nduct
modern operations of business upon the basis of coin alone. Prior
to our Civil War the United States undertook to collect its taxes
in specie and to pay specie for its obligations; this was the
bullion theory. This narrow view of money compelled the states to
supply paper currency, and this led to a great diversity of money,
depending upon the credit, the habits and the wants of the people
of the different states. The United States notes, commonly called
greenbacks, were the creature of necessity, but proved a great
blessing, and only needed one attribute to make them the best
substitute for coin money that has ever been devised. That quality
was supplied by their redemption in coin, when demanded by the
holder.

The feeling in the treasury department on the day of resumption is
thus described by J. K. Upton, assistant secretary, in an article
written at the close of 1892:

"The year, however, closed with no unpleasant excitement, but with
unpleasant forebodings. The 1st day of January was Sunday and no
business was transacted. On Monday anxiety reigned in the office
of the secretary. Hour after hour passed; no news came from New
York. Inquiry by wire showed all was quiet. At the close of
business came this message: '$135,000 of notes presented for coin
--$400,000 of gold for notes.' That was all. Resumption was
accomplished with no disturbance. By five o'clock the news was
all over the land, and the New York bankers were sipping their tea
in absolute safety.

"Thirteen years have since passed, and the redemption fund still
remains intact in the sub-treasury vaults. The prediction of the
secretary has become history. When gold could with certainty be
obtained for notes, nobody wanted it. The experiment of maintaining
a limited amount of United States notes in circulation, based upon
a reasonable reserve in the treasury pledged for that purpose, and
supported also by the credit of the government, has proved generally
satisfactory, and the exclusive use of these notes for circulation
may become, in time, the fixed financial policy of the government."

The immediate effect of resumption of specie payments was to advance
the public credit, which made it possible to rapidly fund all the
bonds of the United States then redeemable into bonds bearing four
per cent. interest. Early in January, 1879, I issued a circular
offering the four per cent. funded loan of the United States at
par and accrued i