pensation of all
offices for the government, the commission to be composed of two
Members of the Senate, three Members of the House of Representatives,
one officer of the navy, and one officer of the army, who were
directed to examine and report, as soon as practicable, a fair and
just compensation for each officer of the government, and such
regulations as would secure a more economical collection of the
revenue. When this bill was pending I stated its purpose and my
hope to accomplish a reduction of the expenditures of the government,
or, at least, an equalization of the salaries then paid to the
different officers. We sought economy by the reduction of expenses.
I was chairman of this commission, and Senator Clark, of New
Hampshire, was my associate. The commission collected a mass of
information, and upon it based several bills introduced in the
second session of the 37th Congress. Some of these were made
nugatory by the rise of prices, measured in most cases by the fall
in value of our currency, but many of their provisions were ingrafted
into other bills that became laws.

The organization of national banks, authorized to issue circulating
notes, is so intimately connected with legal tender United States
notes that I think it proper to consider them in connection, though
the banking law did not pass until 1863. The two forms of currency,
one issued directly by the government as lawful money of the United
States and a legal tender, and the other issued by private
corporations, but secured by bonds of the United States, constitute
a system of national currency which, organized in the midst of war,
was an important aid to the government in its great struggle, and
when placed at par with coin by the resumption act has proven to
be the best paper money created by legislation in this or any other
country.

The issue of circulating notes by state banks had been the fruitful
cause of loss, contention and bankruptcy, not only of the banks
issuing them, but of all business men depending upon them for
financial aid. Inflation and apparent prosperity were often followed
by the closing of one bank and distrust of all others. The notes
of a broken bank were rarely paid, the assets of such bank being
generally applied to the payment of other liabilities, leaving the
loss to fall on the holders of the notes, mostly innocent persons
of limited means. This led to the adoption in 1846 of the sub-
treasury system, by whic