Burlington weekly free press. [volume] (Burlington, Vt.) 1866-1928, 1869-01-08

he time Tor resumption 50 lar ia '1N ANN'
10, warrant the risk of failure Moreover, If
congress is to assign any day at all, we are con-
dent that the one proposed is too early
The aggregate circulation of greenbacks ana
currency is now in round numbers
hree hundred and eighty millions. The amount
# coin in the treasury is not over seventy MIL |
ions About half of this must be retained for |
the pavment of matured interest, which may be |
demanded at any time This leaves a balance of
(say) forty millions Of specie, applicable to the
of legal tenders. OF course no man
proposes to attempt to resume on any such re-
serve as that.
1t is true that practical resumption does not
require that all the greenbacks be actually re-
deemed, but enough must be to bring the re-
mainder up to a specie value What precise
amount will satisfy this condition can only be
learned by experiment. 1t depends upon va
riety of circumstances that cannot be determined
in advance. In the days of State banks, a coin
reserve in its vaults equal to onethird of its cir
culating paper, Governor Morton says, was suf-
fcient to maintain the credit Of one Of those
institutions. Whether similar ratio will hold
good in the case of the greenhacks, is disputed
question We incline to the opinion that 1t
would not There is the same difference between
the old bank bills and the legal tenders, that
there is between a promissory note which is vol
unfairly taken as a full equivalent for coin, and
one which is received for a debt in default Of
any better payment. The person who holds the
latter will dispose Of it at a sacrifice, while the
note that freely accepted retains its full val
ue Now the greenbacks are a compulsory cur
rency, hence their depreciation and the anxiety
Of the holders to have them redeemed. Fur
thermore, the bills of State banks were intended
to be permanent circulating medium, and the
general concurrence of the business public ac-
cepted them as such. The legal tenders were
temporary expeiient. and subject to all the evils
that attend such a currency. In short, the two
cases are so unlike that the precedents Of the
former will be of little use in the present dis
cussion.
But, although resumption need not be post
poned till the Treasury has dollar in gold for
every dollar in greenbacks, it is pretty clear
that even seventy millions may be too small a
sum with which to safely begin. If it was an
nounced to- morrow that Government would ex-
change forty millions of gold for an equal
amount Of legal tenders, there would be a run
upon the Treasury that would speedily empty
its vaults. Those who came first would obtain
the specie, and hoard it; and we should be as
far from permanent resumption as ever. Moth
ing would prevent such a rush but feeling
that it was unnecessary. and a conviction OF
that kind must have more substantial ground
than the offer of Government to redeem no more
than an eighth of its paper issue.
But assuming that resumption can be sue
cessfully effected when the coin in the Treasury
is eoual. dollar for dollar, to one third Of the
rreenback currency. or in round numbers to
one hundred and thirty millions, is there any
assurance that the Government will have that
amount on the lst Of July, 1871? Of course
this will depend on the financial prosperity Of
the Government for the coming three years, and
in fact, the whole question of resumption is too
closely connected with the general condition Of
the Treasury to be considered apart from it.
So long rs the annual reports show a deficit
to be met by additional issues Of paper money,
resumption cannot be effected, for the greenbacks
redeemed would have to be Immediately reissuei
to meet that deficit Now theexpenditures Of the
last fiscal year exceeded the receipt, by thirty
sir millions, and it was necessary to issue legal
tenders to that amount The only aftermath e
was to draw upon the coin reserve in the
Treasury for the balance, and this would have
been equally injurious to the prospects of speedy
resumption. As to the probabilities Of such a
condition Of the Treasury on the day proposed
by Mr. Morton, as to warrant an attempt at re-
sumption, we are not sanguine. If Secretary
McCuloch's estimates should be correct, the
receipts for the next two years will only exceed
the expenditure by twenty-nine millions. Can
specie payments be resumed in three years on
an annual cash surplus Of only fourteen mil
lions? VIII even these estimates be realized
Looking back we find that in 1856 the Secre-
tary estimated a surplus for the year ending
June lst. 1865. of eighty-fye millions. But
there actually was a deficit Of thirty-six mil
lions, or a difference from the estimate Of over
one hundred millions. There must surely be
better fnancering than this, to enable Us ID
talk Of resumption.
The lesson of all these figures, and one that
cannot be too ofen reiterated, is that economy
and retrenchment are imperatiyely demanded,
and even when these are adopted as the policy Of
the Government, the process Of recupera-
ton viii be slow. a redundant and dis
ordered currency is one Of the inevitable effects
Of long and expensive war; and it viii require
time and patience to recover financial health.
The duty Of Government is to resume specie
payments at the earliest possible moment, but
any expectations that two or three years viii
enable Us to effect so desirable consummation,
seem to US unwarrapted by reason or experience.