The evening telegraph. [volume] (Philadelphia [Pa.]) 1864-1918, 1869-05-26
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MR.. BOUTWELL, AND SPECIE PAYMENTS.
IfOm tIle N. y. World.

MIR. BOUTWELL, AND SPECIE PAYMENTS.
From the N. y World.
President Grant, in his inaugural address,
mentioned an early return to specie payments
as one of the foremost objects to DC De aimed at ~
the policy of the Government. rms may uVt uV9t
have been a very sagaciOus observation Dut IL
was certainly very correct ana SOUND one. II
required no sagacity 10 make it IL was u mere
echo of what had been thousand tlmes repeated
NV men of sense and reflection in every part OF
the country Ii is as obviously true as II Is that
financial health is preferable to financial disease
Assuming, position too evident Tor con-
troversy that an early return to sound cur
rency is desirable, il is natural to ask whether
the policy of Secretary Boutwell, promises to be
conducive to that end. Is the course on which
he has entered calculated to render the resump-
tion of specie payments more easy or more diff
cult? 1t is clear enough that the Secretary of
the Treasury has lost sight of that object en-
tirely; that he is managing as if no such thing
was in his present contemplation, or could ever
be i'm the contemplation of Congress.
OF course, we can never return to specie pay
ments without a considerable quantity of specie
in the country. The banks cannot safely ven
ture to resume without an amount of specie in
their vaults equal to fourth or a third of their
circulaton-that is to say, seventy-five or a hun
dred million dollars in gold. But where are the
banks to procure it? Obviously from the Trea-
sury or nowhere. Their preparation for resump-
tion, whenever they do resume, will consist in
the substitution of reserves of gold for their
present reserves of greenbacks. This exchange
can be made only at the Treasury. The green
back reserves are debt due by the Government
to the banks. When the Government is pre-
pared to pay this debt, and not before, the banks
can get ready to resume. The preparation will
consist in the transfer of sCventyive millions of
gold more or less, from the Treasury to the
vaults of the banks. Such transfer presup-
poses that the Treasury will be in possession of
at least that amount of gold. Mr.. Boutwell's
policy of emptying the Treasury of its gold
must disable it for supplying the banks with the
means of resumption. 1t cannot transfer to
them what it does not possess itself.
1t is evident that specie payments cannot be
resumed by the banks until they have been pre-
ViOusly resumed by the Treasury. The Govern
ment will probably attempt to keep large
amount of its own notes i'm circulation after re-
sumption. But it will be indispensable fer it to
maintain gold reserve to support the credit of
the notes and fulfil its promise to redeem them
on demand. 1t will need about the same proper
tion of gold to notes that is requisite for sustain
ing the circulation of specie-paying banks. But
when the Government has parted with all its
gold in pursuance of the policy of Secretary
Boutwell,, it must, by some process. get it back,
and even increase the amount, before it will be
in q condition to resume. If there is any cheap
and Ineligible method by which this can be
DONE is not yet apparent.
Mr.. Boutwell, seems blind to the fact that the
expectation of bonds to meet adverse foreign
balances must come to an end, and that he is
Fastening the end by his purchases. When the
expectation of bonds falls off or ceases, one of
two consequences must follow: either we must
import fewer goods and stop the adverse foreign
balances, or we must settle the balances by the
expectation of specie. Whichever of the two is
done, the Treasury cannot repenish its dimin-
ished supply of gold preparatory to resumption.
If importations are stopped, the customs revenue
will fall off, and the Treasury cannot collect gold
enough to pay the interest on the public debt,
much less accumulate surplus for resuming
specie payments. If, the other hand. the
imports should continue to be in excess of the
exports after bonds are no longer available tC
discharge the balance, steady stream of gold
must flow out of the country until our supply OF
gold is exhausted. Mr.. BOutwells contemplated
sales will furnish facilities for the large drain
and rapid exhaustion. And when the gold is
gone, how will the Secretary get it back;
Neither he nor anybody can tell. Nobody is
able to see how the Treasury is then to be re.
plenished and the banks supplied with Il sulii
Cient amount of gold for the early resumption
OF specie payments.
President Grant, who is responsible for the
management of the Treasury by his Secretary
has already forfeited the promise, made in his
inaugural, that his administration would aim al
the earliest practicable resumption of specie
payments. To sell out the gold in the Trea
sury is a public advertisement that this admin
istration does not intend or expect to restore
the currency to soundness; that it does not ever
look far enough ahead to see that we must cease
to export bonds in large quantities; that ou
small supply of gold will then be sent abroad
that impOrtations must afterwards fall off b,
lack of means TO pay for them; and that the in
evitable consequence will be, that the Govern
ment cannot collect gold enough to meet the in
terest on the public debt. This chain of sc
quences consists of such obvious truisms that
is amazing that Secretary of the Treasur
should ignore or disregard them.