"Since resumption it has been the practice of the department to thus receive them, but this practice can be kept up only as long as parties holding interest obligations are willing to accept the same notes in payment thereof. If, by any unforseen and untoward event, the notes should again depreciate in value below coin, the obligations of the government would still require that interest on the public debt be paid in coin; and if customs dues were payable in legal tender notes, the department would have no source from which to obtain the coin necessary to the payment of interest, for of course holders of interest obligations would not accept a depreciated currency when they were entitled by law to coin."
I reminded the committee that in my report of December, 1878, I stated that on the 1st of January following I would receive United States notes for customs duties. As these notes were redeemable in coin, it was unreasonable to require the holder of notes to go to one government officer to get coin for his notes to pay customs duties to another government officer. I held that the United States notes had become coin certificates by resumption, and should be treated as such. I informed them that I issued the order with some reluctance, and only after full examination and upon the statement of the Attorney General, who thought technically I could treat the note as a coin certificate. I called their attention to the fact that I had informed Congress of my purpose to receive United States notes for customs duties and had asked specific authority to do so, but no action was taken, and I was assured that none was needed. The conversation that followed showed that they all agreed that what I did was right. It was evidently better not to provide by specific law that the United States notes should be receivable for customs dues, for in case of an emergency the law would be imperative, while, if the matter was left to the discretion of the Secretary of the Treasury, he could refuse to receive notes for customs dues and compel their payment in coin.
This led to a long colloquy as to whether the time might come when the United States notes could not be redeemed in coin. I entered into a full explanation of the strength of the government, the amount of reserve on hand, the nature of our ability, and said: "Still we know that wars may come, pestilence may come, an adverse balance of trade, or some contingency of a kind which we cannot know of in advance may arise. I therefore think it is wise to save the right of the United States to demand coin for customs duties if it should be driven to that exigency."
The question then arose as to the propriety of confining redemption of notes to one place. Mr. Wallace inquired whether the government notes should not be receivable and interchangeable at every government depositary. I answered that the notes should be received everywhere at par with coin, but I doubted the propriety of paying coin for United States notes except at one place and that in New York, the natural center for financial operations, where most of the customs dues were paid and where coin could be most safely hoarded.
Mr. Beck examined me at considerable length, and, with his usual Scotch tenacity, insisted, in spite of the attorney general, that I was not authorized to receive legal tender notes for customs dues. He asked me by what authority I claimed this power. I quoted the third section of the resumption act, and gave him a copy of my circular letter to officers of customs, dated on the 21st of December, 1878, in which, after calling attention to that section, I said:
"By reason of this act, you are authorized to receive United State notes, as well as gold coin and standard silver dollars, in payment of duties on imports, on and after the first day of January, 1879.
"Notes thus received will in every instance be deposited with the treasurer, or some assistant treasurer of the United States, as are other collections of such duties, to be redeemed, from time to time, in coin, on government account, as the convenience of the service may demand."
Mr. Beck then said:
"I desire to know, Mr. Secretary, whether it is not better, in your opinion, that the Congress of the United States should prescribe the duties of executive officers, so that they can act in pursuance of law, rather than the executive officer should be acting on his own notions of what is best?"
I replied: