did not cheapen
them, but merely added to the profits of the countries producing them,
or of the middlemen in those countries, who have the exclusive trade
in them.

Second. The first section of the bill now under consideration provides
that the fractional currency shall be redeemed in silver coin as rapidly
as practicable. There is no provision preventing the fluctuation in the
value of the paper currency. With gold at a premium of anything over 10
per cent above the currency in use, it is probable, almost certain, that
silver would be bought up for exportation as fast as it was put out, or
until change would become so scarce as to make the premium on it equal
to the premium on gold, or sufficiently high to make it no longer
profitable to buy for export, thereby causing a direct loss to the
community at large and great embarrassment to trade.

As the present law commands final resumption on the 1st day of January,
1879, and as the gold receipts by the Treasury are larger than the
gold payments and the currency receipts are smaller than the currency
payments, thereby making monthly sales of gold necessary to meet current
currency expenses, it occurs to me that these difficulties might be
remedied by authorizing the Secretary of the Treasury to redeem
legal-tender notes, whenever presented in sums of not less than $100 and
multiples thereof, at a premium for gold of 10 per cent, less interest
at the rate of 2-1/2 per cent per annum from the 1st day of January,
1875, to the date of putting this law into operation, and diminishing
this premium at the same rate until final resumption, changing the
rate of premium demanded from time to time as the interest amounts to
one-quarter of 1 per cent. I suggest this rate of interest because it
would bring currency at par with gold at the date fixed by law for final
resumption. I suggest 10 per cent as the demand premium at the beginning
because I believe this rate would insure the retention of silver in the
country for change.

The provisions of the third section of the act will prevent combinations
being made to exhaust the Treasury of coin.

With such a law it is presumable that no gold would be called for not
required for legitimate business purposes. When large amounts of coin
should be drawn from the Treasury, correspondingly large amounts of
currency would be withdrawn from circulation, thus causing a sufficient
stringency in currency to stop the outward flow of coin.

T