The Indiana State sentinel. [volume] (Indianapolis) 1868-1895, 1874-12-15
THE INDIANA STATE SENTINEL. TUESDAY DECEMBER is. 1874

can be no resumption by the government so
long as the volume of paper currency is largely
bic for that purpose which may come into the
vT,esddoSnnrv In any year. and while no pro-
| Ms ronsr maze i9r the CONVERSION OF
u nearer relation to coin; nor is &c
possible for the banks or people to resume so
now IN circulation continues TO be by law legal
lender Tor All private debts With reference both
things lasts gold will continue
To FLOW FROM US.
and find employment where the natural laws of
trade, unobstructdd by restraining legislation,
make its daily use Indispensable. Tbs secretary,
therefore, recommends Congress to provide by
law that after an early and fixed day United
States notes shall cease to be legal tender as 10
contracts thereafter made. But this provision
should not apply to official salaries or to other
ordinary expenditures of the government under
then existing contracts or appropriations. Be-
tween the day thus to be fixed and the time of
final resumption a sufficient period should
elapse TO enable the people and banks TO prepare
Tor the latter by such gradual processes
In business as Will neither lead TO violent
contraction in credit and values, nor sud-
denly increase the obligations of debtors. The
per dollar to its par value in gold is not only no
necessary element of redemption, but as far as
practicable, should be avoided. If during the
as a bankrupt law, compelling creditors 10 give
acquittances upon the receipts Of less than the
why the Avs r for reden 39 n3ion ' sb69I Is no reason
pei debtors at once to pay essentially more than
they have contracted TO pay. The adoption of
such measures as will not suddenly Increase
the obligations OF debtors. VIII go far TO allay
and disarm whatever popular opposition 10
resumption of specie payment may now exist,
and, besides, would be but just TO the debtor
class. Inc day from which new. contracts mnst
be discharged in coin should be fixed sufficiently
far in advance to give the people and tn banks
Time TO understand It and to prepare them
months will be necessary for that purpose: but.
TO avoid the mischiefs already indicated, this
Day should precede the day OF final resumption
opinion OF the secretary, be extended
BEYOND R YEARS,
and might safely be made as much less
as, in the Judgment Congress-, would Suni-
GENTLY protect the interest OF debtors ana AVOID
the evils of too sudden contraction. The law
should also authorize the immediate conversion
Of legal tender notes into bonds bearing a low
rate of interest, which, while inviting CONVEX
sion, should not be so high as to appreciate the
legal tender notes rapidly, and thereby operate
oppressively on the debtor class. AS an addi-
tional inducement to the conversion of United
States notes into these bonds at a low rate of In.
terest, authority should be given for making
them security for the circulation of national
banks. The law should further provide the
means for the redemption of such notes as may
be presented for that purpose when the
I DtTlOQ VI RESUMPTION Snail nave been
reached. To this end the secretary should be
authorized to make a loan not exceeding the
total amount OF notes remaining unconverted
at the time of resumption, less the surplus rev
enue to be made applicable to such resumption.
tits probable that the gradual and continued
revival of business will so far increase the rev.
enue that a large loan will not be required for
this support; but it is advisable that the secTe-
tary be authorized 10 make it in order 10 meet
the contingency of a failure of sufficient sur
| plus revenues. Such a loan should be made by
issuing bonds to run for such time as the wis.
I dom nfIOnOrpcC NAV CnUUQCf 0nd m ha df- nocaI
of from lime to time as the necessities of the
case may require. In the opinion of the secre-
tary, these bonds should run for a long period,
and should bear interest at a rate not exceeling
the lowest rate which the government NAV then
be paying in refunding its six per cent. securi-
ties. Any substantial or useful movement for
resumption necessarily involves supplying the
treasury with increased amounts OF coin, either
by increased revenues or an adequate loan. The
present condition OF the credit of the govern
ment, which will be further enhanced by the
adoption OF measures for a return to O specie
basis, leaves no room for doubt that a loan for
such purpose would be readily taken at a low
rate OF interest. Measures should also be
adopted requiring the banks to hold gold re-
serves preparatory to resumption on their part.
But the secretary does not deem it proper to
pursue the matter into further de all. If Con-
gress shall conclude, as he earnestly hopes it
will, that the time has arrived sor the enact
ment OF a law having for its object
RESUMPTION FOR SPECIE YMENTs
its own wisdom win supply the neces-
sary methods. That which is of the highest
importance is the adoption Of the definite
policy of resumption. In view of the
great and pressing importance of the speediest
retur n TO specie payment, consonant with
steadiness of business and avoidance of
violent and sudden contraction, discussion
of mere details in advance becomes
of little practical consequence. What
is demanded by the best interests of the govern
ment and the people, and by the highest consid-
~erations of virtue and morality, is, that Con-
gress shall undo that state of things which only
the necessities of war justified or required in
this respect. A wise modification of existing
statutes, which neither enable nor permit the
the restoration of sound currency, will leave
the laws of trade free 10 resume Interpretations,
selves. When the government shall have re-
sumed specie payment, it may be expected that
the Law of supply. and demands; the export of
our gold product vii! greatly diminish, and the
commodity of trade will resume its proper
functions by becoming again a part of the cir,
the policy of resumption, free bankins
may safely be allowed, and the de-
felt of the actual amount of coin
notes convertible into coin, in lieu of an fncon-
vertible paper currency. The business of the
country has not yet recovered from the disasters
of the last years financial panic, the causes OF
which tits by no means difficult to trace. 1t was
the direct and immediate result OF that excessive
DEVELOPMENT of speculative enterprises. over
trading, and imitation of credit which invariably
rency. The almost bOundless resources and en-
ergies of the country must compel the gradual
re-estabiishment of business; but capital, with
Its accustomed sensitiveness to danger, is slow
10 return TO the avenues OF trade. Values are
huctuating and uncertain. Labor receives its
reward in a currency that is unsteady. and
whose purchasing power changes almost daily.
Neither the reward of labor nor the value of
commodities Is measured by any certain stand
ard.
The enactment of a law having for its purpose
the substitution of a sound and stable medium
of exchange for an irredeemable paper currency
will tend to restore confidence, and thus cause a
revival of industries and general business.
There will be no better time in the future to en-
ter upon the work of returning TO a specie basis,
as the secretary feels that he can not too
strongly urge the adoption of the measures he
has indicated, or such others as Will more GER
tainly lead to the desired effect.
THE NATIONAL BANKS.
The report of the comptroller of the currency