fatal influence on the morals and character of the people, to which I have already adverted, I am persuaded you will concur in the conclusion that an inflexible adherence to a limitation of the currency at a fixed sum is an indispensable element of any system of finance now to be adopted.
The holders of the currency now outstanding can be protected in the recovery of their just claims only by substituting for their notes some other security. If the currency is not greatly and promptly reduced, the present scale of inflated prices will not only continue to exist, but by the very fact of the large amounts thus made requisite in the conduct of the war those prices will reach rates still more extravagant, and the whole system will fall under its own weight, thus rendering the redemption of the debt impossible, and destroying its whole value in the hands of the holder. If, on the contrary, a funded debt, with interest secured by adequate taxation, can be substituted for the outstanding, currency, its entire amount will be made available to the holder, and the Government will be in a condition enabling it, beyond the reach of any probable contingency, to prosecute the war to a successful issue. It is therefore demanded, as well by the interest of the creditor as of the country at large, that the evidences of the public debt now outstanding in the shape of Treasury notes be converted into bonds bearing adequate interest, with a provision for taxation sufficient to insure punctual payment and final redemption of the whole debt.
The report of the Secretary of the Treasury presents the outlines of a system which, in conjunction with existing legislation, is intended to secure the several objects of a reduction of the circulation within fixed, reasonable limits; of providing for the future wants of the Government; of furnishing security for the punctual payment of interest and final extinction of the principal of the public debt, and of placing the whole business of the country on a basis as near a specie standard as is possible during the continuance of the war. I earnestly recommend it to your consideration, and that no delay be permitted to intervene before your action on this vital subject. I trust that it will be suffered to engross your attention until you shall have disposed of it in the manner best adapted to attain the important results which your country anticipates from your legislation.