The New York herald., 1873-10-08
The TreaSury'S Tinkering with the Forty
four Million Reserve.
CONGRESS- TO KNOW THE REASON WHY.
The Capitalization Policy Causing Trouble
Between Secretaries Fish
and Richardson.

said he understood the President to say that lhe
lorty-four million reserve would not be drawn
upon, and was very much surprised when assured
that nearly three millions had already been used.
Mr.. Cameron is OF the same opinion with sherman,
Morrill, and other Senators that the Secretary
OF the Treasury has exceeded his authority,
and that Congress will be obliged to take
notice OF the transgression when 1t meets in
December. He does not blame the Secretary Tor
purchasing bonds, but thinks he should have linn
tied the purchase to an amount which would not
have reduced the currency balance low TO
make IL necessary to encroach on disputed ground.
Should there be q renewal OF the debate Senator
Cameron is OF opinion that Congress will not leave
the legal tender reserve in doubt, but enact that
the maxim amount Of the legal tender circulation
shall not exceed 1856 100000. In explanation
OF the large purchase OF bonds made during
the panic the Treasury Department says that
neither the President any Of his advisers
thought for moment that ten million OF bonds
would be purchased The amount was made large
for effect and no was more astonished than the
President and Secretary Richardson when nearly
ten millions had been bought in New York, Pllia-
delphia and Washington. The order was then IN
creased two million, and it was when the Secretary
dis covered that there probability Of the de-
mand ceasing that the order to Assistant Treasurer
Hilhouse issued to stop further pur-
CHdSeS db OuCe, lHe dmOuHI lOOiluS UP
sl1, $40, $50, involving an expenditure OF over
sl3,oO0oO0 in greenbacks. This reduced the
currency balance to less than Million with
large disbursements to pe made between
the Goth of September and the Sd OF October. In
the meantime customs revenue receipts had fallen
or fifty per cent, and internal revenue receipts
twenty-five per cent. On the afternoon oil Friday
last the daily statement OF balances showed only
s356, 900 Of legal tenders outstanding but on
the following day the announcement was made
that nearly s2,6oO,OOO had been drawn out; yes
terday .000 and to-day over 100000. Disburse-
ments continue to be large, and receipts decrease
every day, so that it will be necessary to make
further draw on the reserve or cease payment OF
the government liabilities.
Secretary Richardson Is not wholly unprepared
for Congressional action, and while the country
was prasing the President for his course friend
OF the Secretary remarked to him, "The President,
you see Mr.. Secretary, gets all the credit for the
assistance rendered the countryP' To which Mr..
Richardson added, .sYes. and l win get all the
bamen 1t is generally known tnat it was by order
OF the President tina: the first order to purchase
bonds was issued, as year ago he directed the
sale OF $5,O00,000 Of gold and the purchase OF
SIS, 100000 or bonds. When leading republican
Senator'S at the last session OF Congress were
ready to support the resolution offered by Mr..
Sherman substantially censuring Mr.. Secretary
Boutwell, for increasing the volume OF legal ten
ders, the point was made in this correspondence
that the censure would fall on the President, at
that time Mr.. Boutwell, a campaign tour in
the West and his address could not be obtained
though telegraphed Tor in every direction, and Mr.
Richardson, as Acting Secretary OF the Treasury,
merely executed the order OF the Presi-
dent, issued after consultation with Treasurer
Spinner. The resolution was not passed,
but both Mr.. Boutwell, ana Mr.. Richardson
said at the time Of the discussion that
they would regard the course OF the Committee on
Finance as advisory and respect 1t as much as
though form Of Joint resolution signed by the
President. Neither OF these gentlemen, however
doubted his legal authority to do what had been
DONE Should Congress attempt any legislation,
the question, it is said tonight by a prominent
Senator whose opinions finance are much
respected, will be raised as to what extent
the President OF the United States has
authority to require heads OF departments
to obey his orders. For to such an
extent has the custom obtained under this
administration that Cabinet officers take advan-
tage Of it on every OCCASION notable instance
OF this was the transfer OF the State Department
funds from Barring Brothers to Clews, Habcht 4
Co., two years ago. The old and the new bankers
were both informed that it had been done ..by
direction OF the President whereas it was mat
ter OF choice Of the Secretary OF State founded
on political reasons, which the President
cheerfully endorsed. On Saturday last the
President directed that Morton, Rose & Co.,
OF London. should be the successors OF
Ciews, Habicht Co., as the depository
OF consular funds OF the United States, and the
Secretary OF State took occasion to his views
the Capitalization OF all authority In the name
OF the President and to urge upon the secretary
the Treasury the eminent propricty of making the
State Department responsible for all the financial
business relations between our Ministers and Con-
suls. Mr.. Fish further expressed the wish that
hereafter the Treasury Department. should be
closed against all foreign Miuist ers and members
OF legations so that whatever business these
gentlemen had to transact should be done by letter
through the State Department The head ofthis de-
partment thought ithigny improper Tor subordi-
nate of the Treasury Department TO correspond di.
recty with our consus, out urged that 1t also |
should be done through and with the appreciation
of the Secretary OF state. Mr.. Richardson who IS
ready recognize the authority OF the President,
could not agree with MI. Fish, and drew the dis
tinction between the political relations OF consus
to the State Department and their obligations
financially to the Treasury Department. He said |
that he was responsible for the correctness OF |
every consul's accounts, and saw no impropriety |
in holding direct correspondence with the |
consus. He could not yield important
matter, and, If disposed doubted his |
right so to do under existing laws. Mr.. Fish ex-
planned that his object was merely to bring all
those having relations with and to the state De-
partment under his immediate supervision. Mr..
10 the State Department the heads OF other Depart
ments whose officials responsible to the gov
ernment for moneys received and disbursed could |
claim the same privileges, which, II agreed to,