The evening telegraph. [volume] (Philadelphia [Pa.]) 1864-1918, 1871-02-13
THE TREAsURY's COIN RESERVE.

views contained in the volume before US to
be vindicated before the commission
THE TREASURY'S COIN RESERVE.
From the N. Y. Sun.
Before Mr.. Boutwell, leaves the Treasury
Department, which it is on all sides declared
he is soon to do, we wish to express our ap-
proval of practice of his which has not met
with that support from the leading organ of
the administration to which it is entitled.
We refer to his resolute holding on to his
coin reserves. Mr.. Trumbull in the Senate,
and Mr.. Greeley in the Tribune, have never
lost a chance of condemning this practice,
and of advocating the emptying of the Trea-
sury of its gold for the useless purpose of
reducing the funded debt. Their complaint
is that the country is losing the interest
money on the gold held in reserve by the
Treasury.
There is no sounder or more self.evident
proposition than that in all banking opera
tioDs certain amount of cash should always
be kept in hand. If it be not necessary that
it should be in coin, as may be urged is the
case during suspension of specie payments,
coin is nevertheless needed for other pur-
poses. 1t is necessary at the present time
especially to show that beneath tho noun
tain of paper money transaction disclosed by
the bank and Treasury operations, there is
something at the bottom which denotes some
degree of actual solvency and real ability to
pay.
We have at this moment an irredeemable
paper circulation of about seven hundred
millions. Now, who but the most crazy advo-
cate of paper issues and no-money banks can
say that this gigantic pile of paper money re-
quires no coin basis?
Let il be always borne in mind that our
Government is plying the business of
banker. 1t issues and keeps out in circula-
finn hnndral roilIippc in
on demand, and these notes form the basis of
three hundred millions more of bank notes,
by being made legal-tenders for their redemp-
ton. The banks are exempt from the neces-
sity of keeping anything but greenbacks to
redeem their bills, and thus they do without
specie almost entirely. The last annual re-
turns show that our sixteen hundred and
forty eight banks held on the 2Sth of De-
cember last but twenty-six millions against
an aggregate of circulation and deposits of
over eight hundred millions.
If the Government is to keep no coin re-
serves on hand, what sort of a show would
the country make in the eyes of reasonable
people everywhere in respect of its ability
or intention ever to resume coin payments
The banks and the Government would be
alike banking on nothing. Together they
would use seven hundred millions of demand
notes and five hundred millions of deposits.
And if the Government is to strip itself of
gold, as Mr.. Trumbull and Mr.. Greeley
recommend, the only solid basis of this enor-
nous aggregate of twelve hundred millions,
due on demand, would be the beggarly sum
which might chance to be found in the vaults
of the banks.
The current coin balance of the Govern
ment only averages between forty and fifty
millions over and above its demand obliga
tiops, and this is all the basis it holds to pay
its demand notes of four hundred millions.
Talk about the Government losing interest
on its specie Doesn't it gain the interest on
four hundred millions of paper money, and
is it too much TO ask that it shall show some-
thing in hand towards paying this immense
amount of disregarded obligations? Suppose
the Government does not intend to pay its
notes, doesn't it owe something to the old
fashioned prejudice of honest people, that
when paper money is issued there ought at
least to be something behind the counter to
redeem It'll
Our paper money fabric has stood for seve-
raj years with great steadiness, owing to the
large and constant annual addition to the
public stock of precious metals, which has
precluded the necessity of any urgent demand
on the banks or the Government to redeem
their circulating notes; and also to the i'm
portant, perhaps more important, fact that
the Government bonds, issued in such enor-
nous amounts to defray our war expenses
have become q considerable part not only of
our own currency, but of the currency of the
whole commercial world. They are equiva-
lent to money on every exchange in Europe,
and answer every purpose of coin in settling
our foreign balances. Until those bonds
shall have passed into the hands of perma-
nent investors, as sooner or later they must,
they will continue to fulfil this function,
and continue to check as they now check,
the demand for specie to pay our interna-
tional trading aud interest balances. But
when the period arrives that this fruitful
source of means to pay foreign debts is dried
up, and bonds are no longer available in
large amounts as remittances, then the natu-
raj and legitimate demand for specie will re-
vlve, and we shall see the paper money theo
rizers put to flight, as they always have been
in past times. And if, when there shall come
real want and demand for specie in tha
country, the condition of the banks and
the Government should show an indebtad-
ness due on demand of twelve hundred
millions, and exhibit only the present meaore
reserve in the bank vaults of fve-and-twenty
millions of com, who can fail to see what
ruinous results must ensue? The Treasury
Department could not then, as by the con-
seryative policy we applaud it has been able
to do thus far steady the vast shaky pile; nor
could it, as it did on the famous black Friday,
save ihe country from the blasting effects of
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