Against the movement for contraction, which is commended by its simplicity and its tendency to a normal condition of things, we have two adverse policies,--one, the stand-still policy, and the other, worse yet, the policy of inflation. By the first the currency is left _in statu quo_,--stationary,--subject to the influence of other conditions, which may operate to reduce it. Better stand still than move in a wrong direction. By the latter the currency is enlarged at the expense of the people,--being at once a tax and a derangement of values. You pamper the morbid appetite for paper money, and play the discarded part of John Law. You blow up a bladder, without thinking that it is nothing but a bladder, ready to burst. As the volume of currency is increased, the purchasing power of each dollar is reduced in proportion. As you add to the currency, you take from the dollar. You do little more than mark your goods at higher prices, and imagine that they have increased in value. Already the price is too high. Do not make it higher. Already the currency is corrupted. Do not corrupt it more. The cream has been reduced to skimmed milk. Do not let it be reduced to chalk and water. Let there be national cream for all the people. Obviously any contraction of the currency must be conducted with caution, so as to interfere as little as possible with existing interests. It should be understood in advance, so that business may adapt itself to the change. Once understood, it must be pursued wisely to the end. I call attention to a few of the expedients by which this contraction may be made. 1. Any holder may have liberty to fund his greenbacks in bonds, as he may desire; so that, as coin increases, they will be merged in the funded debt, and the currency be reduced in corresponding proportion. 2. Greenbacks, when received at the Treasury, may be cancelled, or they may be redeemed directly, so far as the coin on hand will permit. 3. Greenbacks may be converted into compound-interest notes, to be funded in monthly instalments, running over a term of years, thus reaching specie payments within a brief period. 4. Another expedient, more active still, is the application of the coin on hand to the payment of greenbacks at a given rate,--say $6,000,000 a month,--selecting for payment those holders who present the largest amount of five-twenties for conversion into the long bonds at a low rate of interest, or shall pay the highest premium on such bonds.