Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1876-12-07
The Treasury Report.

portion OF the national debt in four-and ahalf per
cent bonds. Issues Of these bonds to the extent
of S35 674 $50 have already been made and the re-
| funding operations still in progress. Against
these $50 1000 600 OF hve-twenues nave been called
The Secretary then proceeds TO consider the
question of resumption, taking the ground that the
United States Is fully committed to resumption In
| 1879 "by the method of redemption OF U nited
States notes current as lawful money, and the sub
stitutiOn therefor OF national-bank currency, tne
equivalent of money by its convertIbllity INTO com
| on demand" lie makes strong argument Tor a re-
turn TO the specie standard of value, Dee'ng 'na'
| the troubles likely to grow out oil enforced re-
sumption are greatly exaggerated, and That the eA-
tinction of irredeemsble notes current as money,
and the enforcement Of payment IN com on ue-
mand if the national bank notes treated as 'he
equivalent Of money are obviously alike OF ma
tlonal obligation and public necessity. The only
question that remains he says, is to consider the
| adequacy of the provisions of the resumption act.
lie deems it essential that, in addition to the au-
| thorty Of the Secretary of the Treasury already
| conferred to provide for redemption of legalten-
| der notes on and after the day provided Tor re-
| sumption, by the accumulation OF an adequate
| amount of gold TO meet the volume of three hun
bred million dollars of lega-tender notes, which
| will then be outstanding, by the sale of United
States bonds, authority be given him from time to
| time, as he may deem eNpedient and the state OF
| finances admit, to fund these notes into a bond
| bearing rate of interest not more than four ana
one half per cent, with not less than thlrty years
to rum with such limitations as to be so funded IN
any given period as Congress. in its discretion
may determine.
| x sudden accumulation of gold in amounts
sufficient to meet so large demand as that con-
| tempated in January, 1879, is deemed impractical
Bile; while to accumulate in advance Of that time
would be attended with necessary loss of interest,
| would be likely to disturb money exchanges, and
e.nbarrass the funding Of our national securities.
The present time IS agreed as opportune for the
gradual withdrawal Of these notes. Ii is believed
they would not be greatly missed from the cjrcu-
| sting medium as their place will be readily sup
| piled by the issue of national bank notes under
| This act.
| The demand for national currency is so limited
that the contemplated reduction of notes in excess
| of 10000, 600 is not probable, and the whole
| amount unless other measures are taken, must be
| redeemed in coin. Perhaps all would not be pre-
sented for redemption, but it would be unsafe to
make provisions for less than half While the
cessation of the sales of gold will add something
| to the required stock it will not add enough. So
| the notes must be gradually withdrawn. There
has been total decrease in circulation since Jan
uary 1875 Of 100000, and from large accumu-
| tions Of money at the money centres and the lack
of demand for it, it is apparent that the volume Of
| currency ID largely in excess of the real demands
of legitimate business, and that portion of the
| legal-tenders might be gradually withdrawn with
| out embarrassment TO the country.
In the interest Of permanent redemption and as
| u means OF maintaining tue same, IL Is deemed
important also, II not quite INDISPENSABLE that pro-
| vision should be made requiring the national
banks to gradually provide coin in such ratio as
the Secretary Of the Treasury may direct, and to
hold the same as a part Of their legal money re-
serve, that said reserve the first day OF Jan.
1879, shall be equal in amount to the entire re-
serve required by law. To the same end as the
fractional currency is Withdrawn, it is deemed ex-
pedient that not only the vacuum caused thereby
in the matter Of change should be made good, but
that, as additional change, the volume of silver
should be increased to the amount of at least
eighty millions of dollars and silver made legal
tender to the amount of ten dollars in all cases,
except the obligation of the government of the
United States and the customs due.
| OF silver change already S22 900 900 has
al currency redeemed. Legal tenders have
been reduced by redemption and the issue of ma
tional bank notes to the amount of $l4, i66, 2S4.
during the the year, leaving the amount of legal
tenders 1857 ,535,7l6.
| THE SILVER QUESTION.
Taking up the question of the silver dollar and
the pay nent OF the debt in silver, the Secretary
admits that the pledge of the payment in coin does
not in terms discriminate against silver. but argues
that the universal understanding at the time the
pledge was given was that the payment was to be
made in gold. He says 1t will nor be questioned
by anyone conversant with the question at that
time that the popular impression not to say gen.
eral conviction. was for payment in gold. This
belief may have obtained from the fact that the
interest on this class Of obligations, payable in
coin, had uniformly been paid in gold, that the
customs receipts had been set apart to this end,
and that these were paid in gold. and that the sill
yer dollar had, as money Of payment, therefore
gone into general disuse, especially in all large
Transactions, and could scarcely be considered as
contemplated In any measure having for its object
10 provide for payment of sums so ample as the
interest of the public debt at that time amounting
| to the sum of one hundred and thirty million do.
lals. This view OF the subject receives no incon.
siderable support, also, in the legislation of Con-
gress IN 1873 by which the legal tender quality of
the silver coin was limited to five dollars. BY
force OF the laws Of trade, quite independent Of
Congress, the legal tender silver dollar had &C.
tually disappeared from circulation as money and
although not abolished by act Of Congress, it did
not as matter of fact, exist for commercial pur-
poses and did not enter into money payments
The object and intent Of the act of 1873 was con-
fessedy to give to gold the precedence in the stat
utes OF the country it held in the commercial
world practically, and to declare the gold dollar in
law to be what 1t was in fact, the representative
OF the money unit. Gold had for many years
been treated as the principal money of coin pay
ments in legislation and in the transaction of the
Treasury department.
BY the act of 1868 the Treasury was authorized
to receive deposits Of gold coin, thus indicating
that its obligations called for pay ment in gold and
in silver. This provision, it will be seen. ia in
consonance with the fact that our foreign ex.
changes for many years have been made upon the
gold basis, and thus it is apparent that the gen
era understanding has been of late years, for the
consideration stated, that the money of coin pay
ment was gold, and an obligation to pay In coin
required payment in gold coin.
Whatever may be thought he adds of the right
to pay these public securities in cheaper money
twlll remain true that it is lawful to pay them in
gold coin, and that the belief that they were to be
so paid has practical value in the probable re-
ducuon OF the public debt equal to one fourth OF
the amount of the annual interest thereon. The
Secretary respectfully submits that the coin pay.
ment to which the faith Of the nation was pledged
in 1869 was gold and not silver and that any other
view of it, whatever technical construction the
language may be susceptible of, would be regard.
ed doubtful good faith, and its probable etfec,
pfejudcial to the public credit.
In connection with resumption, attention /,
called to the fact that because of the exhaustion
of appropriations government no longer pays ex
press charges on notes sent in for redemption ant
that in consequence the paper currency is rapid,
becoming unfit for circulation. An appropriation
Is earnestly recommended.
Il THE NATIONAL BANKS.
The report of the Comptroller of the Currency
contains full statistics of the reserves, taxation
dividends, earnings, and losses of the nationa
banks, together with summary of their resource.