rded as a fair statement of public affairs
at a time of unusual prosperity. The revenue in excess of expenditures
during the year amounted to $20,799,551.90.

The statement made by me in this report, in respect to the resumption
of specie payments on the 1st day of January, 1879, is so closely
a narrative of what did happen before and after that date that I
deem it best to quote the language of the report. I then said:

"The important duty imposed on this department by the resumption
act, approved January 14, 1875, has been steadily pursued during
the past year. The plain purpose of the act is to secure to all
interests and all classes the benefits of a sound currency, redeemable
in coin, with the least possible disturbance of existing rights
and contracts. Three of its provisions have been substantially
carried into execution by the gradual substitution of fractional
coin for fractional currency, by the free coinage of gold, and by
free banking. There remains only the completion of preparations
for resumption in coin on the 1st day of January, 1879, and its
maintenance thereafter upon the basis of existing law.

"At the date of my annual report to Congress in December, 1877, it
was deemed necessary, as a preparation for resumption, to accumulate
in the treasury a coin reserve of at least forty per cent. of the
amount of United States notes then outstanding. At that time it
was anticipated that under the provisions of the resumption act
the volume of United States notes would be reduced to $300,000,000
by the 1st day of January, 1879, or soon thereafter, and that a
reserve in coin of $120,000,000 would then be sufficient. Congress,
however, in view of the strong popular feeling against a contraction
of the currency, by the act approved May 31, 1878, forbade the
retirement of any United States notes after that date, leaving the
amount in circulation $346,681,016. Upon the principle of safety
upon which the department was acting, that forty per cent. of coin
was the smallest reserve upon which resumption could prudently be
commenced, it became necessary to increase the coin reserve to
$138,000,000.

"At the close of the year 1877 this coin reserve, in excess of coin
liability, amounted to $63,016,050.96, of which $15,000,000 were
obtained by the sale of four and a half per cent., and $25,000,000
by the sale of four per cent. bonds, the residue being surplus
revenue. Subsequently, on the 11th day of April, 18