Under our present system we should want none, nor would we have any, were it not that customs dues must be paid in coin and because of the pledge to pay interest on the public debt in coin.  The yield of precious metals would flow out for the purchase of foreign productions and the United States “hewers of wood and drawers of water,” because of wiser legislation on the subject of finance by the nations with whom we have dealings.  I am not prepared to say that I can suggest the best legislation to secure the end most heartily recommended.  It will be a source of great gratification to me to be able to approve any measure of Congress looking effectively toward securing “resumption.”

Unlimited inflation would probably bring about specie payments more speedily than any legislation looking to redemption of the legal-tenders in coin; but it would be at the expense of honor.  The legal-tenders would have no value beyond settling present liabilities, or, properly speaking, repudiating them.  They would buy nothing after debts were all settled.

There are a few measures which seem to me important in this connection and which I commend to your earnest consideration: 

A repeal of so much of the legal-tender act as makes these notes receivable for debts contracted after a date to be fixed in the act itself, say not later than the 1st of January, 1877.  We should then have quotations at real values, not fictitious ones.  Gold would no longer be at a premium, but currency at a discount.  A healthy reaction would set in at once, and with it a desire to make the currency equal to what it purports to be.  The merchants, manufacturers, and tradesmen of every calling could do business on a fair margin of profit, the money to be received having an unvarying value.  Laborers and all classes who work for stipulated pay or salary would receive more for their income, because extra profits would no longer be charged by the capitalists to compensate for the risk of a downward fluctuation in the value of the currency.

Second.  That the Secretary of the Treasury be authorized to redeem, say, not to exceed $2,000,000 monthly of legal-tender notes, by issuing in their stead a long bond, bearing interest at the rate of 3.65 per cent per annum, of denominations ranging from $50 up to $1,000 each.  This would in time reduce the legal-tender notes to a volume that could be kept afloat without demanding redemption in large sums suddenly.

Third.  That additional power be given to the Secretary of the Treasury to accumulate gold for final redemption, either by increasing revenue, curtailing expenses, or both (it is preferable to do both); and I recommend that reduction of expenditures be made wherever it can be done without impairing Government obligations or crippling the due execution thereof.  One measure for increasing the revenue—­and the only one I think of—­is the restoration of the duty on tea and coffee.  These duties would add probably $18,000,000 to the present amount received from imports, and would in no way increase the prices paid for those articles by the consumers.