The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1874-04-23

except In cases where the lew authorizing the
issue Of any such obligations hes expressly provided
shat the same may be paid In lawful money, or In
other currency than gold and silver; but none OF
said interest bearing obligations not already due
shall be redeemed or psad before maturity, unless
at such times a. the United states notes shall be
convertible into coin at the option OF tine holder,
or unless at such time bonds Of the United states
bearing lower rate Of interest than bonds 10 be
redeemed can be sold ~ par in coin. and the
United States also soiemniy pledges ITS faith 70
make provision at the earliest practicable period
coin.
This act stsH remains - continuing pledge OF
the faith OF the United States TO make at
the earliest practicable moment for the redemp-
ton OF the United states notes In coin.
THE LEGAL HEssRvE.
A declaration contained In the act Of June %,
1864. created an obiigation that the total amount
Of United States notes issued or to be issued
should never exceed slOaOoo,ooo. The amount
in actual circulation was actually reduced to
$3.50 1000, at which point Congress passed the
act OF February T. 1868, suspsndng the further re-
duction of the currency. The a. 600 have even
been regarded as reserve 70 be used only in case
Of an emergency. such as has occurred ON several
occasions and must occur when, from any
cause, revenues suddenly fall below expenditures;
and such reserve is necessary, because the frac-
tional currency, amounting 10 s5o.oooooo. is re-
deemable in legal tender on cali. 1t may be said
thar such . return Of fractional currency for re-
demption is impossible; but let steps be taken for
return to specie basis and 1t viii be found that
silver Will take the pass Of fractional currency a.
rapidly as 1t can be supplied
WHEN WE NAY HAVE FREE BANKING.
When the premium on gold reaches sufficiently
low point, with the amount Of United sta,es notes
to be issued permanently within proper limits and
the Treasury so strengthened ~ to be able to re-
deem them In coin on demand, 1t win then be safe
to inaugurate system OF tree banking, with such
provisions as to make compulsory redemp.
tion OF circulating notes Of banks In coin,
or United States notes themselves, redeemabe
and made equivalent to coin, as q measure
government in condition 10 redeem It's notes in
coin at the earliest practicable moment. The rev.
enues Of the country should be increased SO az to
pay the current expenses, provide for the sinking
tanned In the Treasury in gold. am not be-
lever in any artificial method OF making paper
money equal to coin when coin Is not owned or
held ready to redeem the promises to pay; for
paper money Is nothing more than promises to
pay, ana Is valuable exactly in proportion to the
amount Of coin tnat it can be converted into.
HOW THE GOVERNMENT MY GET GOLD.
While coin Is not used as . circulating medium.
or the currency OF the country Is not convertible
into it at par, IL becomes an article OF commerce
as much as any other product. the surplus viii
seek foreign market, as win any other surplus.
The balance Of trade has nothing to do with the
question. The duties on imports, being required,
in coin, create limited demand for gold, and
about enough to satisfy that demand remains in
the country. TO increase this supply see NO way
open but BY the governments boarding through the
means above gwen, and possibly by requiring the
national banks to aid.
THE DISTRIBUTION OF THE CURRENCY.
1t is claimed by tas advosatss Of the measure
herewith returned that there is m unequal disri-
button OF the banking capital OF the country. /
was disposed to give great weight to
this view Of the question ct nrst, but,
ON rejection, it will be remembered that
there stall remains $Aooo.coo Of authorized bank
note circulation. assigned to states having less
than their quota. not vet taken. In addition to
this. the states having less than their quota OF
bank circulation have the option Of $4,000, 600
more to be taken from those States having more
than their proportion. When this Is all taken up,
or when specie payments are fully restored. or are
in rapid process of restoration viii De the time to
consider the question Of "more currency.n
U. 8. GRANT.
EXECUTIVE MANSION, April %, 1874