years, hundreds of bills of almost every conceivable form to regulate the currency were introduced in Congress. Throughout the country the subject was continually discussed, not only during political campaigns and at public conventions, but in the smaller gatherings of the school district and the meetings of individuals by the wayside. Speeches and political pamphlets by the thousand, essays, campaign papers innumerable, and caricatures of almost every kind and description, upon the subject of the expansion and contraction of the currency, and its effect upon business, were distributed broadcast in all directions. Perhaps the most plausible argument which was presented, over and over again, in every portion of the country during these continued discussions, was in reference to the retirement of the national bank-notes, and the substitution therefor of treasury notes, in order, as was claimed, to save to the Government the interest upon the bonds held by the national banks as security for their circulating notes. Discussions of this subject in its various forms, and statements of the profits of the circulation of the national banks at different dates, may be found in the reports of the Comptroller of the Currency during the last nine years.

A recent and distinguished writer, discussing the policy of the legal-tender issues, says: "Grave differences of opinion exist, even to this day, concerning the necessity and expediency of the legal-tender provision. The judgment of many whose financial sagacity is entitled to respect is that if the internal tax had been first levied, and the policy adopted of drawing directly upon the banks from the treasury for the amounts of any loans in their hands, the resort by the Government to

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irredeemable paper might at least have been postponed and possibly prevented. The premium on gold became the measure of the depreciation of the government credit, and practically such premiums were the charge made for every loan negotiated. In his report of December, 1862, Secretary Chase justified the legal-tender policy. He explained that by the suspension of specic payments the banks had rendered their currency undesirable for government operations, and consequently no course other than that adopted was open. Mr. Chase declared that the measures of general legislation had worked well. For the fiscal year ending with June,' he said, 'every audited and settled claim on the Government, and every quartermaster's check for supplies furnished which had reached the treasury, had been met. For the subsequent months the Secretary' was enabled to provide, if not fully, yet almost fully, for the constantly increasing disbursements.'

"The political effects of the legal-tender bill were of large consequence to the Administration and to the successful conduct of the war. If it had been practicable to adhere rigidly to the specie standard, the national expenditure might have been materially reduced; but the exactions of the war would have been all the time grating on the nerves of the people and oppressing them with remorseless taxation. Added to the discouragement caused by our military reverses, a heavy financial burden might have proved disastrous. The Administration narrowly escaped a damaging defeat in 1862, and but for the relief to business which came from the circulation of legal-tender notes, the political struggle might have been hopeless. But as trade revived under

the stimulus of an expanding circulation, as the market for every species of product was constantly enlarging and prices were steadily rising, the support of the war policy became a far more cheerful duty to the mass of our people.

"This condition of affairs doubtless carried with it many elements of demoralization, but the engagement of the people in schemes of money-making proved a great support to the war policy of the Government. We saw the reproduction among us of the same causes and the same effects which prevailed in England during her prolonged contest with Napoleon. Money was superabundant; speculation was rife; the Government was a lavish buyer, a prodigal consumer. Every man who could work was employed at high wages; every man who had commodities to sell was sure of high prices. The whole community came to regard the prevalent prosperity as the outgrowth of the war. The ranks of the army could be filled by paying extravagant bounty after the ardor of volunteering was past, and the hardship of the struggle was thus in large measure concealed if not abated. Considerate men knew that a day of reckoning would come, but they believed it would be postponed until after the war was ended and the Union victorious.

"The policy of the legal-tender measure cannot therefore be properly determined if we exclude from view that which may well be termed its political and moral influence upon the mass of our people. It was this which subsequently gave to that form of currency a strong hold upon the minds of many who fancied that its stimulating effect upon business and trade could be

POLITICAL EFFECTS OF LEGAL TENDER. 147

reproduced under utterly different circumstances. Argument and experience have demonstrated the fallacy of this conception, and averted the evils which might have flowed from it. But in the judgment of a large and intelligent majority of those who were contemporary with the war and gave careful study to its progress, the legal-tender bill was a most effective and powerful auxiliary in its successful prosecution.'

99 1

1 Twenty Years of Congress. James G. Blaine. Vol. I., pp. 427429. Norwich, Conn.: The Henry Bill Publishing Company. 184.

CHAPTER X.

THE SILVER DOLLAR AND THE SILVER CERTIFICATE.

THE act of April 2, 1792, for establishing a mint and regulating the coinage of the United States, authorized the free coinage of a silver dollar of 412.5 grains, and this provision remained in force until 1873.

The act of June 28, 1834, which reduced the gold standard about six and one-fourth per cent., practically demonetized the silver coinage. Previous to the date of the passage of that act American gold and silver coins of all denominations were equally a legal tender, and the silver coins of less denomination than one dollar were chiefly in use, only $1,369,517 in silver dollars having been issued from the mint at that date. The act of 1834 overvalued the gold coinage, driving from the country the full-weight silver coins previously in circulation; and it may be confidently stated that from 1834 to 1873 no silver dollar-pieces had been presented at any custom-house in payment of duties. The entire customs-duties of the country during this period were, with the exception of silver used in change, paid in gold coin, and from this fund the interest paid upon the public debt has been chiefly derived; and it is not probable that during this time any of these silver dollar-pieces were used in this country in the payment of debt, except