, of providing currency for
the varying changes, the ebb and flow of trade.

I said that the legal tender quality given to United States notes
was intended to maintain them in forced circulation at a time when
their depreciation was inevitable. When they were redeemable in
coin this quality might either be withdrawn or retained, without
affecting their use as currency in ordinary times. But all experience
had shown that there were periods when, under any system of paper
money, however carefully guarded, it was impracticable to maintain
actual coin redemption. Usually contracts would be based upon
current paper money, and it was just that, during a sudden panic,
or an unreasonable demand for coin, the creditor should not be
allowed to demand payment in other than the currency upon which
the debt was contracted. To meet this contingency, it would seem
to be right to maintain the legal tender quality of the United
States notes. If they were not at par with coin it was the fault
of the government and not of the debtor, or, rather, it was the
result of unforseen stringency not contemplated by the contracting
parties.

In establishing a system of paper money, designed to be permanent,
I said it should be remembered that theretofore no expedient had
been devised, either in this or other countries, that in times of
panic or adverse trade had prevented the drain and exhaustion of
coin reserves, however large or carefully guarded. Every such
system must provide for a suspension of specie payment. Laws might
forbid or ignore such a contingency, but it would come; and when
it came it could not be resisted, but had to be acknowledged and
declared, to prevent unnecessary sacrifice and ruin. In our free
government the power to make this declaration would not be willingly
intrusted to individuals, but should be determined by events and
conditions known to all. It would be far better to fix the maximum
of legal tender notes at $300,000,000, supported by a minimum
reserve of $100,000,000, of coin, only to be used for the redemption
of notes, not to be reissued until the reserve was restored. A
demand of coin to exhaust such a reserve might not occur, but, if
events should force it, the fact would be known and could be
declared, and would justify a temporary suspension of specie
payments. Some such expedient could, no doubt, be provided by
Congress for an exceptional emergency. In other times the general
confidence in thes