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Updated: July 28, 2025
While trade dollars have ceased, for the present at least, to be an element of active disturbance in our currency system, some provision should be made for their surrender to the Government. In view of the circumstances under which they were coined and of the fact that they have never had a legal-tender quality, there should be offered for them only a slight advance over their bullion value.
The latter stated that "with the present volume of currency it is impossible to resume and maintain redemption," and he sought unsuccessfully to secure the cancellation of legal-tender notes at the rate of $2,000,000 per month. Mr. Bayard charged that the bill was rather adverse than favorable to resumption. The Senate passed the bill on the same day by a vote of 32 to 14.
All the bonds that have been issued since February 12, 1873, when gold became the only unlimited legal-tender metallic currency of the country, are justly payable in gold coin or in coin of equal value. During the time of these issues the only dollar that could be or was received by the Government in exchange for bonds was the gold dollar.
In answer to remonstrance against this practice the Secretary maintained that the authority to contract and to cancel the legal-tender notes did not require him to do it, but left it within his discretion. This was unquestionably the law of the case. Mr.
They advocated the coinage of silver dollars of 345-6/10 grains, to be legal-tender for sums not over twenty dollars, and to take the place of all paper currency of less denomination than five dollars. President Hayes presented the subject in his message, December 3, 1877.
The majority believed, as the vote showed, in the policy of coining silver dollars of full legal-tender, regardless of their intrinsic equality of value with gold dollars, thus creating two metallic currencies differing in value for all purposes of commercial interchange with the world, and keeping them at an equality of value at home by the force of law.
The argument was presented that if a man could not pay his overdue note he would deem it a privilege to give a new obligation to run on interest for a longer period, and the Nation ought to prove itself as honest as its citizens. This specious plea assumed that the legal-tender note was simply a promise to pay, with only the qualities of an individual obligation.
It is easy to conceive that the debtor and speculative classes may think it of value to them to make so-called money abundant until they can throw a portion of their burdens upon others. But even these, I believe, would be disappointed in the result if a course should be pursued which will keep in doubt the value of the legal-tender medium of exchange.
A majority of Republicans and a minority of Democrats asserted the necessity of maintaining silver coin at full legal-tender, but upon the basis of equality in intrinsic value with the gold dollar. This class feared the effect of an exclusively gold standard, while the supply of gold, compared with the commercial demands of the world, is relatively and rapidly growing less.
There are a few measures which seem to me important in this connection and which I commend to your earnest consideration: A repeal of so much of the legal-tender act as makes these notes receivable for debts contracted after a date to be fixed in the act itself, say not later than the 1st of January, 1877. We should then have quotations at real values, not fictitious ones.
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