:urrency and hoard gold in the vaults of tho treasnry without ti;o iiK-onvcnieiice or risk of its nisudy. For convenience United States notes of the -ame denonimaüon as the íarger coin ccrtiöcates will be issned. By existing law custnnjs duties and tho interest :L the public dobt are payable in coin. and a portion of the duties was spociftcally pledcod as a special fund for tlie paymont of the interest, 'thns ruaking one provisión dtprndcnt upon the other. A.s we cannot, wilh due regard to the public honor. repeal tho obliation to pay cofa, we ouuhi not to tmpaír or repal the uoeana provided ío procure coin. When. happily, öur notc-s are equal to coin, thoy will be acceptcd as coin. both by tho public iTcditor and by tho Government bat this acceptnnce should be Icft to tlie optiun of the respccüve parties. and tho legal ri?ht on both tildes to deinand coin Bhould be proacffved inviolato. Tho Secretary is of the opinión that a chance of the law to not necessary to authóríze tliis departía ent to reeeivt! United States note for customd duties on and after the lst day of January, 1879, while thoy are redeemable and are redeemcd on demand in coin. After resumptiou it would seem a aseless inconvenieuce to requixe paymtnt of snel luties in coin rathcr thau m United States notes. The Resumption act, by clear impli catión, o far modifles previous laws as to permit paymentfl in United States notes as well as in coiu. The provisión for coin pay ment was made in tlu; mïdst of war when the notes were depreriatod and the public neeesaities reqxiired an assurod revenue in coin to support the public credit. This alont: jusÜaed the refusal by the Government to take its own notes for the taxes lovixl by it. It has now deüiiitely afisumed to pay these notes In coin, and thia tiweBöarlly implies tbO receipt of these notes as coin. To ref use them is only to invite their presentaron for coin. Any other constrnction would require the notes to be jesented to the Assistant Trtiasurer in Now York for coiu. and, if used in tho purchase of bonde, to be return ed Co the same officer, or, if nsed for the paymont of rustoms duties, to be carríed to the Collector of Custoxns, who must daily deposit iu the treasury all money received by him. It is not to be assumed that the law requires'this indirect and inconvoment process after tbe notes are redeemable in coin on demand of the holder. They are then at a parity with coin, and both should bo received indiscriminately. If Unitod States notes are received for duties at the port of New York, they should be vcceivod for the same purpose iu all other ports of the United States, or an unconstitutional preference would be viven to that port over other porta. If this privilege íb denied to the citizens of other ports, they could malie such use of theso notos only by transporüng them to New York and traneporting the coin to their homes for payment: and all this, not not only without benefit tü the Government, but with a loss in returning the coin acrain to New York, Vhere it is required for redemption purposea. Tlic provisión in the law for rrderaption In New York was bolievod to be practical redemption in all parts of the United States. Actual redemption was conñned to a single place from the necessity of niaintaining only one cuin reservo and whero the coin could be eaally accumulated and kopt. With this view of thö ItcKnmption act, the Seoretary will feel H to be hiH duty, unie Congrega othprwise provides, to direct that after the lst day of January next, and while Unitod States notes ars redéemed at the tirasury, they be received the sanie as coin by the ofïicers of this dopartraent iu all payincuts in all parts of the United States. If any fnrther provisión of law is deemed noceesary by Congtewi to authorize the receipt of United States notes for customs dúos or for bonds, the Secretary respcctfully submits that this authority should continue only while the notes are rodoemed in coin. However dosirabiecontinuousrefmmption ma be, and however confldent we may feel in its malntenftucp, yet the exporleuce of many nations has proven that it may be impossible in poriods of great emergency. In Buch tvonts tho public faith demanda that the custoras dutiea shall be collected ín coin and paid to the public creditors, and this pledge should never be violated or our ability to perform it ondangered. The tendency of late amons commercial nations is to the adoption of a single standard ol gold and the issue of silver for fractional coin. We may, by ignoring this tendency, give temporarily-increased value to tbe stores oL silver held in Gerraany and Franco until our niarket absorbs them, but by adopting a eilver standard as nearly equal to gold as practicable we make a market for our large prodiiction of Hilvcr, and furnish a full, honost dollar that will be hoarded, transportod, or circulated, without disparagement or reproach. It is respectfnlly submittcd that tho United States, already so largely interested ín trade with all parts of the world, and becömlnsc, by its population, wealth, commerceand productions a leading member of the family of nations, shdulcl not adopt a standard of less inü'insic valuo than other commercial natiou-j.