One of my first acts in the nature of a financial policy was to establish the Sinking Fund, agreeably to the act of February 25, 1862. Seven years had passed since the passage of the law and four years since the end of the war and yet nothing had been done to provide for the redemption of the public debt agreeably to the promise that had been made when the Government was a large borrower of money and when its credit was depreciated, seriously, in all the markets of the world. In my first annual report, December, 1869, I advised Congress of my action and I recommended the application of the bonds that I had then purchased, amounting to about fifty-four million dollars, to the Sinking Fund, until the deficiency then existing had been met. The step that I then took was taken in obedience to the law, and not from any great faith in the wisdom of the Sinking Fund policy, nor was it from any fear that the Government could not pay its debts whether a Sinking Fund was or was not created. The faith of the Government had been pledged to a particular policy and I thought that the observance of that policy was both wise and just. A government cannot afford to disregard the terms of its undertakings even if a violation or neglect does not work harm to anyone. The payments to the Sinking Fund were made regularly during General Grant's administration, and the credit of the Government was thereby somewhat strengthened. The chief element of strength was in the fact that the payments were such as to astonish the heavily taxed and debt burdened States of Europe. In my four years of service as the head of the Treasury the payments on the debt reached the enormous sum of three hundred and sixty-four million dollars. No one of my successors has paid an equal amount, nor has an equal amount been paid in any other equal period of time by the United States or by any other government. At the time I entered the Treasury the price of gold was at about forty per cent premium and when I left the Treasury it was at about twelve per cent premium. In the summer of 1869 I entered upon the policy of selling gold and buying bonds. The sales and purchases were made by the Assistant Treasurer in New York, but the bids were reported to me and by me accepted or rejected. A leading criticism was this: It was claimed that the simple method was to buy bonds in gold and thus to secure the bonds by one transaction.