1 Proceedings of the American Bankers' Association, 1879, p. 44. Mr. Dexter A. Hawkins, in a pamphlet issued in January, 1879, proposed to remove this reproach by accumulating in the treasury a coin reserve equal to the whole amount of treasury notes outstanding. This would give us a sound but costly currency.

The mere presence of a large reserve in the treasury is a temptation to public extravagance. The existence of the national government does not depend, like the existence of a bank, upon the maintenance of its credit. Members of Congress are not swayed by the motives which control the directors of banks. If the balance in the treasury had been simply enough for the ordinary expenses of the government, the appropriations would not have run up from $114,000,000 for 1878, to $146,000,000 for 1879, and $162,000,000 for 1880.1

This is only one warning sign. Not only have the regular and customary appropriations been rapidly increased, but new outlets have been sought for the public moneys. In June, 1878, and again in February, 1879, the Senate voted a subsidy of $3,000,000 for mail service between the United States and Brazil. In June, 1879, Senator Blaine said he was prepared to support a general law awarding $25 a mile annually to every monthly line of American steamers of 3000 tons, sailing regularly to any foreign port, for the sailing distance; $45 a mile for every semimonthly line; and $75 a mile for every weekly line; and proportional subsidies for steamers greater or less than the standard of 3000 tons.1 The Brazilian subsidy was estimated at the rate of $30 a mile for monthly service by steamers of 3000 tons. Fortunately this project, though twice passed by the Senate, was twice defeated by the House of Representatives. Three national conventions in 1876 denounced the policy of subsidizing railroads. A nation encumbered by a heavy debt can no better afford to be generous to builders of steamships than to builders of railroads; but the free-handed senators and representatives have not stopped at steamships. Bills are now before Congress authorizing the secretary of the treasury to endorse the 4 per cent. bonds of a railroad from San Antonio to Laredo to the amount of $15,000 a mile ; granting a subsidy of $2,625,000 in bonds to a railroad between Galveston and Rio Grande City ; authorizing the secretary of the treasury to invest $870,000 in a mortgage on the Corpus Christi, San Diego and Rio Grande Railroad, and to guarantee the interest for fifty years on $15,000,000 of 5 per cent. bonds issued by the Great Southern Railway Company, on a railroad in Georgia and Florida: granting alternate blocks of six sections of land on the line of the New Orleans, Texas and Colorado Railroad; granting $10,000 a mile in cash to five roads between the Lower Mississippi ports, the Gulf and the Pacific-the whole system making 1515 miles, and calling for $15,150,000, to be repaid in twenty years if the roads are then able, and if not, after twenty years more. Another bill calls for $15,000 a mile, in cash, to aid in the construction of a Southern Pacific railroad, and to be repaid likewise in twenty or forty years, as the case may be. The dangerous character of these schemes was illustrated in 1878 by the vigorous resistance of the Central Pacific and Union Pacific Railroad Companies to the legislation compelling them to provide sinking-funds for the payment of their debts to the United States instead of dividing their entire profits from year to year, and leaving the claim of the United States to take care of itself. There is also a plan to have the United States endorse the bonds of the Dismal Swamp Canal Company to the amount of $400,000 for forty years; and another to procure the same endorsement for the coupons of $4,000,000 in 5 per cent. bonds of the Maryland and Delaware Ship Canal for fifty years. A lot of old State claims have been dug up. Texas wants $7,750,000 for creditors of the Republic of Texas before its admission to the Union, and $1,629,615 for expenditures for the defence of the frontier; Virginia wants a recomputation of the accounts of the war of 1812; and Georgia wants $35,555 for supplies furnished to the Continental army in 1777.

1 These are Mr. Garfield's figures, in an article on "National Appropriations and Misappropriation?," published in the North American Review, June, 1879, p. 580.

1 Letter to the business men of the city of New York, on the decay of American commerce, and the means of promoting its revival, June 17,1879.

If these enormous sums were to be raised by taxation, no Congress would venture to entertain projects so ruinous. Such extravagant schemes are bred of the fancy that in some way money can be created by the government. Mr. J. W. Singleton, of Illinois, proposes to issue United States notes, to be paid out indefinitely, upon "any appropriation authorized by law that the ordinary revenue of the government may be insufficient to meet;" and in order that the revenue may be insufficient, another section of the bill proposes to repeal all the internal revenue laws. Mr. Muldrow, of Mississippi, wants to add $500,000,000, and Mr. Weaver, of Iowa, $600,000,000 to the volume of legal tender currency. Mr.Wright, of Pennsylvania, wants to issue $400,000,000 of legal tenders, to be spent on public buildings and in the improvement of rivers and harbors. Mr. Cox, of New York, has a bill to retire the national bank-notes, when received at the treasury for redemption with the funds provided by the banks, and to cancel a proportionate amount of the bonds deposited as collateral security, issuing United States notes instead. This proposition to seize and confiscate trust funds held by the government is duplicated by Mr. De la Matyr, of Indiana, and triplicated by Mr. Gillette, of Iowa. Mr. De la Matyr has, besides, two magnificent plans-one to fund the entire municipal indebtedness of the country in 2 per cent. 50-year municipal bonds, to be taken by the United States at par for legal tender notes; the other, to issue a loan fund of $1,000,000,000, to be lent for fifty years to any corporations that apply, in such sums as may be wanted, without interest for five years, and afterward at 3 per cent. annually.

To these statesmen a reserve is merely so much idle money. It has even been proposed to suspend the sinking-fund for the payment of the interest-bearing debt. If that fund is not safe, what must be the danger which besets the reserve for the payment of the notes bearing no interest ? In February, 1879, the chairman of the committee on ways and means, Mr. Wood, of New York, seeing that the treasury had a cash balance held as a reserve, required by the resumption law, "which reserve," he said, "does not appear to be needed to maintain resumption," proposed to direct the secretary of the treasury to use so much of the reserve as might be needed to pay the appropriation for arrears of pensions. A few days later Mr. Ewing brought in the bill, already mentioned, forbidding the sale of bonds for the purpose of maintaining specie payments. Mr. "Wood's proposition did not come to a vote. Mr. Ewing's was laid on the table, 141 to 110. But if the misappropriation and subversion of a fund which should be held in trust for every note-holder in the country, can be even talked about in less than two months after the resumption of specie payments, by men holding positions on the most important committees of the House, and not only talked about but supported by the votes of nearly half the members, it is easy to see that the day will come when some demagogue will lead a successful attack upon the treasury, scatter the reserves in some wild scheme of public improvements, and leave the currency to sink once more into an insolvency from which there will be no recovery. A change of sixteen votes would have carried Mr. Ewing's bill through the House. The value of the dollar of account ought not to depend upon an accidental majority: it should represent invariably a certain weight and fineness of the precious metals, and Congress should have nothing to do with it except to see that the makers of a credit currency redeem their promises in coin or go out of business. That is the duty of the government, and there its duty ends.