There are still in existence, uncanceled, $346,681,016 of United States legal-tender notes. These notes were authorized as a war measure, made necessary by the exigencies of the conflict in which the United States was then engaged. The preservation of the nation's existence required, in the judgment of Congress, an issue of legal-tender paper money. That it served well the purpose for which it was created is not questioned, but the employment of the notes as paper money indefinitely, after the accomplishment of the object for which they were provided, was not contemplated by the framers of the law under which they were issued. These notes long since became, like any other pecuniary obligation of the Government, a debt to be paid, and when paid to be canceled as mere evidence of an indebtedness no longer existing. I therefore repeat what was said in the annual message of last year, that the retirement from circulation of United States notes with the capacity of legal tender in private contracts is a step to be taken in our progress toward a safe and stable currency which should be accepted as the policy and duty of the Government and the interest and security of the people.
At the time of the passage of the act now in force requiring the coinage of silver dollars, fixing their value, and giving them legal-tender character it was believed by many of the supporters of the measure that the silver dollar which it authorized would speedily become, under the operations of the law, of equivalent value to the gold dollar. There were other supporters of the bill, who, while they doubted as to the probability of this result, nevertheless were willing to give the proposed experiment a fair trial, with a view to stop the coinage if experience should prove that the silver dollar authorized by the bill continued to be of less commercial value than the standard gold dollar.
The coinage of silver dollars under the act referred to began in March, 1878, and has been continued as required by the act. The average rate per month to the present time has been $2,276,492. The total amount coined prior to the 1st of November last was $72,847,750. Of this amount $47,084,450 remain in the Treasury, and only $25,763,291 are in the hands of the people. A constant effort has been made to keep this currency in circulation, and considerable expense has been necessarily incurred for this purpose; but its return to the Treasury is prompt and sure. Contrary to the confident anticipation of the friends of the measure at the time of its adoption, the value of the silver dollar containing 412-1/2 grains of silver has not increased. During the year prior to the passage of the bill authorizing its coinage the market value of the silver which it contained was from 90 to 92 cents as compared with the standard gold dollar. During the last year the average market value of the silver dollar has been 88-1/2 cents.
It is obvious that the legislation of the last Congress in regard to silver, so far as it was based on an anticipated rise in the value of silver as a result of that legislation, has failed to produce the effect then predicted. The longer the law remains in force, requiring, as it does, the coinage of a nominal dollar which in reality is not a dollar, the greater becomes the danger that this country will be forced to accept a single metal as the sole legal standard of value in circulation, and this a standard of less value than it purports to be worth in the recognized money of the world.
The Constitution of the United States, sound financial principles, and our best interests all require that the country should have as its legal-tender money both gold and silver coin of an intrinsic value, as bullion, equivalent to that which upon its face it purports to possess. The Constitution in express terms recognizes both gold and silver as the only true legal-tender money. To banish either of these metals from our currency is to narrow and limit the circulating medium of exchange to the disparagement of important interests. The United States produces more silver than any other country, and is directly interested in maintaining it as one of the two precious metals which furnish the coinage of the world. It will, in my judgment, contribute to this result if Congress will repeal so much of existing legislation as requires the coinage of silver dollars containing only 412-1/2 grains of silver, and in its stead will authorize the Secretary of the Treasury to coin silver dollars of equivalent value, as bullion, with gold dollars. This will defraud no man, and will be in accordance with familiar precedents. Congress on several occasions has altered the ratio of value between gold and silver, in order to establish it more nearly in accordance with the actual ratio of value between the two metals.
In financial legislation every measure in the direction of greater fidelity in the discharge of pecuniary obligations has been found by experience to diminish the rates of interest which debtors are required to pay and to increase the facility with which money can be obtained for every legitimate purpose. Our own recent financial history shows how surely money becomes abundant whenever confidence in the exact performance of moneyed obligations is established.
The Secretary of War reports that the expenditures of the War Department for the fiscal year ended June 30, 1880, were $39,924,773.03. The appropriations for this Department for the current fiscal year amount to $41,993,630.40.
With respect to the Army, the Secretary invites attention to the fact that its strength is limited by statute (U.S. Revised Statutes, sec. 1115) to not more than 30,000 enlisted men, but that provisos contained in appropriation bills have limited expenditures to the enlistment of but 25,000. It is believed the full legal strength is the least possible force at which the present organization can be maintained, having in view efficiency, discipline, and economy. While the enlistment of this force would add somewhat to the appropriation for pay of the Army, the saving made in other respects would be more than an equivalent for this additional outlay, and the efficiency of the Army would be largely increased.
The rapid extension of the railroad system west of the Mississippi River and the great tide of settlers which has flowed in upon new territory impose on the military an entire change of policy. The maintenance of small posts along wagon and stage routes of travel is no longer necessary. Permanent quarters at points selected, of a more substantial character than those heretofore constructed, will be required. Under existing laws permanent buildings can not be erected without the sanction of Congress, and when sales of military sites and buildings have been authorized the moneys received have reverted to the Treasury and could only become available through a new appropriation. It is recommended that provision be made by a general statute for the sale of such abandoned military posts and buildings as are found to be unnecessary and for the application of the proceeds to the construction of other posts. While many of the present posts are of but slight value for military purposes, owing to the changed condition of the country, their occupation is continued at great expense and inconvenience, because they afford the only available shelter for troops.
The absence of a large number of officers of the line, in active duty, from their regiments is a serious detriment to the maintenance of the service. The constant demand for small detachments, each of which should be commanded by a commissioned officer, and the various details of officers for necessary service away from their commands occasion a scarcity in the number required for company duties. With a view to lessening this drain to some extent, it is recommended that the law authorizing the detail of officers from the active list as professors of tactics and military science at certain colleges and universities be so amended as to provide that all such details be made from the retired list of the Army.