while the three per cent certificates and the Navy
pension-fund, which alone carried interest in currency, amounted to
$61,195,000. The debt bearing no interest, composed of old
demand-notes, legal-tenders, fractional currency, and certificates for
gold deposited, had fallen to $431,861,763. The seven-thirty notes had
disappeared from the financial statement, and the bonds authorized by
the Act of March 3, 1865, amounted to $958,455,700. The rate of
interest on the bonds still stood at six per cent, except on the old
debt of 1858 and 1860, and upon $194,567,300 of the ten-forties issued
under the Act of March 3, 1864. One of the chief recommendations in
the President's message was the refunding of the debt in bonds, with
interest not exceeding four and a half per cent. He urged legislation
for redeeming the legal-tenders at their market value, at the option
of the holder, increasing the rate from day to day or week to week.
He believed "that immediate resumption, even if practicable, would not
be desirable," but that "a return to a specie basis should be
commenced immediately." He expressed the belief that the revenue might
be at once reduced $60,000,000 or possibly $80,000,000 a year. In
connection with this feature of the message, Secretary Boutwell
submitted a well-matured plan for funding the debt and expressed entire
confidence in its success.

The result was the refunding Act of July 14, 1870. It was a broad and
effective measure. It was subsequently modified by the Act of Jan. 20,
1871, permitting the payment of interest quarterly, and increasing the
amount of bonds bearing five per cent interest. The two laws for
purposes of refunding, taken together, authorized the issue of
$500,000,000 at five per cent, $300,000,000 at four and a half per
cent, and $1,000,000,000 at four per cent,--all to be payable in coin,
to be exempt from taxation, and to be issued without any increase of
the debt. The fives were redeemable after ten years, the four-and-a-halfs
after fifteen years, the fours after thirty years. The laws were
not enacted without considerable legislative controversy. The
exemption from taxation and the payment in coin were stubbornly
though unsuccessfully resisted. A proposition to state the interest
in sterling money and in francs, as well as in dollars, so that the
bonds might be more easily negotiated abroad, was vigorously pressed,
but was happily defeated.

Further reduction of the reve