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ident and Secretary the free use of the forty-four | the basis of the act of 1865, the new banks to be million reserve to check the progress of the panic established upon the terms, liabilities, and reand alleviate its disasters. In his veto message strictions imposed upon existing banks, being and in his letter to Messrs. Claflin and Anthony required to secure their bills by deposits of on the 28th of September last, the President bonds, redeem them in United States notes upon treats the forty-four millions as being an exist- demand over their own counters, or in one of the ing reserve, a sum of money already in the redemption cities, and with the additional reTreasury, as much so as a like sum received striction that all banks, old and new, shall keep from taxes, to be used at the discretion of the one fourth of the coin interest they receive upon Secretary of the Treasury for certain purposes. their bonds deposited for the security of their He regards the maximum amount of United notes. States notes as $400,000,000, and treats the $44,000,000 as in actual existence.

The first section of the bill declares the law to be what the President and Secretary have assumed it to be.* It declares that the maximum amount of United States notes shall be $400,000,000; that is, the amount beyond which the issue shall not be extended. The word maximum means the greatest. It does not mean the precise amount, but simply the amount beyond which the issue cannot go. The section relieved the Government from the exercise of a doubtful power, which had been the occasion of severe animadversions. The Secretary of the Treasury, in his last report, thought it important that Congress should remove the doubt hanging over the issue of this forty-four million, and used the following language:


'But the law authorizing the issue of the maximum of $400,000,000 has never been repealed, and has uniformly been held by the Treasury Department and the law officers thereof to be in full force. In view of the uncertainty which exists in public sentiment as to the right of the Secretary of the Treasury to issue United States notes in excess of the maximum, and conceding that he has the right under the law, I respectfully recommend that Congress shall set these questions at rest by a distinct enactment."

It was the wish and expectation of the friends of the bill that the Secretary should put into circulation the remaining eighteen millions of the forty-four millions, and it was proposed by some that the language of the section should be so changed as to require the amount to be put into circulation and kept outstanding; but it was determined otherwise, and that the bill should simply declare the maximum amount of circulation, and leave the power and discretion of the Secretary what they had been claimed to be. Had Congress taken from the Secretary the enormous power to put the circulation of United States notes up to $400,000,000, or reduce it to $356, 000,000, by fixing it at $400,000,000, the act would have met the approbation of a large part of the people who believe that a power so vast should not be reposed in any public officer. But that was not done, and the whole effect of the section was to establish the legality of the power which had been claimed, and the exercise of which had been declared by many to be a gross usurpation.

The other section of the bill authorizes the increase of the bank note circulation to the amount of $46,000,000, to be distributed among the States having less than their proportion upon

*[The new Currency Act, passed by Forty-Third Congress, settles this question affirmatively.-Editor.]

This provision looked forward to the resumption of specie payments, and was the first step that had been taken in that direction by Congress. The $46,000,000 provided for came full $30,000,000 short of equalizing the distribution among the States on the basis of the act of 1865. Under that act the New England States were entitled to less than $40,000,000, but received $110,000,000, and the other Eastern States had an excess of nearly $12,000,000. The most of the friends of the bill desired free banking; that is, the restriction taken off as to the amount and locality of the circulation of national banks, so that people should be left free in every part of the United States to establish national banks wherever and whenever their local wants and necessities demanded them. The profit upon the currency of national banks is less than two per cent., and they will not be established and maintained anywhere unless there be a local demand which will give to them a liberal line of deposits.

But the purpose of this letter is not to enter into the defense of the second section of the bill, but to remove a misapprehension that appears to prevail in regard to the first. Whether the volume of the currency is sufficient for the business of the country is a question of fact about which men may honestly differ. During the four years preceding the panic there had been an actual contraction of the currency, and a much larger comparative contraction resulting from the growth of population and business. A majority of Congress were of the opinion that, to produce a restoration of confidence, a speedy revival of business, and a return to the prosperity which was so suddenly destroyed by the panic, some addition should be made to the volume of the currency.

That the bill which has failed to become a law would have produced some contraction is undoubtedly true. But it would have been almost entirely in the stock market in New York. It is a well-understood fact that the reserves of the western and southern banks kept in New York have been loaned by the New York banks almost exclusively upon call to dealers in stocks, and have thus contributed to stimulate unwholesome speculation, and have been of very little benefit to the mercantile or manufacturing community. The evil resulting from this fact was strikingly illustrated during the panic last fall. The stock brokers, who had borrowed the money, were not able to repay the New York banks, and they in turn were unable to pay the country banks from which the money had been received, and thus the disaster of the panic was greatly aggravated.

This bill in effect required the banks outside of the redemption cities to keep three-fourths of

their reserve at home, and would have with- | can be had to establish national banks in Misdrawn some millions from the stock market in souri, and oblige your obedient servant, New York, which would strengthen the banks IRA B. HYDE. to which they belonged, and would have produced contraction in a quarter where it is pretty well understood that contraction would do no harm.

Comptroller of the Currency.

TREASURY DEpartment,
WASHINGTON, April 24, 1874.
SIR: I have received your letter of the 22d

The act of 1869, to strengthen the public
credit, declares that "the United States solemnly
pledges its faith to make provision at the earli-
est practicable period for the redemption of the
United States notes in coin." In the debate upon
this bill nobody has denied the character or bind-
ing force of that pledge, but the question as to the
"practicable period" for its performance remains
as open as it was upon the day it was passed.
Very few members of either house of Congress
have agreed upon any method for the resump-circulation at my disposal.
tion of specie payment. A few are in favor of
hoarding the gold in the Treasury until enough
has been acquired to begin the redemption of
the notes. Others have proposed to acquire the
requisite amount of gold by selling our bonds in
Europe; others to fund a portion of the legal
tender notes in bonds bearing five per cent. in-
terest, and retire them in that way, and to bring
the rest to par by contraction; others to fund
them into a bond bearing five per cent. interest,
to be reissued and again funded. While the
Government is pledged to redeem the legal ten-
der notes in coin at the earliest practicable period,
while the purpose to do so should ever be kept
in view, yet that period is by many not deemed
to be practicable when there is great stagnation
of business, much labor unemployed, and the
revenues largely fallen off, and much distress
and suffering in every part of the country.
Very truly, yours,

The $4,200,000 of circulation referred to in the President's message was long since assigned to applicants in the States which were deficient, in accordance with the act of July 12, 1870, and all applications from Missouri with proper indorsements have been granted whenever there was any

Note G.


[From Congressional Record, May 20, 1874.]

HOUSE OF REPRESENTATIVES, WASHINGTON, D. C., April 22, 1874. DEAR SIR: The President, in his veto message to-day, states that there is still $4,000,000 of national bank currency remaining in the Treasury subject to the demand of sections desiring it that have secured less than their quota.

I do not pretend to give his exact language, not having seen the message, but I think the above is the substance.

Missouri has received far less than her quota of such currency. Why is she not entitled to a part of this $4,000,000? There is a demand for it from the section I represent, but no effort was made because it was understood that none could

be bad.

During the month of March letters were addressed to all applicants, requiring that the necessary amount of bonds to secure circulation should be deposited within thirty days or circulation would be distributed to other applicants, and, as far as practicable, such currency has been redistributed to the States to which it was originally allotted. Four small banks in your State have been recently authorized, circulation to be supplied from circulation previously assigned to parties who had failed to perfect their organizations, and no applications with the proper indorsements are now on file in this office from your State. Very respectfully,

Hon. IRA B.

JOHN JAY KNOX, Comptroller. HYDE, House of Representatives.

HOUSE OF REPRESENTATIVES, WASHINGTON, D. C., April 25, 1874. DEAR SIR: I have the honor to acknowledge the receipt of your letter of the 24th instant in reply to mine of the 22d.

I am not quite sure that I understand your answer to the main point of my inquiry, which is this, have you now at your disposal any national bank in the State of Missouri, provided the apbank circulation which you could grant for a new plication, properly indorsed, was to be immediately made?

ery respectfully, yours, Hon. JOHN JAY KNOX,


Comptroller of the Currency.

WASHINGTON, April 27, 1874.
SIR: I have recelved your letter of the 25th

There is no currency at this date at my disposal for the organization of additional national banks. I write to-day to a national bank in the city of Saint Louis who are entitled to $100,000 of additional circulation. If they are not prepared to deposit the necessary amount of bonds, I can then organize the national bank proposed by you. Very respectfully,

Will you please inform me at your earliest JOHN JAY KNOX, Comptroller. convenience whether any part of this currency | Hon. IRA B. HYDE, House of Representatives.



The Cabinet.

Secretary of State-Hamilton Fish, of New York. Secretary of the Treasury-Benjamin H. Bristow, of Kentucky, June 4, 1874, vice William A. Richardson, of Massachusetts, appointed a judge of the Court of Claims.

Secretary of War-William W. Belknap, of Iowa. Secretary of the Navy-George M. Robeson, of New Jersey:

Secretary of the Interior-Columbus Delano, of Ohio.

Postmaster General-Marshall Jewell, of Connecticut, vice John A. J. Creswell, of Maryland, resigned July 1, 1874. Attorney General-George H. Williams, of Oregon.

Members of Forty-Third Congress. First session, December 1, 1873—June 23, 1874.

The Senate.

HENRY WILSON, of Massachusetts, Vice President
of the United States, and President of the Senate.
George C. Gorham, of California, Secretary.
Maine-Lot M. Morrill, Hannibal Hamlin.
New Hampshire-Bainbridge Wadleigh, Aaron
H. Cragin.

Vermont-Justin S. Morrill, George F. Edmunds.
Massachusetts-George S. Boutwell, William B.

Rhode Island-Henry B. Anthony, William Sprague.

Connecticut-Orris S. Ferry, William A. Buckingham.

New York-Roscoe Conkling, Reuben E. Fenton. New Jersey-Frederick T. Frelinghuysen, John P. Stockton.

Pennsylvania-Simon Cameron, John Scott. Delaware-Eli Saulsbury, Thomas F. Bayard. Maryland-George R. Dennis, William T. Ham


Virginia-John W. Johnston, John F. Lewis. North Carolina-Augustus S. Merrimon, Matthew W. Ransom.

South Carolina-John J. Patterson, Thomas J. Robertson.

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Indiana-Daniel D. Pratt, Oliver P. Morton.
Illinois-John A. Logan, Richard J. Oglesby.
Missouri-Lewis V. Bogy, Carl Schurz.
Arkansas-Powell Clayton, S. W. Dorsey.
Michigan-Zachariah Chandler, Thomas W.
Florida-Simon B. Conover, Abijah Gilbert.
Texas-Morgan C. Hamilton, James W. Flana-

Iowa-William B. Allison, George G. Wright.
Wisconsin-Timothy O. Howe, Matthew H.

California-Aaron A. Sargent, John S. Hager.* Minnesota-Alexander Ramsey, William Win


Oregon-John H. Mitchell, James K. Kelly. Kansas-John J. Ingalls, James M. Harvey.t West Virginia-Henry G. Davis, Arthur I. Bore


Nevada-John P. Jones, William M. Stewart. Nebraska-Phineas W. Hitchcock, Thomas W. Tipton.

House of Representatives. JAMES G. BLAINE, of Maine, Speaker. Edward McPherson, of Pennsylvania, Clerk. Maine-John H. Burleigh, William P. Frye, James G. Blaine, Samuel F. Hersey, Eugene Hale-5.

New Hampshire-William B. Small, Austin F. Pike, Hosea W. Parker-3.

Vermont-Charles W. Willard, Luke P. Poland, George W. Hendee-3.

Massachusetts-James Buffinton, Benjamin W. Harris, Henry L. Pierce, Samuel Hooper, Daniel W. Gooch, Benjamin F. Butler, E. Rockwood Hoar, John M. S. Williams, George F. Hoar, Alvah Crocker, Henry L. Dawes-10.

Rhode Island-Benjamin T. Eames, James M. Pendleton-2.

Connecticut-Joseph R. Hawley, Stephen W. Kellogg, Henry H. Starkweather, William H.


Georgia-John B. Gordon, Thomas M. Norwood.
New York-Henry J. Scudder, John G. Schu-
Alabama-George Goldthwaite, George E. Spen-maker, Stewart L. Woodford, Philip S. Crooke,

Mississippi-James L. Alcorn, Henry R. Pease.‡
Louisiana-J. Rodman West, (vacancy.)?
Ohio-Allen G. Thurman, John Sherman.

William R. Roberts, Samuel S. Cox, Thomas J.
Creamer, John D. Lawson, David B. Mellish,
Fernando Wood, Clarkson N. Potter, Charles St.
John, John O. Whitehouse, David M. DeWitt,

*Qualified May 1, 1874, to fill the vacancy caused by Eli Perry, James S. Smart, Robert S. Hale, Wil

the death of Charles Sumner, March 12, 1874.

+ Election contested by Francis W. Sykes, May 28, 1874. The Senate declared Mr. Spencer entitled to the seat after an amendment declaring Mr. Sykes entitled was rejected-yeas 11, nays 33.

Qualified February 12, 1874, to fill the vacancy cansed by the resignation of Adelbert Ames.

Claimed by Pinckney B. S. Pinchback and W. L. McMillen, but not awarded to either.

liam A. Wheeler, Henry H. Hathorn, David

Qualified February 9, 1874, to fill the vacancy caused by the resignation of Eugene Casserly..

+ Qualified February 12, 1874, in place of Robert Crozier, appointed by the Governor to fill the vacancy caused by the resignation of Alexander Caldwell. Qualified December 15, 1873. Died May 23, 1874.

Wilber, Clinton L. Merriam, Ellis H. Roberts, | Brown, Charles W. Milliken, William B. Read,
William E. Lansing, R. Holland Duell, Clinton Elisha D. Standeford, William E. Arthur, James
D. McDougall, William H. Lamport, Thomas C. B. Beck, Milton J. Durham, George M. Adams,
Platt, H. Boardman Smith, Freeman Clarke, John D. Young-10.
George G. Hoskins, Lyman K. Bass, Walter L.
Sessions, Lyman Tremain-33.

New Jersey-John W. Hazelton, Samuel A.
Dobbins, Amos Clark, Jr., Robert Hamilton,
William Walter Phelps, Marcus L. Ward, Isaac
W. Scudder-7.

Pennsylvania Samuel J. Randall, Charles
O'Neill, Leonard Myers, William D. Kelley,
Alfred C. Harmer, James S. Biery, Washington
Townsend, Hiester Clymer, A. Herr Smith, John
W. Killinger, John B. Storm, Lazarus D. Shoe-
maker, James D. Strawbridge, John B. Packer,
John A. Magee, John Cessna, R. Milton Speer,
Sobieski Ross, Carlton B. Curtis, Hiram L. Rich-
mond, Alexander W. Taylor, James S. Negley,
Ebenezer McJunkin, William S. Moore, Lemuel
Todd, Charles Albright, Glenni W. Scofield-27.
Delaware-James R. Lofland—1.
Maryland-Ephraim K. Wilson, Stevenson
Archer, William J. O'Brien, Thomas Swann,
William J. Albert, Lloyd Lowndes, Jr.-6.

Virginia-James B. Sener, James H. Platt,
Jr., J. Ambler Smith, William H. H. Stowell,
Christopher Y. Thomas,* Thomas Whitehead,
John T. Harris, Eppa Hunton, Rees T. Bowen-9.
North Carolina-Clinton L. Cobb, Charles R.
Thomas, Alfred M. Waddell, William A. Smith,
James M. Leach, Thomas S. Ashe, William M.
Robbins, Robert B. Vance-8.

South Carolina-Joseph H. Rainey, Alonzo J. Ransier, Robert B. Elliott, Alexander S. Wallace, Richard H. Cain-5.

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Tennessee-Roderick R. Butler, Jacob M. Thornburgh, William Crutchfield, John M. Bright, Horace H. Harrison, Washington C. Whitthorne, John D. C. Atkins, David A. Nunn, Barbour Lewis, Horace Maynard-10.

Indiana-William E. Niblack, Simeon K. Wolfe, William S. Holman, Jeremiah M. Wilson, John Coburn, Morton C. Hunter, Thomas J. Cason, James N. Tyner, John P. C. Shanks,* Henry B. Sayler, Jasper Packard, Godlove S. Orth, William Williams-13.

Illinois-John B. Rice, Jasper D. Ward, Charles B. Farwell, Stephen A. Hurlbut, Horatio C. Burchard, John B. Hawley, Franklin Corwin, Greenbury L. Fort, Granville Barrere, William H. Ray, Robert M. Knapp, James C. Robinson, John McNulta, Joseph G. Cannon, John R. Eden, James S. Martin, William R. Morrison, Isaac Clements, Samuel S. Marshall—19.

Missouri-Edwin O. Stanard, Erastus Wells, William H. Stone, Robert A. Hatcher, Richard P. Bland, Harrison E. Havens, Thomas T. Crittenden, Abram Comingo, Isaac C. Parker, Ira B. Hyde, John B. Clark, jr., John M. Glover, Aylett H. Buckner-13.

Arkansas-Asa Hodges,t Oliver P. Snyder, Thomas M. Gunter, William J. Hynes-4.

Michigan-Moses W. Field, Henry Waldron, George Willard, Julius C. Burrows, William B. Williams, Josiah W. Begole, Omar D. Conger, Nathan B. Bradley, Jay A. Hubbell-9.

Florida-Josiah T. Walls, William J. Pur

Georgia-Andrew Sloan,† Richard H. White-man-2.
ley, Philip Cook, Henry R. Harris, James C.
Freeman, James H. Blount, Pierce M. B. Young,
Alexander H. Stephens, Hiram P. Bell-9.

Alabama-Frederick G. Bromberg, James T.
Rapier, Charles Pelham, Charles Hays, John H.
Caldwell, Joseph H. Sloss, Alexander White,
Christopher C. Sheats-8.

Mississippi-Lucius Q. C. Lamar, Albert R. Howe, Henry W. Barry, Jason Niles, George C. McKee, John R. Lynch-6.

Louisiana-J. Hale Sypher, ? Lion A. Sheldon, Chester B. Darrall, George L. Smith, || Frank Morey, (Vacancy.¶)-6.

Ohio-Milton Sayler, Henry B. Banning, John Q. Smith, Lewis B. Gunke, Charles N. Lamison, Isaac R. Sherwood, Lawrence T. Neal, William Lawrence, James W. Robinson, Charles Foster, Hezekiah S. Bundy, Hugh J. Jewett, Milton I. Southard, John Berry, William P. Sprague, Lorenzo Danford, Laurin D. Woodworth, James Monroe, James A. Garfield, Richard C. Parsons-20

Kentucky-Edward Crossland, John Young

Qualified March 6, 1874, in place of Alexander M. Davis, unseated without a division.

+Qualified March 24, 1874, in place of Morgan Rawls, unseated by a vote of 133 to 77.

Qualified January 5, 1874.
Qualified December 2, 1873.
Qualified December 3, 1873.

Claimed by Pinckney B. S. Pinchback and George A. Sheridan, but not awarded to either, the House, June 9, 1874, having voted, 145 to 72, that Mr. Sheridan was not elected, and 121 to 94 that Mr. Pinchback was not elected, a right to contest being awarded to both.

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Texas-William S. Herndon, William P. McLean, DeWitt C. Giddings, John Hancock, Roger Q. Mills, Asa H. Willie-6.

Iowa-George W. McCrary, Aylett_R. Cotton, William G. Donnan, Henry O. Pratt, James Wilson, William Loughridge, John A. Kasson, James W. McDill, Jackson Orr-9.

Wisconsin-Charles G. Williams, Gerry W. Hazelton, J. Allen Barber, Alexander Mitchell, Charles A. Eldredge, Philetus Sawyer, Jeremiah M. Rusk, Alexander S. McDill-8.

California-Charles Clayton, Horace F. Page,
John K. Luttrell, Sherman O. Houghton-4.
Minnesota-Mark H. Dunnell, Horace B.
Strait, John_T. Averill—3.

Oregon-James W. Nesmith-1.
Kansas-David P. Lowe, Stephen A. Cobb,
William A. Phillips-3.

West Virginia-John J. Davis, J. Marshall
Hagans, Frank Hereford-3.

Nevada-Charles W. Kendall-1.
Nebraska-Lorenzo Crounse-1.
Total number of Representatives..
Number of Delegates.......

Qualified December 8, 1873. †Qualified February 5, 1874.



Qualified June 16, 1874, in place of William W. Wilshire, who qualified February 18, under a resolution of the House, yeas 118, nays 96, deelaring him entitled prima facie to a seat, and who was unseated, on a contest, without a division.

Qualified January 27, 1874-Mr. Davis being declared entitled to the seat, yeas 137, nays 81; Mr. Ha gans, yeas 115, nays 75.



Finances "Legal Tender" and Bank | be deposited in the Treasury of the United States, Note Currency-Free Banking-Ab- so much of the circulation of such association or olition of Reserves, &c. associations shall be redeemed as will equal the A large part of the session was spent in debate amount required and not returned; and if there upon, and consideration of, the multitude of prop-quired for such redemption, it shall be returned be any excess of proceeds over the amount reositions made on this subject. The record is so voluminous as to make its condensation a neces-shall have been sold. And it shall be the duty to the association or associations whose bonds sity. The effort has been, in the subjoined pages, to present the more important facts of the case.

I. The Senate Distribution Bill.

1874, February 3-Mr. SHERMAN, from the Committee on Finance, reported a bill (S. 432) to amend "An act to provide for the redemption of the three per cent. temporary loan certificates, and for an increase of national bank notes," approved July 12, 1870; which was read and passed to a second reading, as follows:

of the Treasurer, assistant treasurers, designated depositaries, and national bank depositories of the United States, who shall be kept informed by the Comptroller of the Currency of such associations as shall fail to return circulation or to deposit lawful money as required, to assort and return to the Treasury for redemption the notes of such associations as they shall come into their hands until the amount required shall be redeemed.

from banking associations under the provisions of this act, shall not exceed twenty-five million dollars, and that such circulation shall from time to time be withdrawn and redeemed only as it shall be necessary to supply banks in those States having less than their apportionment.

SEC. 3. That from and after the passage of this act it shall be lawful for the Comptroller of the Be it enacted, &c., That so much of the act Currency to issue circulating notes in the manentitled "An act to provide for the redemption ner and proportion now provided by law, to of the three per centum temporary loan certifi- associations organized or to be organized in those cates, and for an increase of national bank notes," States and Territories having less than their proas provides that no circulation shall be with- portion of circulation, under an apportionment drawn, under the provisions of section six of said made on the basis of population and of wealth, act, until after the fifty-four millions granted in as shown by the returns of the census of eighsection one of said act shall have been taken up, teen hundred and seventy: Provided, That the is hereby repealed; and it shall be the duty of whole amount of circulation issued to such bankthe Comptroller of the Currency, under the direc-ing associations, and withdrawn and redeemed tion of the Secretary of the Treasury, to proceed forthwith to carry into execution the provisions of section six of said act, and, to enable him to do so, he is hereby authorized and required, from time to time, as needed for the execution of the said section, to make requisitions upon each of the national banks described in said section, organized in States having an excess of circulation, to withdraw and return so much of their circulation as by said act may be apportioned to be withdrawn from them, or, in lieu thereof, to deposit in the Treasury of the United States lawful money sufficient to redeem such circulation, and, upon the return of the circulation required, or the deposit of lawful money, as herein provided, a proportionate amount of the bonds held to secure the circulation of such association as shall make such return or deposit shall be surrendered to it.

SEC. 2. That upon the failure of the national banks upon which requisition for circulation shall be made, or of any of them, to return the amount required, or to deposit in the Treasury lawful money to redeem the circulation required, within thirty days, the Comptroller of the Currency shall at once sell, as provided in section forty-nine of the national currency act approved June third, eighteen hundred and sixty-four, bonds held to secure the redemption of the circulation of the association or associations which shall so fail, to an amount sufficient to redeem the circulation required of such association or associations, and with the proceeds, which shall

This bill was considered, debated, amended, and then laid aside, with a view to consider a new bill reported by Mr. SHERMAN from the Finance Committee, (S. 612,) as follows:

II. The Senate Currency Bill. That the maximum limit of United States notes is hereby fixed at three hundred and eighty-two million dollars, at which amount it shall remain until reduced as hereinafter provided.

SEC. 2. That on the first day of January, eighteen hundred and seventy-six, the Secretary of the Treasury is authorized and required to pay on demand, at the office of the Treasurer of the United States, and at the office of the Assistant Treasurer in the city of New York, to any holder of United States notes to the amount of one thousand dollars, or any multiple thereof, in exchange for such notes, an equal amount of the gold coin of the United States; or, in lieu of coin, he may, at his option, issue in exchange for said notes an equal amount of coupon or registered bonds of the United States, in such form as he may prescribe, and of denominations of fifty dollars, or some multiple of that sum, redeemable in coin of the present standard value,


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