The evening telegraph. [volume] (Philadelphia [Pa.]) 1864-1918, 1870-12-23
srIRrr or TEE PRESS.
Editorial Opinions OF the Leading Journals
upon Current Topios-CompiIed Every
Day for the Evening Telegraph.
TWO WAYS TO SOLvENCY.

proach or suspicion has sought to tarnish the
good name of the Secretary of the Treasury.
Many are from time to time impelled to dis
sent from one or another of his suggestions,
but no man has limited doubt of his perfect
integrity. If there be opportunities afforded
by his high position to enrich its holder, the
whole country knows that he has never sought
to profit by them. With millions subj iect to
his will, he will leave the Office poorer than
be entered it. And his unsparing hostility to
every form and shade of repudiation, his un-
hestating championship of early resumption,
and his manful resistance to the demagogue
race for precedency in diminishing the revenue
and thus arresting the payment of the ma
tional debt, have justly given him strong
hold on the confidence and support of the
better portion of the American people
When, therefore, we are constrained to
dissent from any feature of Mr.. Boutwells
policy. we do it with profound reluctance.
But the close of year affords an excellent
opportunity for a new departure; and we re-
turn to the ject of the Treasury surplus
with an earnest hope that the Secretary may
be induced to review and revise his action on
this head.
Mr.. Boutwell, has now been for nearly
twenty-one months the manager of the
national finances; and he has meantime re-
duced the national debt by little less than
two hundred millions of dollars. This is so
far, excellent. But suppose he had paid still
faster, especially in the outset, when each
million of coin in the Treasury would have
bought considerably more bonds than it now
will-had converted all his surplus above ten
millions into bonds within the first quarter
of his administration, and had thenceforth
kept the Treasury as nearly empty as was
consistent with the prompt adjustment of
every liability, the debt must have been re-
duced, ere this, at least one hundred millions
more than it has been, and the same less the
surplus in the Treasury from ten to twenty
millions. The interest which has since ac-
crued on the hundred millions that he might
have paid off at the outset must be nearly or
quite ten millions; the saving in the price of
the bonds purchased could have been little
less. And what loss would have balanced
this large gain?
Mr.. Boutwell, doubtless believes that the
coin in the Treasury facilitates and serves to
hasten safe resumption. We regard it, on
the contrary, as the chief obstacle to an early
resumption. Let us try to make this plain
Suppose there are in Cleveland or Toledo
two banks-we will call them the First and
the Second National-whereof each has a
capital of one million, with circulation and
deposits to the extent of one million and
half. Their liabilities, immediate and ulti-
mate, are therefore perfectly equal One of
$100,0 in greenbacks, 800, 600 on deposit
and subject to draft in New York, and the
rest OF its assets in the shape of good drafts
drawn against produce shipped to this city,
whereof about $23, 900 falls due daily for the
next hundred days.
This bank-call it the First National-in
our view, is perfectly ready to resume
specie payment, though it's specie is of no
account. The other-which we have called
the Second National-has 100000 in coin
in its vaults, with $4,000 in greenbacks to-
gether equal to third of its total liabilities,
except to its stockholders. But this bank
has loaned its funds mainly to its directors
and their cronies, who have invested them in
wild lands at the far West and grand houses
wherein they severally reside, and so are
utterly unable to pay their notes otherwise
than by giving new ones. This bank is in
solvent in spite of its plethoric vaults, and
will collapse under the first serious trial of
its strength.
All this, we assume, is truth familiar to
men of business; yet it seems to us ignored by
Mr.. Boutwell, in his boarding policy.
If nobody else wanted gold for paper, the
Treasury holds far too much of it. Were it
to resume tomorrow, it would probably be
drained in a week, not because its stock of
coin is SO slender, but because so many have
a profitable use for the article What is
needed to enable the Treasury to resume
without balk or trepidation is an album
dance of gold in the hands of those who
need or can proftably use it, with a
security ready to be exchanged for the
Government demand obligations, which will
be generally preferred to gold. Suppose, for
example, no one wanted gold to ship, while
an American consol ready to be issued
ranged one-half per cent. above par, with
thousands eager to invest in it. The Secre-
tary gives notice, 81 am ready to give coin
for greenbacks, or 1 will redeem them in the
American consop-how many would ask
for gold? and how much in all would they ask
for? Who does not knew that the demand
for gold would be trifiing?
There is some specie really needed even
under suspension. When the supply is boun-
tiful and the need slender, the demand is
easily met. But every dollar boarded by the
Treasury diminishes the supply aud in
creases the urgency of the demand. One
hundred millions dead in the Treasury in.
creases the premium on gold by diminishing
the supply in open market and increasing
the difficulty of satisfying the demand.
Whatever the amount the Treasury, be
yond ten millions at most, we insist that il
should be promptly and vigorously applied tc
the reduction of the debt. Even if the trea
sury should be five to ten millions shor
when a quarters interest falls due, it could
borrow that sum for few days from tn,
banks of this city-they knowing full wei
that it would return to their vaults so soon al
paid out of the Treasury. When we shall hav,
resumed, greenbacks will be taken as gold a
the custom houses, and thus our chief neeC
of coin obviated. Our only peril is vas
foreign demand; but country that produce
sixty to seventy millions of specie per annuu
ought not to be easily broken Ali we nee,
is TO reduce our current purchases of othe
nations IN seVan millions Der week whila u