lent amount of the bonds pledged for
the redemption of the former. After that was accomplished we should
have a circulation based directly upon the undoubted credit of the
United States, and the government would be saved the twenty millions
(more or less) of coin per annum which it now pays to the National
banks as interest on three hundred and fifty-four millions of the
bonds thus deposited, for it could withdraw these, by purchase
with the greenbacks thus issued in substitution for the surrendered
National bank currency, as fast as the exchange of the one for the
other might be made. This saving of interest alone would strengthen
the government for a return to the gold standard, which could be
effected without any contraction of the volume of paper money, except
to the extent of the coin thrown into circulation: and the resumption
of specie payments by the Treasury--greenbacks to be convertible into
coin only at the Treasury and sub-treasuries--would be resumption by
the entire country, for gold would no longer command a premium. The
National banks thus deprived of their own notes would have to bank on
greenbacks, just as the State banks--which have no circulation--do at
present.

It is obvious that resumption could be accomplished in this way on
a very much smaller reserve of coin than would be necessary if each
individual bank had also to resume simultaneously with the Treasury,
as would be the case under the present mixed currency system, for
the whole of the reserve would be concentrated in the hands of the
government, instead of being scattered among the banks all over
the country. The credit of the government would, of course, be much
stronger than that of any individual bank, and the demand for gold
in exchange for greenbacks would probably be very small in comparison
with the amount of coin belonging to the Treasury, even at the
beginning of resumption, when the element of novelty in it, not
distrust, might induce conversion. The banks would then have no more
occasion for gold than they have now, greenbacks still retaining their
legal-tender character unaltered.

Had the country been on a specie basis when this crisis came upon us,
the twenty millions of coin held by the New York banks at that time
would have been available for their relief, and have formed a part of
the circulation; whereas for all practical purposes it was useless to
them, and consequently to the people, as money; and in like manner all
t