ovision was made contemplating their voluntary or compulsory
retirement. A large quantity of them, however, were kept on foot and
mingled with the currency of the country, so that at the close of the
year 1874 they amounted to $381,999,073.

Immediately after that date, and in January, 1875, a law was passed
providing for the resumption of specie payments, by which the Secretary
of the Treasury was required whenever additional circulation was issued
to national banks to retire United States notes equal in amount to 80
per cent of such additional national-bank circulation until such notes
were reduced to $300,000,000. This law further provided that on and
after the 1st day of January, 1879, the United States notes then
outstanding should be redeemed in coin, and in order to provide and
prepare for such redemption the Secretary of the Treasury was authorized
not only to use any surplus revenues of the Government, but to issue
bonds of the United States and dispose of them for coin and to use the
proceeds for the purposes contemplated by the statute.

In May, 1878, and before the date thus appointed for the redemption
and retirement of these notes, another statute was passed forbidding
their further cancellation and retirement. Some of them had, however,
been previously redeemed and canceled upon the issue of additional
national-bank circulation, as permitted by the law of 1875, so that the
amount outstanding at the time of the passage of the act forbidding
their further retirement was $346,681,016.

The law of 1878 did not stop at distinct prohibition, but contained in
addition the following express provision:

And when any of said notes may be redeemed or be received into the
Treasury under any law from any source whatever, and shall belong to
the United States, they shall not be retired, canceled, or destroyed,
but they shall be reissued and paid out again and kept in circulation.

This was the condition of affairs on the 1st day of January, 1879, which
had been fixed upon four years before as the date for entering upon the
redemption and retirement of all these notes, and for which such
abundant means had been provided.

The Government was put in the anomalous situation of owing to the
holders of its notes debts payable in gold on demand which could neither
be retired by receiving such notes in discharge of obligations due the
Government nor canceled by actual payment in gold. It was forced to
redeem wi