New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1875-01-08
Total. $685. Oo..

Total .........................S5SO 3, 0O0.eJ0
The present aggregate paper note circulation is
S7S2. 100000 Tho above will therefore be an in
flation of S21OOO,OOO.
But when this point il attained, and the power Of
the Secretary to contract the legal-tcnder circua
ton is exhausted. may not the National banks con-
tinue to augment the binknoto circulation if they
choose to do sOi Is there any thing in the bill which
leads to tho conclusion that it is designed to limit
the bank circulation to any fixed or even approx
mately fixed sum whateveEf or which restrains or
prohibits an increase beyond any particular sum
SO far as is apparent on the surface, the only lmta
ton is that which prevents the Secretary of the
Treasury from contracting the legal tenders below
$500 900 900; if there be a latent limitation, good
faith requires that it be pointed out is clear that
there is nothing in the phrascOlogy Of the bill which
connects the limit Of legaltender contraction with
any limit upon bank-nOte expansion. In word.
no limit is put upon the amount OF bank notes which
may be emitted, and 80 far as Mr.. ShermanS bill is
concerned the circulation Of the banks may be ex-
banded to any conceivable aggregate.
1t is not likely, of course, that there would DO any
immediate extensive contraction of legal tenders
and expansion Of bank notes if the bill becomes
law There is present motive which would
tempt a rapid organization Of National banks. Sup
pose, however, that the Secretary Of the Treasury
proceeds to put the Treasury in position to redeem
the legal tenders, beginning at the appointed time
suppose that in the course of a year or two hence
hundred or q hundred and fifty millions Of coin
have been accumulated-what, in such condition
of affairs. is likely to happen Why, just this :
that the boarding of greenbacks by banks and pri-
vate persons will begin to go till all nearly all
of them out Of circulation happened with the
demand notes" in 1862 Meantime, pGri passu. as
the legal tenders disappear the National bank note
circulation will be expanded and in process of time
if the redemption continues till the whole legal
tenders retired shall the circulation COM
posed exclusively of bank notes, and not materially
less in volume than it now is, and coin among
the people, mduQre the fact that the legal tenders
have been redeemed. For it IS important to remem-
Der. quite conclusive that the coin issued in re-
dempton Of the legal tenders will not 90 into crcu
ton among the people. or be used as basis for Ma
tional bank resumption, two vital facts: l. That by
the act of Congress of June o. 1873 the requirement
tho banks had previously been under to keep on
hand a certain per centum of legal tenders as re-
serves for the redemption of their circulating notes
was repealed: and, 2. That Mr. Sherman's bill i'm
poses obligation upon the banks to pay theirnotes
in coin on demand now, or in 1872 or at any other
time. In the absence of any legal obligation on the
part OF the banks to resume they are not likely to
90 30 voluntarily. Doing Tree 10 remain suSpen-
sion, they will continue In suspension. Being free
to expand their circulation without limit they will
expand as long as profits warrant expansion
The business of redeeming the greenbacks is. then
wholly Independent of bank resumption. II would
be exactly as if the Treasury were to redeem
o0OooOO0 of Five-twenties with this difference;
that the redemption Of $500 900 of Fvetyeptjes
would leave void in the circulation to be filled
up with bank notes. while the redemption of $780,
100000 of legal tenders would leave void
which, without doubt would speedily be flied
up with National bank issues The real operation of
Mr.. Sherman's bill, if enacted into law and con-
summated. would be, therefore !. To make the
whole currency one of inconvertibe bank notes in
stead Of mixed of legal tenders and bank
notes. @ To convert tho legal-tender notes into
articles of profitable merchandise, without securing
any material reduction in the volume Of paper notes
or bringing tho country single step nearer to con-
diton of specie payments. For it is carefully TO be
observed that Mr.. Shermans bill does not provide
for system of convertible notes, but directs that
the Secretary Of the Treasury shall redeem the legal
tenders after 1873. If the bill means anything it
means that the legal tenders TO be taken as alb
souely out of circulation the fractional currency
is to DO taken out But while q coin substitute is
provided In the case of the fractional currency no
coin or even convertible bank-note substitute
| is provided for the legal tenders. The bank
note circulation is declared unlimited. and
| no obligation is put upon the banks
! to pay their notes in coin demand, does any
existing law leQuirs TIE National banks TO hold