Be it enacted, etc., 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 law 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 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 in other currency than gold and silver; but none of the 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.

This act still remains as a continuing pledge of the faith of the United States “to make provision at the earliest practicable period for the redemption of the United States notes in coin.”

A declaration contained in the act of June 30, 1864, created an obligation that the total amount of United States notes issued or to be issued should never exceed $400,000,000.  The amount in actual circulation was actually reduced to $356,000,000, at which point Congress passed the act of February 4, 1868, suspending the further reduction of the currency.  The forty-four millions have ever been regarded as a reserve, to be used only in case of emergency, such as has occurred on several occasions, and must occur when from any cause revenues suddenly fall below expenditures; and such a reserve is necessary, because the fractional currency, amounting to fifty millions, is redeemable in legal tender on call.

It may be said that such a return of fractional currency for redemption is impossible; but let steps be taken for a return to a specie basis and it will be found that silver will take the place of fractional currency as rapidly as it can be supplied, when the premium on gold reaches a sufficiently low point.  With the amount of United States notes to be issued permanently fixed within proper limits and the Treasury so strengthened as to be able to redeem them in coin on demand it will then be safe to inaugurate a system of free banking with such provisions as to make compulsory redemption of the circulating notes of the banks in coin, or in United States notes, themselves redeemable and made equivalent to coin.

As a measure preparatory to free banking, and for placing the Government in a condition to redeem its notes in coin “at the earliest practicable period,” the revenues of the country should be increased so as to pay current expenses, provide for the sinking fund required by law, and also a surplus to be retained in the Treasury in gold.