The Stark County Democrat. [volume] (Canton, Ohio) 1833-1912, 1876-04-13
THE RESUMPTION FRAU

The radical organs that have any sense
and any regard to truth, are now ac-
knowledging that the Sherman Resump-
ton act of the last Congress is fraud,
and is likely to prove ruinous to thec coun-
try. The act was passed in the interest
of the monied power and to the injury OF
labor and honest business. The follow
ing, from the Alliance Rerieu, radical
organ quotes from the bigoted Cleveland
Leader, which at last admits the villainy
in Sherman's sham. Read it and pre-
serve for future use, when radicals are
disposed to defend their dishonest and
incompetent leaders, 1t shows plainly
how the act operates; .
We are pleased to notice that the
Cleveland Leader, which has hitherto
stood in the front rank, in defense of the
resumption policy Of the administration,
after considering the matter, has also
come to the conclusion that this policy is
radically defective, and asks for an
amendment. AS the Leaders, views on
this point embody the same objections
which we have been urging for some
time, we feel strengthened in the posi-
ton we have taken. This resumption
act, says the Leader, "does not provide
against violent contraction, that is pos
sible by banks returning their circula-
ton, and it contains no provision to IN
spire confidence amongst business men
that resumption will be brought about
without producing financial crisis, The
causes that would make banks surrender
their circulations, are: First, the temp
tation to take up their bonds now worth,
in currency 81 20 and exchange them
for greenbaCks at present valuation, and
have the benefit of their appreciation to
par value by the time of resumption.
Second, the timid.ty of banks about 60
ing through the ordeal of Government
lesuming, even though they have only
to resume in lawful money just as they
are now doing. Thirdly, the fear Of a
financial panic throughout the country.
To illustrate how bank might view
the question, we will select for an exam
pie one with capital Of 100000 This
is invested in bonds to secure $4,000 of
circulation. At market value these bonds
are now worth $4,000 in currency. By
surrendering its circulation and taking
up its bonds and exchanging them for
greenbacks, to be used in its banking
business, it would make the usual divi-
dend, and at the same time make the |
difference between the present price of
legal-tender, which is about eighty-siX
cents and par value by the time of re-
equal to thirteen per cent on
$l20,OOO at 15G per cent on the cost Of
the 100000 worth of bonds, besides the
premium, twenty per cent In addition
to all this would be the freedom from all
obligation to maintain resumption in the
lawful money when the government
to redeem and be enabled
with the $4,000 in solid cash to take ad-
vantage of any revulsion that might oc-
cur from resumption, to make profitable
The foregoing illustration
would be the way many banks would
take in the situation, and danger Of vio-
lent contraction by the winding up of
banks or the reducing of their capital can
thus be seen to be very serious"
The foregoing illustration is not mere
but has been taken from an
actual state of affairs. These causes have
already produced, since the passage Of
the act, a contraction of over twelve mil
lions, and the work still goes on.