Government would be united, and just as you strengthened the banks and increased their capital and profits, would you fund more and more treasury notes, and save us from the ruin of a redundant and depreciated currency.

The Secretary proposes to make these banks depositories of treasury notes, received by the Government for all dues except customs. This is well; for to use the sub-treasury to receive and circulate treasury notes, is against the object for which it was created. Such deposits should be secured by U. S. stocks with the Government, 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 employé 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 in specie, based on the fear of suspension and depreciation. But if such notes, as in European government banks, were a legal tender, except by the banks, such panics would be far less frequent here, and less injurious. The present system, as compared with that of Europe, discriminates most unjustly against our country. As a general rule, the American creditor cannot demand gold from the foreign debtor, but such foreign or domestic creditor could always demand gold from the American debtor. This discrimination has produced here the most disastrous consequences, and, independent of the present condition of the country, our whole banking system requires radical reform. We have had eight general bank suspensions under our present bank system, many of them continuing for years, and producing ruin and desolation. Under our present system, to talk, as a general rule, of well-regulated banks, is to talk of a well-regulated famine or pestilence, or of a well-regulated earthquake or tornado. And even the few banks that are claimed to be well managed, have no appreciable effect on the system. It is the system that knows no uniformity or security, and never can have, as now organized. That a system so perilous and explosive, should have even partially succeeded is proof only of the intelligence and integrity, generally, of the bank officers and directors, but no recommendation of the system itself.

The want of uniformity as to commercial regulations, led to the adoption of our Federal Constitution; and yet we have no uniformity as to money, which represents commerce and effects its interchanges. In this respect, we are still suffering all the evils of the old confederacy, and have thereby so weakened the Government as to have invited this rebellion. Indeed, the State banks in the revolted States were the main auxiliaries of treason and secession, and supplied, to a vast extent, the sinews of war. By Census Table 34, there were in 1860, 1,642 banks, incorporated by thirty-four States, with no uniformity of organization, issues, or security. Thus is it that the States have usurped the power to regulate commerce and currency, and to emit bills of credit, in defiance of the prohibition of the Federal Constitution. The Egyptians abandoned their folly after seven plagues; but we have had eight bank convulsions, and yet we adhere to the wretched system.

I believe it was slavery caused the rebellion, but, in the absence of powerful aid from the Southern banks, the revolted States could never have maintained so prolonged a contest. Organized as now proposed, these new banks, and all who held their notes, must have sustained the Government. Nations expend millions yearly in erecting forts and maintaining, even in peace, large armies and navies to preserve the Government. But necessary as these may be, they would not be more important than the system now proposed as a security for the preservation of the Government.

My last suggestion is, that as regards all such United States loans, as during the war shall become the basis of this system, the time of payment shall be made twenty years instead of five, so as, with the modifications above proposed, to insure the coöperation of the banks, and the success of the system. As this plan is deemed essential to save our finances, to suppress the rebellion, and maintain the Union, why incur any hazard on such a question as this? In all our wars, including the present, we have issued bonds running twenty years to maturity, and the bonds, redeemable in 1881, are scarcely at par. Why, then, issue a stock of less value, which may fail to accomplish the great object, when a better security would certainly succeed? I fully agree in the opinion expressed by the Secretary, against 'a fixed interest of six per cent. on a great debt, for twenty years,' if it can be avoided; but I also concur in that portion of his report in which he says: 'No very early day will probably witness the reduction of the public debt to the amount required as a basis for secured circulation.' To that extent, then, would I enlarge the time for the maturity of the bonds. Surely, if this be necessary to secure the coöperation of the banks, and the capital of the country, there should be no hesitation. Even if the system, based only on the bonds of short date, should ultimately succeed, the loss, in the interim, from a redundant and depreciated currency, would far exceed any benefit derived from the substitution of five-twenties for twenty year bonds. By Census Table 35, our wealth in 1850, was $7,135,780,228, and in 1860, $16,159,616,068, the ratio of increase during the decade being 126.45 per cent.; at which rate, our wealth in 1870 would be $36,583,450,585, and in 1880, $82,843,222,849. Surely, then, at these periods, it would be much easier to liquidate this debt than in 1867. But, were it otherwise, the immediate gain from decreased expenditures, arising from funding more rapidly our treasury notes, thus