that to redeem
these bonds there should be issued treasury notes running from one
to ten years, which could be paid off by the application of the
sinking fund as they matured. Such treasury notes would have formed
a popular security always available to the holder as they could
have been readily converted into money when needed for other
investment or business. They would have been in such form and
denominations as to furnish a convenient investment for the small
savings of the people, and fill the place designed by the ten dollar
refunding certificates authorized by the act of February 26, 1879.
I stated my belief that with the then state of the money market a
sufficient amount of treasury notes, bearing an annual interest of
three per cent., could be sold to meet a considerable portion of
the maturing bonds.

Congress did not pass such a law as I recommended, but the plan
adopted and executed by my successor, Mr. Windom, was the best that
could have been devised under existing law, resulting in a very
large reduction of the amount paid for interest yearly. He allowed
the holders of the maturing bonds to retain them at the pleasure
of the government, with interest at the rate of three and a half
per cent.

I recited the action of the department under the resumption act,
but this has already been fully described by me. In respect to
the United States notes I said:

"United States notes are now, in form, security, and convenience,
the best circulating medium known. The objection is made that they
are issued by the government, and that it is not the business of
the government to furnish paper money, but only to coin money.
The answer is, that the government had to borrow money, and is
still in debt. The United States note, to the extent that it is
willingly taken by the people, and can, beyond question, be maintained
at par in coin, is the least burdensome form of debt. The loss of
interest in maintaining the resumption fund, and the cost of printing
and engraving the present amount of United States notes, is less
than one-half the interest on an equal sum of four per cent. bonds.
The public thus saves over seven million dollars of annual interest,
and secures a safe and convenient medium of exchange, and has the
assurance that a sufficient reserve in coin will be retained in
the treasury beyond the temptation of diminution, such as always
attends reserves held by banks."

I expressed the opinion that the ex