paralyzed
legislation. But one vital question had been settled, that no
further contraction of the currency should occur; and it was well
settled, though not embodied in law, that no question would be made
as to the payment of bonds in coin.

While Congress was drifting to a sound financial policy, the
President and his Secretary of the Treasury were widely divergent,
the former in favor of repudiation, and the latter in favor of
paying and canceling all United States notes.

President Johnson, in his last annual message to Congress, on the
9th of December, 1868, substantially recommended a repudiation of
the bonds of the United States, as follows:

"Upon this statement of facts it would seem but just and equitable
that the six per cent. interest now paid by the government should
be applied to the reduction of the principal in semi-annual
installments, which in sixteen years and eight months would liquidate
the entire national debt. Six per cent. in gold would, at present
rates, be equal to nine per cent. in currency, and equivalent to
the payment of the debt one and half times in a fraction less than
seventeen years. This, in connection with the other advantages
derived from their investment, would afford to the public creditors
a fair and liberal compensation for the use of their capital, and
with this they should be satisfied. The lessons of the past admonish
the lender that it is not well to be over anxious in exacting from
the borrower rigid compliance with the letter of the bond."

While the President wished to apply the interest on the United
States bonds to the redemption of the principal, the Secretary of
the Treasury was pressing for the restoration of the specie standard.
I quote from his report to Congress, made on the same day the
message of the President was sent us:

"The first and most important of these measures are those which
shall bring about, without unnecessary delay, the restoration of
the specie standard. The financial difficulties under which the
country is laboring may be traced directly to the issue, and
continuance in circulation, of irredeemable promises as lawful
money. The country will not be really and reliably prosperous
until there is a return to specie payments. The question of a
solvent, convertible currency, underlies all the other financial
and economical questions. It is, in fact, a fundamental question;
and until it is settled, and settled in accordance with the tea