Rensselaer Union, Volume 6, Number 38, Rensselaer, Jasper County, 11 June 1874 — President Grant’s Views on the Financial Question. [ARTICLE]

President Grant’s Views on the Financial Question.

Wabhinotoit, June 5. Senator Jones has obtained permiiaion Jrom President Grant to publish the following memorandum prepared by the latter, expressing his views upon the financial question. The President says: I believe it a high and plain duty to return to a specie basis at the earliest practicable day, not only in compliance with legislative and party pledges, but as a step indispensable to lasting national prosperity. I believe, further, that the time has come when this can be done, or at least be begun, with less embarrassment to every branch of industry than at any future time, afer resort has been had to unstable and temporary expedients to stimulate unreal prosperity and speculation on a basis other than coin, the recognized medium of exchange throughout the commercial world. The particular mode selected to bring about a restoration of the specie standard is not of so much consequence as that some adequate plan be devised, a time fixed when the currency shall be exchangeable for coin at par, and a plan adopted and rigidly adhered to. It is not probable that any legislation suggested by me would prove acceptable to both branches of Congress, and, indeed, a full discussion might shake my own faith in the details of any plan I might propose. I will, however, venture to state the general features of action which seem to me advisable, tbe financial platform on which I would stand, and any departure from which would be in a spirit of concession and harmony in deference to conflicting opinions: 1. I would like to see the legal-tender clause, so-called, repealed ; the repeal to take effect at some future time, say July 1, 1875. This would cause all contracts made after that dafe for wages, sales, etc., to be estimated in coin ; it would correct our notions of values; the specie dollar would be the only dollar known as tbe measure of equivalents. When debts afterward contracted were paid In currency, instead of calling a paper dollar A dollar and quoting gold at so mnch premium, we should think and speak of paper as at so much discount. This alone would aid greatly in bringing tbe two currencies nearer together at par. 2. I would like to see a provision that at a fixed dav, say July 1,1876, thscurrency issued by tbe United States should be redeemed in coin on presentation to any assistant-treasurer, and that all currency so redeemed should be canceled and never reissued. To efiTect this it would be necessary to authorize the issue of bonds nayable in gold, bearing such interest as would command par in gold, to be put out by the Treasury only in such sums as should from time to time be needed for the purpose of redemption. Such legislation would insure a return to sound financial principles in two years, and would, in my judgment, work less hardship to the debtor interest than is likely to come from putting off the day ot final reckoning. It must be borne in mind, too, that tbe creditor interest had its day of disadvantage also when our present flnaneial system was brought in by the supreme needs of the nation at the time. I would further provide that, from and after the date fixed for redemption, no bills, whether of national banks or of the United States, returned to the Treasury to be exchanged for new bills, should be replaced by bills of less denomination than ten dollars, and that in one year after resumption all bills of less than five dollars should be withdrawn from circulation, and In two years all bills of less than ten dollars should be withdrawn. The advantage of this would be the strength 1 given to the country against a time of depression resulting from war, faiinre of the crops, or any other cause, by keeping always in the bands of the people a large supply of precious metals. With all the smallar transactions conducted in coin, many millions ot it would be kept in constant use, and, of course, prevented from leaving the country. Undoubtedly a poorer currency will always drive the better out of circulation. With paper a legal tender and at a discount: gold ana silver become articles of merchandise as much as wheat or cotton. The surplus will find the best market it can. With small bills in circulation there is no use for ooin except to keep it in the vaults of banks to redeem circulation. Daring periods of great speculation and apparent prosperity there is little demand for coin, and then it will flow out to a market where it can be made to earn something, which it cannot do while lying idle. Gold, like anything else, when not needed becomes a surplus, and like every other surplus it seeks a market where it can find one. By giving it active employment, however, its presence can, it seems to me, be secured, and panics and depressions which have occurred periodically in times of nominal specie payments, if they cannot be wholly prevented, can at least be greatly mitigated. Indeed, I question whether it would have been found necessary to depart from the standard of specie in the trying days which gave birth to the first Legal-Tender act had the country taken the ground of no small hills os early as 1850. Again, I would provide an excess of revenue over current expenditures. I would do this by rigid economy and by taxation where taxation can best be" borne. Increased revenue would work a constant reduction of the debt and interest and would provide coin to meet the demands on tbe Treasury for redemption qf its notes, thereby diminishing the amount of bonds needed for that purpose. All taxes after redemption begins should be paid in coin or United States notes. This would force redemption on the national banks. With measures like these, or measures which would work out such results, I see no danger in authorizing free banking without limit. .