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surances from empirics and scientists in finance that remonetization of the former dollar will at once and permanently advance its value to par with gold are worth little in the face of opposing and That remonetization will have a controlling facts. considerable effect in advancing the value of the silver dollar is very probable, but not enough to overcome the difference now existing a difference resulting from causes independent of our control on this continent.

"I believe the public creditor can afford to be paid in any silver dollar that the United States can afford to coin and circulate. We have forty thousand millions of property in this country, and a wise self-interest will not permit us to overturn its relations by seeking for an inferior dollar wherewith to settle the honest demand of any creditor. The question might be different from a merely selfish point of view if, on paying the dollar to the public creditor, it would disappear after performing that function. But the trouble is that the inferior dollar you pay the public creditor remains in circulation to the exclusion of the better dollar. That which you pay at home will stay here; that which you send abroad will come back.

"The interest of the public creditor is indissolubly bound up with the interest of the whole people. Whatever affects him affects us all; and the evil that we might inflict upon him by paying an inferior dollar would recoil upon us with a vengeance as manifold as the aggregate wealth of the Republic transcends the comparatively small limits of our bonded debt. Remember that our aggregate wealth is always increasing, and that our bonded debt is steadily growing less. If paid in a good silver dollar the bondholder has nothing to complain of. If paid in an inferior silver dollar he has the same grievance that will be uttered still more plaintively by the holder of the national bank bill, by the pensioner, by the day laborer, and by the countless host of the poor, whom we have with us always, and on whom the most distressing effect of inferior money will be ultimately precipitated."

With such expressions from Mr. Blaine against free coinage independent of the co-operation of other nations, it will hardly afford the silver forces much comfort to draw this great statesman into the controversy. And incidentally Mr. Blaine answers many of the arguments used to-day by the advocates of free coinage.

BONDS OF THE UNITED STATES.

History of their Issue and Amounts.

According to the statement of the public debt published October 31, 1865, the interest-bearing debt of the United States on that date was as follows:

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Besides the interest-bearing debt then outstanding there was a

considerable debt bearing no interest, as follows:

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And the debt, less cash in the Treasury, was.... 2,739,596,758 8G

The foregoing tables do not include bonds issued in aid of Pacific railroads.

The first three items in the above table of debt bearing coin interest represent obligations which were negotiated prior to the suspension of specie payments, January 1, 1862, and were therefore sold for gold. A portion of these bonds were sold at a discount, the aggregate amount of such discount being $7,358,544.19. All the remainder of the obligations stated in the above tables were sold at not less than par in United States notes.

Soon after the close of the war the revenues began to exhibit a surplus over expenditures. The surplus was applied from time to time to the redemption of short-term obligations, which coǹsisted of debt bearing interest in lawful money (United States notes). Such portion of these obligations as could not be redeemed for lack of funds was converted into 5-20 bonds, as authorized by the act of March 3, 1865. These transactions were completed by May 1, 1869. The Government then began using the surplus revenues in the purchase of its unmatured bonds at the market price in currency. The average price paid in May, 1869, was 115.84, which was equivalent to 82.72 in gold, or a discount of 17.28. These purchases were continued until September, 1873. The total amount purchased was $323,253,800; the net cost in currency was $362,981,483.79 and the net cost in gold was $307,702,207.64. The average price in currency was 112.27 and the average price in gold was 95.19.

CREDIT-STRENGTHENING ACT.

During the war the necessities of the Government compelled the borrowing of money in many different ways. Some of the obligations issued for money so borrowed were admittedly payable in lawful money but other obligations, such as the 5-20 bonds, while bearing interest payable, under the laws authorizing them, in coin, contained no specific statement as to the kind of money in which the principal should be paid at maturity. In this respect these bonds did not differ from all the other bonds issued since 1791, since none of them contained any provision as to the kind of money in which they should be paid; but, before the war, gold and silver coins were the only recognized legal-tender money, while after the war the existence of the legaltender United States notes gave rise to discussion as to the power of the Government to liquidate all its debts in paper money. To settle the conflicting questions arising from this discussion, Congress passed the act entitled "An act to strengthen the public credit," which was approved March 18, 1869. The text of the act was as follows:

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That in order to remove any doubt as to the purpose of the Government to discharge all just obligations to the public creditors, and to settle conflicting questions and interpretations of the laws by virtue of which such obligations have been contracted, it is hereby provided and declared that the faith of the United States is solemnly pledged to the payment in coin or its equivalent of all the obligations of the United States not bearing interest, known as United States notes, and of all the interest-bearing obligations of the United States, except in cases where the law authorizing the issue of any such obligation has expressly provided that the same may be paid in lawful money or other currency than gold and silver. But none of said interest-bearing obligations not already due shall be redeemed or paid before maturity unless at such time United States notes shall be convertible into coin at the option of the holder, or unless at such time bonds of the United States bearing a lower rate of interest than the bonds to be redeemed can be sold at par in coin. And the United States also solemnly pledges its faith to make provision at the earliest practicable period for the redemption of the United States notes in coin. Approved, March 18, 1869.

By this act the United States solemnly pledged its faith to the payment of all its obligations in coin, except those which were specifically payable in some other currency; but in order to prevent improper speculation in the public debt it was provided that the Government should not redeem any of its obligations in coin before their maturity, unless at the same time it should be able to redeem United States notes in coin, or until the public credit should have become so good that the Government could sell bonds bearing lower rates of interest at par in coin.

Refunding. The refunding act of July 14, 1870, authorized the sale, at not less than par in coin, of 5 per cent ten-year bonds, 4% per cent fifteen-year bonds, and 4 per cent thirty-year bonds, the proceeds to be applied to the redemption of the war debt. The refunding operations under this act began in 1871 and continued until the summer of 1879. At first the sales were confined to the 5 per cent bonds. In 1876, when the credit of the United States had sufficiently improved, the 42 per cent bonds were offered for sale; and in 1877 they were withdrawn and the 4 per cents of 1907 were substituted. All these classes of bonds were sold at not less than par for gold or its equivalent, and the proceeds were used in redeeming, in gold, an equal amount of the bonds representing the war debt.

The classes of bonds sold for refunding and the bonds redeemed, with the proceeds, are shown in the following tables:

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A considerable amount of 5 per cent bonds (about sixty-five millions) was exchanged at the beginning of the refunding operations, bond for bond, for per cents. These exchanges are included in the

above tables.

The annual saving of interest to the Government by the refunding operations was $19,900,846.50.

The greater part of the war debt was sold for currency. Bonds amounting to $1,395,345,950 were redeemed in gold, and the gold with which they were redeemed was obtained from the purchasers of other bonds bearing lower rates of interest.

The refunding operations included all the bonds which up to 1879 had become redeemable. Meanwhile resumption of specie payments had brought all the business of the country to the coin basis. As the remaining war debt matured it was either continued at a lower rate of interest or redeemed in gold. The continued bonds were also redeemed from time to time, as the surplus revenues permitted, until no bonds remained outstanding except those authorized by the refunding acts. These last-mentioned bonds and all the bonds now outstanding are payable in "coin."

The foregoing statement does not include the bonds, payable in lawful money, which were issued in aid of Pacific railroads.

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