States notes issued under, and by virtue
of, said acts, shall present the same, for the purpose of exchanging
the same for bonds as therein provided, on or before the 1st day
of July, 1863, and thereafter the right so to exchange the same
shall cease and determine.'

"Thus, under the pressure of war, and the plausible pretext of a
statute of limitations, the most essential legal attribute of the
note was taken away. This act, though convenient in its temporary
results, was a most fatal step, and for my part in acquiescing in,
and voting for it, I have felt more regret than for any act of my
official life. But it must be remembered that the object of this
provision was not to prevent the conversion of notes into bonds,
but to induce their conversion. It was the policy and need of the
government to induce its citizens to exchange the notes freely for
the bonds, so that the notes might again be paid out to meet the
pressing demands of the war. It was believed that if this right
to convert them was limited, in time this would cause them to be
more freely funded; and Mr. Chase, then Secretary of the Treasury,
anxious to prevent a too large increase of the interest of the
public debt, desired to place in the market a five per cent. bond
instead of a six per cent. bond. The fatal error was in not changing
the right to convert the note into a five per cent. bond instead
of a six per cent. bond. This was, in fact, proposed in the
committee on finance, but it was said that a right to convert a
note into a bond at any time, was not so likely to be exercised as
if it could only be exercised at the pleasure of the government.
And this plausible theory to induce the conversion of notes into
bonds was made the basis, after the war was over, for the refusal
of the United States to allow the conversion of its notes into
bonds, and has been the fruitful cause of the continued depreciation
and dishonor of United States notes for the last five years, during
which, our five per cent. bonds have been at par with gold, while
our notes rise and fall in the gamut of depreciation from six to
twenty per cent. below gold.

"Notwithstanding that the right to convert notes into bonds was
taken away, yet, in fact, they were, during the war, received par
for par for bonds; and after the war was over all the interest-
bearing securities were converted into bonds; but the notes--the
money of the people--the artificial measure of value, the mos