marks both in finance and in
ethics."

The growing opposition of the people at large to the contraction
of the currency seemed to have no effect upon his mind.

He again recurs to the same subject in his annual report to Congress,
in December, 1867. After stating that the United States notes,
including fractional currency, had been reduced from $459,000,000
to $387,000,000, and the funded debt had been increased $684,548,800,
he urged as a measure regarded by him as important, if not
indispensable for national prosperity, the funding or payment of
the balance of interest-bearing notes, and a continued contraction
of the paper currency. He urged that the acts authorizing legal
tender notes be repealed, and that the work of retiring the notes
which had been issued under them should be commenced without delay,
and carefully and persistently continued until all were retired.

This policy of contraction, honestly entertained and persistently
urged by Secretary McCulloch in spite of growing stringency, led
Congress, by the act of February 4, 1868, to suspend indefinitely
the authority of the Secretary of the Treasury to make any reduction
of the currency by retiring or canceling United States notes.

Who can doubt that if he had availed himself of the power given
him to refund the interest-bearing notes and certificates of the
United States into bonds bearing a low rate of interest, leaving
the United States notes bearing no interest to circulate as money,
he would have saved the government hundreds of millions of dollars?
If irredeemable notes were a national dishonor, why did he not urge
their redemption in coin at some fixed period and then reissue
them, and maintain their redemption by a reserve in coin?

The act of February 25, 1862, under which the original United States
notes were issued, provided that:

"Such United States notes shall be received the same as coin, at
their par value, in payment for any loans that may be hereafter
sold or negotiated by the Secretary of the Treasury, and may be
reissued from time to time as the exigencies of the public interest
shall require."

This provision would have maintained the parity of United States
notes at par with bonds, but under the pressure of war it was deemed
best by Congress, upon the recommendation of Secretary Chase, to
take from the holder of United States notes the right to present
them in payment for bonds after the first day of July, 1863. If
this pr