ernment, and thus largely
increase the demand for this stock. During nearly my first two years as
Secretary of the Treasury, the public moneys were deposited by me in the
State banks, secured by United States and State stocks, and there was no
loss. Nor, indeed, was there any loss or default by any officer, agent,
or employe of the Treasury Department during my entire term of four
years, notwithstanding the large loans and war expenditures.

Disbursing officers should also deposit with the banks, and pay as
formerly by checks on them, with the same guarantee by them of U. S.
stocks. How far, and to what extent, and under what special provisions
the gold received for customs might be deposited with these banks, may
be the subject of discussion hereafter.

If this system were adopted in its entirety, the process of absorbing
treasury notes would commence at once, and also a correspondent rise in
their market value. The system of loans and funding saved England from
bankruptcy during her long wars with France, and we must resort to
similar expedients. But as loans, in the usual way, except at ruinous
discounts, for any large amounts, are impracticable, we are left to the
alternative of the Secretary's system, or bankruptcy, repudiation, and
disunion.

I have another suggestion to make as regards these notes furnished by
the Government to the banks, secured by U. S. stocks. These notes are
guaranteed not only by the stock of the Government, but, in addition, by
the whole capital and property, real and personal, of the banks, and a
prior lien on the whole to the Government, to secure the payment of
these notes. These notes are receivable by the Government for all dues
except customs. These notes are a national currency, furnished by the
nation and secured by its stock.

These notes then, as in England, should be a legal tender in payment of
all debts, except by the banks. As the banks can redeem these issues in
legal tender treasury notes, these issues of the new banks ought to be a
legal tender also, except by the banks.

There is another reason why this currency should be made a legal tender.
Our two last suspensions of specie payments by the banks, viz., in 1857
and in 1860, were based upon _panics_, yet they had the same disastrous
effect, for the time, as if arising from short crops, overtrading, or a
currency greatly redundant. Such panic convulsions are caused mainly by
the call for the redemption of bank notes i