The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1875-09-04
Further Particulars Regarding the Method
of Specie Resumption.
WORK OF THE SYNDICATE
The Fractional Currency Not
TO Be Abolished.
POSTMASTER JEWELS POSITION


sation in the Treasury Department and among the
bankers whose places Of business overshadowed by
the Treasury buildings, and, without exception it has
been most heartily applauded The details may be
changed but the basis exactly in conformity with the
intention of the Secretary of the Treasury is in fact
his adaptation of the plan proposed in his annual Export
TO Congress last December in reference the Specie Re-
sumption act passed the following January The fact
that something tangible had last been published and
the manner in which the necessary coin was to be ac
cumulated explained seemed to give air of conf
dence all who had business in the Treasurers Office
to-day
Secretary Brstow's plan, suggested in his report
for Congress to authorize him to make loan
ceeding the total amount of legal tenders remaining
converted at the time of resumption, which conversion
to be into bonds bearing interest at rate not
ceeding the lowest rate which the government might
then be paying in reundng its six per cent securities,
and authority asked TO make these low rate
bonds security for the circulation OF national
banks. The Secretary added:-"Any substantial
useful movement for resumption necessarily involves
supplying the Treasury with increased amounts of coin,
either by increased by adequate loan.
The present condition of the credit of the government
which would be further enhanced by the adoption Of
measures for return to specie basis leaves no room
for doubt that loan for such purpose would be
readily taken at low rate oil interest MeasureS snOuu
also be adopted requiring the banks to hold gold re-
serves preparatory to resumption on their part"
AT the time the report was written there still
unissued of tho five per cent loan nearly $l40 600
The loan had been on the market nearly four years.
and the bonds very gradually increasing
in premium; but Congress did not, in its wisdom,
follow his suggestions but passed plainly worded act
surrcndering to him, Mr.. Sherman expressed it, tho
credit and the moneys of the United States to carry
into effect the provisions of that act.
The time is at hand when that discretion will be
practically carried into effect The Treasury to-day had
advccs that $40 600 900 had been taken though the
last call does not fall due until October IA The next
loan is $780, 900 of four and onehalf per cents
That is under the operations Of the Funding act;
but under the operations of the Specie Resumption
there is no limit to the amount that be sold. He
sell $500, OO0, 600 but as Mr., Brstow will
not be Secretary of the Treasury after the 4th of
March, 1871 his plans and operations will be confined to
good beginning in preparing the golden way. Since
the LIST of August 1874 the Syndicate has subscribed
for $145, 10000 of five per cent bonds
They were paid for mainly by called six per
cent bonds and coupons and whatever gold was paid
had to be under the law Immediately used in calling in
like amount of six per cent bonds and therefore
adding dollar to the coin balance. But this large
funding operation has however, been of great help
the Treasury in way that is not generally understood
The Rothschilds having houses in all parts of Europe
called upon cash the coupons and gold checks
issued registered bonds business which annually
amounts to millions of dollars. These coupons are
rendered to the agent of the Treasury Department in
London in part payment of their subscription the
five per cent loan, and amount of gold that would
otherwise be drawn from the Treasury remains in pos
Of the government 1t will be plainly seen
t,ato thor
the funding of the four and half per cent oan pro-
coed to sell the four and half per bonds or suffer
drain of gold from the Treasury that would dshcartcn
the most enthusiastic advocate of specie payments.
To better understand this, the annual gold interest
amounts to $100 600 600 The demand for the sinking
fund this year will be s3l 900, 900 in gold, the
necessary sales of gold to realize currency not loss
than $50 600 and tho coin expenditures for tho
diplomatic corps and navy total of $3.50 600 000 whio
the estimate of the Secretary for this fiscal year only
$40 100000. Since that estimate made however
increase OF the tariff rates will YIELD it is believed
amount of gold that will cover the necessary gold
expenditures; but that is ALL The necessity therefore,
of beginning at early day to hoard coin will be ap
parent
Your correspondent was informed to-day at tho
Treasury that the calculation the Syndicate to
increase the premium the five per cents to eight in
as December l to take the loan of four and half
per cents. 1t Is understood the Secretary will not
allow any better than fourth of per cent
commission. The Syndicate profess to be able to take
one-third Of the $500, 000 900 the first year. Two
things taken into consideration by the Syndicate
subscribing to the loan
FSrst-The enhanced value of our credit by beginning
to carry out the specie resumption law; and
Second-The appreciation of every denomination OF
United States securities by the fact that the suspension
of finding WILL with the exception of the six per cents
called in for the sinking fund.- leave the old loans undis
turbcd Every bond taken under the plan to be car
ried out will add to the Treasury its face value in gold
and 1t will DO object than ever for the Synd-
cato accumulate all the coupons of United States
bonds held in Europe The substitution of the
bond tho six per bonds held for security of the
national banks will not is supposed interfere with
the gold for the national banks and it even
expected that banks will make liberal purchases of tho
new bonds and take those drawing larger interest
The third proposition to sell the bonds lieu of gold
for their par value in coin 70 the extent necessary to
obtain currency, is nothing more than direct business
transaction instead Of selling tho bonds for gold and
then selling tho proceeds for currency Nor will IL be
necessary to give public notice of the sale OF these
bonds They will he offered in Just such manner rs tho
Secretary may be disposed Tho matter viii be laid
before the President in few days, and IL init
mated to-day that his annual Message to Congress will
that the Specie Resumption act is being
red into effect not only in regard to the coming of sill
yer but the accumulation Of gold
The retirement of national bank notes will he accelcr
ated and in the opinion OF tho Uutcd states Treasurer
many of tho banks having large circulation will
gradually return it, deposit the legal tenders now
qurcd for their redemption, and bank on their United
States bonds. In regard to silver the opinion Is now
held in official circles that IL is mistake do away
with fractional currency 1t is not regarded as probable
that Congress could be induced amend the bill in any
FORM and to bring before the House would be TO riddle
IL with criticisms and amendments The administra.
tion therefore proposes to make the of the best
measure they have.
pnSTMASTER JEWELL. ANn HIS ENlENI1Is