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sage of December, 1879 called the attention of Congress to the danger of legaltender notes: McPherson, Handbook, 1880, p. 7.- (g) Both England and France have issued legal-tender notes under circumstances similar to our issue, but retired them directly after the exigencies which demanded them were over: Forum, XX, 385.

II. Legal-tender notes are a dangerous element in the finance of the United States.- (a) Their circulation is rigidamount is fixed by law: Act of May 31, 1878, Statutes at large, XX, 87.- (b) The government ought not to do a banking business.- (1) Government officials have neither personal nor material means to make a fiduciary currency flexible.- (a) Withdrawal would make the gold reserve unnecessary: Carlisle's Speech, in N. Y. Sun, Dec. 3, 1895.- (1) Maintenance of gold reserve has cost us at least $150,000,000 in the last two years.- (d) Whenever government reserve goes down, business interests are thrown into confusion.- (e) Greenbacks prevent banks from keeping gold in the country.- (1) Rates of discount can not be adjusted to demands of international trade.- (f) Greenbacks are always exchangeable for gold.- (1) It is ridiculous to be borrowing gold in order to redeem greenbacks only to re-issue them.

Brief for the Negative.F. B. FOX and B. C. MEAD.

Best general references: T. B. Reed in Cong. Record, 53 Cong., 53 Cong., 3 sess., p. 1834; Henderson in Cong. Record, 53 Cong., 3 sess., p. 1863; Boston Herald, Dec. 4, 5, 14-19, 1894, Dec. 4, 1895; H. W. Peabody in Boston Transcript, Dec. 9, 1895; J. Jay Knox, United States Notes, 119 et seq.; North American Review, 161, pp. 653-662 (Dec. 1895); Pol. Science Quarterly, IV, 620-621 (Dec. 1889).

I. The present system is satisfactory.- (a) Notes have continued equal with gold since the resumption of 1879.- (b) They are a great public convenience.- (1) Demand on Treasury for notes of small denominations is steadily increasing: Quarterly Journal of Econ., VIII, 102.- (2) They are more desired and retained by the banks as reserves than any other currency.- (c) We have the soundest paper currency which has ever existed: Herald, Dec. 5, 1895.- (d) Greenbacks not a dangerous drain on the gold reserve.- (1) Present depletion due to the lack of revenue: Nation, LIX, 435; Herald, Dec. 4, 1895.

II. No adequate substitute is proposed.- (a) Bank notes not a desirable substitute.- (1) Would leave too much to discretion of private bankers.- (x) Bankers controlling volume of money would control prices.- (y) Bankers would be likely to inflate currency in times of excitement.- (2) Profits from issue should go to whole people not to bankers.

III. The retirement of the greenbacks would be injurious.- (a) Panic would follow contraction.- (1) Contraction of currency means a lowering of prices: Mill. Pol. Econ. Bk. III, ch. 8.- (2) Debtors would be injured.- (x) They would have to pay in an appreciated currency: Macvane, Pol. Econ. 123.- (3) Farmers would be injured.- (x) Many of them in debt.- (y) Prices of their commodities would be lowered.- (4) Business would stagnate.- (b) If legal tenders were redeemed at an early date, there would be substituted an interest bearing debt for a non-interest bearing debt.- (1) In past 17 years the government has saved 100 millions in interest: Herald, Dec. 11, 1894.

IV. There is no assurance that state banks would nto be substituted.- (a) Carlisle Proposed them.- (b) Many congressmen spoke in favor of them.