New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1876-08-01
CONCERNING DESCRIPTIONS

CONCERNING RESGNPUON
The following letter cmbodIcs several I'M
portant inquiries in small compass, and de-
serves attention:
TO thcEdttOr Of me Trtbunc.
SIR: would Ike to call Your attention 10 The follow
10 begin to rCSlmci Would The Government he able
70 resume ana il .o 3. Would It do to contract
the cuYTcncvl I. was not gold frcquhN ~ hh'ut VIC
same premium before the SUSPENSION Of 800 pay
ncutsl >. What objection !, there. aside nom Gn',-
cess in revenues for the purpose ~ buying UP paper
notes ana retiring them rom circulation - .
Sidicrrtic, y. J., July 20 1870 H. t. H. 0F"l'".
That many persons doubt the ability Of the
Government to resume in 1870 is the most
unfortunate fact in our financial position. II
is therefore the more important 10 show undcr
what circumstances resumption l. possible.
The common belief that "nO special prepare
:" ton has been made 10 that end y Is IN some
degree erroneous. If it is intended to reach
resumption by funding the legal tenders, or
bv sale of bonds and accumulation OF gold, or
by both. the steady appreciation OF tie credit
of the Government has been an indispensable
step toward resumption in either case. Duilng
tin past six months the action of the Treasury
has been hampcrcd, first 10y the failure OF
Congress to make such notifications in the
form of bonds TO be issued a. To facilitate
their sale, and second by the constant effort
to rcpeal the act, and the probability that Wig
orous stems for its execution ut this time might
strengthen those efforts. The act of 1879 re-
Guircs that on the 1st day of January,
1879. the Secretary of the Treasury shall
redeem in coin lcgal-tcndcr notes as fast %
they may be presented This is resumption
of specie payments, though the process OF
, linn. tg., .,,,,c
time thCrca ter
The power of the Government TO resume
depends largely upon the construction given
70 the act of 1S75. II is held by Senator
sherman, who reported the bill to the senate
As Chairman of the Finance Committee that
the act authorizes the sale Of any amount of
bonds that may he necessary OF either OF the
classes described IN the Funding bill. This
construction is given by many eminent au-
thorilics, financial and legal; it was accepted,
we are assured by the late Secretary oi the
Treasury. and it is the only Interpretation
which does not papaby defeat the min in
tent OF the act. We may conclude that 1t
will be adopted hy any Administration which
sincerely desires 10 execute the act in good
faith. In that case, any amount OF bonds
necessary to accomplish the purposes of the
act may be sold, either OF five per cents. four
and half, or four per cents. 1t is believed
that four and half per cent bonds could now
be sold at par if the changes in form urged
bv the late Secretary of the Treasury had
been made. But there is no reason to doubt
that five pcr cent? could be sold, in quantity
sufficient to accomplish the object of the act.
The payment Of lcg1l-tendcr notes is con-
traction OF the paper currency. Prior to the
beginning Of redemption, there is no authority
| to contract the currency i'll Il technical sense,
but the Secretary has mdoubtcd power to hold
in the Treasury as large a balance as he may
deem requisite, either in coin or legal tenders
| If he holds n large currency balance, that is
| i'm practical effect Il contraction Of the cur
rency, though the notes thus held would be
LEGALLY included in the legal tenders " ont
standingn We do not know that the
Secretary has any power to "buy up
and retire. paper notes prior to the day
| fixed for resumption. But he has power
to buy up and hold such notes, as a
| balance in the Treasury. He has author
ity under existing laws. without modification,
to increase that balance as largely as he may
be able to increase it; not only by using
surplus gold but by buying gold with bonds,
and selling that gold for currency. We know
of no law limiting the amount to which the
| legaI-tendcr balance may thus be raised
| Those who object to contraction would object
| to this proceeding, but, 50 far as we can see
| ONLY for the same reasons for which they
would object to contraction III any other FORM
apart from its legal bearings. That it would
| he wise, III preparation for resumption, TO re-
duce considerably the amount of legal tenders
| in actual circulation, as well as to accumulate
| reserve of coin to meet those remaining in
use, will scarcely be denied by those who
| really desire resumption