“‘Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled: That on and after the first day of December, 1868, the Secretary of the Treasury be, and he is hereby, authorized and directed to pay gold coin of the United States for any legal-tender notes of the United States, which may be presented at the office of the Assistant Treasurer, at New York, at the rate of one dollar in gold for one dollar and thirty cents in legal-tender notes. On and after the first day of January, 1869, the rate shall be one dollar in gold for one dollar and twenty-nine cents in legal-tender notes; and at the beginning of and during each succeeding month, the amount of legal-tender notes required in exchange for one dollar in gold shall be one cent less than the amount required during the preceding month, until the exchange becomes one dollar in gold for one dollar in legal-tender notes; and on and after the first day of June, 1871, the Secretary of the Treasury shall exchange gold for legal-tender notes, dollar for dollar. Provided: That nothing in this act shall be so construed as to authorize the retirement or cancellation of any legal-tender notes of the United States.’
“I do not doubt that, in anticipation of the operation of this measure, should it become a law, gold would be at 130, or lower, by the 1st of December, and that very little would be asked for from the Treasury, in exchange for currency. At the beginning of each succeeding month the exchange between gold and greenbacks would be reduced one cent, and specie payments would be fully resumed in June, 1871. That the country is fully able to resume by that time will hardly be denied.
“With the $100,000,000 of gold now in the Treasury, and the amount received from customs, which averages nearly half a million per day, it is not at all probable that we should need to borrow a dollar in order to carry out the provisions of the law.
“But taking the most unfavorable aspect of the case, and supposing that the Government should find it necessary to authorize a gold loan, the expense would be trifling compared with the resulting benefits to the country. The proposed measure would incidentally bring all the national banks to the aid of the Government in the work of resumption. The banks are required by law to redeem their own notes in greenbacks. They now hold in their vaults, as a reserve required by law, $162,000,000, of which sum $114,000,000 are greenbacks. Being compelled to pay the same price for their own notes as for greenbacks, they would gradually accumulate a specie reserve, and would be compelled to keep abreast with the Government in every step of the progress toward resumption. The necessity of redeeming their own notes would keep their circulation nearer home, and would more equally distribute the currency of the country which now concentrates at the great money centers, and produces scarcity in the rural districts.
“This measure would not at once restore the old national standard of value, but it would give stability to business and confidence to business men every-where. Every man who contracts a debt would know what the value of a dollar would be when the debt became due. The opportunity now afforded to Wall Street gamblers to run up and run down the relative price of gold and greenbacks would be removed. The element of chance, which now vitiates our whole industrial system, would, in great part, be eliminated.
“If this measure be adopted it will incidentally settle several of our most troublesome questions. It will end the war between the contractionists and the inflationists—a war which, like that of Marius and Sylla, may almost prove fatal to the interests of the country, whichever side may prevail. The amount of paper money will regulate itself, and may be unlimited, so long as every dollar is convertible into specie at the will of the holder.
“The still more difficult question of paying our five-twenty bonds would be avoided—completely flanked by this measure. The money paid to the wounded soldier, and to the soldier’s widow, would soon be made equal in value to the money paid to all other creditors of the Government.
“It will be observed that the bill does not authorize the cancellation or retirement of any United States notes. It is believed that, for a time at least, the volume of the currency may safely remain as it now is. When the measure has been in force for some time, it will be seen whether the increased use of specie for purposes of circulation will not allow a gradual reduction of the legal-tender notes. This can be safely left to subsequent legislation. It will facilitate the success of this plan if Congress will pass a bill to legalize contracts hereafter made for the payment of coin. If this be done, many business men will conduct their affairs on a specie basis, and thus retain at home much of our gold that now goes abroad.