perior power. The effect nevertheless was
serious and lasting. In the end, outside of banking and financial
centres, there was a strong and persistent demand for the repeal of
the Contraction Act.

The process of funding and paying the National debt, and of contracting
the currency, went on with vigor and persistency during the summer and
autumn of 1867. The Treasury statements for the year showed that up
to November 1, 1867, the long obligations of the Government had been
increased to $1,781,462,050; while the short obligations, other than
currency, had been reduced to $441,655,120.63, and the currency in
greenbacks, fractional notes and certificates of deposit for gold, to
$402,385,677.39. The Treasury held $133,998,398.02; so that the
National debt, less this cash, stood at $2,491,504,450. It thus
exhibited an average reduction of the debt from its maximum, August
31, 1865, to November 1, 1867, of more than $10,000,000 per month.

Gold was lower than it had been, but great disappointment was felt
because the premium, which had ranged in January, 1867, at 32-1/8 @
37-7/8, was in November 37-1/2 @ 48-5/8, and the latter figure was
higher than the quotation at the beginning of the first session of
the Thirty-ninth Congress. The charge was current, and was believed
by many, that the premium had been advanced by speculators to compel
Congress to enforce the policy of contraction. On the other hand, it
was declared to be demonstrably true that the reduction of the volume
of paper did not lower the premium on gold. It only depressed
production and placed the markets of every kind under the control of
reckless operators. Surely, it was argued, the contraction had been
severe enough to satisfy the advocates of the most stringent
Procrustean policy. The short obligations had been cut down
nearly one-half since January, 1866. If account were taken of
compound-interest notes the reduction in currency ought to be reckoned
at $100,000,000, and even at twice that sum, since the cash held by
the Treasury had been taken from the circulation of the country.

The Secretary of the Treasury still adhered to the policy of contraction,
and yet was charged with putting into circulation legal-tender notes
that had been once withdrawn, in order to affect the market. Thus in
August, 1866, between the 8th and the 23d inclusive, he had withdrawn
and destroyed $12,530,111, and of the 31st of that month he issued
$12,500,000. He ha