I can not see that differences of opinion concerning the extent to which silver ought to be coined or used in our currency should interfere with the counsels of those whose duty it is to rectify evils now apparent in our financial situation. They have to consider the question of national credit and the consequences that will follow from its collapse. Whatever ideas may be insisted upon as to silver or bimetallism, a proper solution of the question now pressing upon us only requires a recognition of gold as well as silver and a concession of its importance, rightfully or wrongfully acquired, as a basis of national credit, a necessity in the honorable discharge of our obligations payable in gold, and a badge of solvency. I do not understand that the real friends of silver desire a condition that might follow inaction or neglect to appreciate the meaning of the present exigency if it should result in the entire banishment of gold from our financial and currency arrangements.
Besides the Treasury notes, which certainly should be paid in gold, amounting to nearly $500,000,000, there will fall due in 1904 one hundred millions of bonds issued during the last year, for which we have received gold, and in 1907 nearly six hundred millions of 4 per cent bonds issued in 1877. Shall the payment of these obligations in gold be repudiated? If they are to be paid in such a manner as the preservation of our national honor and national solvency demands, we should not destroy or even imperil our ability to supply ourselves with gold for that purpose.
While I am not unfriendly to silver and while I desire to see it recognized to such an extent as is consistent with financial safety and the preservation of national honor and credit, I am not willing to see gold entirely banished from our currency and finances. To avert such a consequence I believe thorough and radical remedial legislation should be promptly passed. I therefore beg the Congress to give the subject immediate attention.
In my opinion the Secretary of the Treasury should be authorized to issue bonds of the Government for the purpose of procuring and maintaining a sufficient gold reserve and the redemption and cancellation of the United States legal-tender notes and the Treasury notes issued for the purchase of silver under the law of July 14, 1890. We should be relieved from the humiliating process of issuing bonds to procure gold to be immediately and repeatedly drawn out on these obligations for purposes not related to the benefit of our Government or our people. The principal and interest of these bonds should be payable on their face in gold, because they should be sold only for gold or its representative, and because there would now probably be difficulty in favorably disposing of bonds not containing this stipulation. I suggest that the bonds be issued in denominations of twenty and fifty dollars and their multiples and that they bear interest at a rate not exceeding 3 per cent per annum. I do not see why they should not be payable fifty years from their date. We of the present generation have large amounts to pay if we meet our obligations, and long bonds are most salable. The Secretary of the Treasury might well be permitted at his discretion to receive on the sale of bonds the legal-tender and Treasury notes to be retired, and of course when they are thus retired or redeemed in gold they should be canceled.
These bonds under existing laws could be deposited by national banks as security for circulation, and such banks should be allowed to issue circulation up to the face value of these or any other bonds so deposited, except bonds outstanding bearing only 2 per cent interest and which sell in the market at less than par. National banks should not be allowed to take out circulating notes of a less denomination than $10, and when such as are now outstanding reach the Treasury, except for redemption and retirement, they should be canceled and notes of the denomination of $10 and upward issued in their stead. Silver certificates of the denomination of $10 and upward should be replaced by certificates of the denominations under $10.
As a constant means for the maintenance of a reasonable supply of gold in the Treasury, our duties on imports should be paid in gold, allowing all other dues to the Government to be paid in any other form of money.
I believe all the provisions I have suggested should be embodied in our laws if we are to enjoy a complete reinstatement of a sound financial condition. They need not interfere with any currency scheme providing for the increase of the circulating medium through the agency of national or State banks that may commend itself to the Congress, since they can easily be adjusted to such a scheme. Objection has been made to the issuance of interest-bearing obligations for the purpose of retiring the noninterest-bearing legal-tender notes. In point of fact, however, these notes have burdened us with a large load of interest, and it is still accumulating. The aggregate interest on the original issue of bonds, the proceeds of which in gold constituted the reserve for the payment of these notes, amounted to $70,326,250 on January 1, 1895, and the annual charge for interest on these bonds and those issued for the same purpose during the last year will be $9,145,000, dating from January 1, 1895.
While the cancellation of these notes would not relieve us from the obligations already incurred on their account, these figures are given by way of suggesting that their existence has not been free from interest charges and that the longer they are outstanding, judging from the experience of the last year, the more expensive they will become.
In conclusion I desire to frankly confess my reluctance to issuing more bonds in present circumstances and with no better results than have lately followed that course. I can not, however, refrain from adding to an assurance of my anxiety to cooperate with the present Congress in any reasonable measure of relief an expression of my determination to leave nothing undone which furnishes a hope for improving the situation or checking a suspicion of our disinclination or disability to meet with the strictest honor every national obligation.
GROVER CLEVELAND.