arrest the circulation of the notes and lessen the volume of the currency? Its first effect will certainly be to add another stimulant to investment in bonds. It was unfortunate that the act of the last session postponed the change of interest for six months. The delay has deprived the remedy of much of its efficacy, and good faith requires that at least sixty days should be allowed for its operation. Otherwise I would have proposed to limit the funding privilege to the 1st of May instead of the 1st of July. The effect of the stimulant is thus retarded. Still, the fact that there is a period of limitation will induce holders to come in before it expires. Those who desire to secure 8 per cent. securities will come in before the 22d of April or hold up until near that day the notes which secure that right, and all who can will come in before the 1st of July to save the final exclusion. It is probable therefore that throughout the entire period an amount will be withdrawn sufficient to check any rapid advance in the total amount of circulation. But when the final date of limitation approaches the notes will not pass readily from hand to hand, and the result will be that they are thrown out of ordinary circulation and relieve the currency to that extent. The comparatively small amount then left in the hands of individuals will cease to have a purchasing power. They will pass only by special contract and their chief value will consist in their being receivable for Government dues. If at this point the Government will collect a tax sufficient to absorb the whole remnant, the relief afforded to the community and the currency will be made complete. Hitherto the policy of the Government has sought to absorb the circulation by inducements alone. Bonds at a high rate of interest have been offered, but the inducement has been abated by the depreciation of the currency in which the interest is paid. It is proposed now to supply the deficiency by a sconstraint. We see on every side of us indications of the abundance of money. Large sums are everywhere held on deposit, but the holders propose for themselves more profitable investments than public securities. The ability to keep unemployed these sums, and to hold them for an indefinite time proves that no serious damage will be suffered by requiring their conversion into bonds. The large amount of money which is shown by the war-tax returns to be invested at interest in private hands confirms the belief that there is no want of capital among our people. It does not seem to be a rash conclusion, therefore, that at least three-fourths of the currency outstanding on the 1st of December may be funded without substantial damage to private interests. If the remaining fourth could be absorbed by a tax the solution of the problem would them be complete. The people are fully prepared for the payment of a high tax. It may not be practicable to place it at so high a rate as to absorb one-fourth of the entire currency to be called in, but it may approach so nearly as to leave unabsorbed only that portion which will remain outstanding in spite of all efforts to call it in. I will not venture to assert that grave objections may not be made to this scheme. Such objections will be found in the way of every plan. They are necessary results of the proportions of the war which is waged against us and of the enormous sums of money required to carry it on. But it appears to me that upon due examination these objections, if not entirely obviated, will be found to be counterbalanced by equivalent advantages.
1. The first and most obvious objection to the scheme is that it is an infringement of the contract. The notes have been accepted