New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1877-05-14
rREP1RING F0R REsrMrTION.

Very promptly it is announced that Secretary
Sherman has adopted, as means OF preparing
for specie resumption, the course which TIE
TRTrUNE recommended months ago to Sccre-
tary Bristow and Secretary Morrill,, and which
ii has not hcsitltcd to believe that Secretary
sherman, the author Of the Resumption act
would find it advantageous to adopt. The
Secretary has commenced the sale of 4i2 per
cent bonds for gold, at the same time announc-
inc that the gold thus received viii be sold
for legal tenders ut his discretion. The prac-
teal effect is the same as the sale OF bonds Tor
legal tenders directly, but the mode adopted
avoids all possible objection on the score OF
legality. The right 20 sell bonds for gold, in
preparation for resumption, is expressly con
feried by the act OF 1915, and the power 20
sell gold for legal tenders has been repeatedly
exercised and has never been disputed.
Bv some critics, who seem to be in favor of
the Resumption act but opposed 10 It's enforce
meut 1t is objected that this procedure will
only place at the disposal of the Secretary a
large legal-tcndcr balance, which there will be
strong temptation to spend. But the Secretary
canuot spend without an appropriation. And
there is every reason to believe that no rcck
less appropriation of money by Congress, for
the purpose OF checking the movement toward
resumption, could be passed by both houses,
or, if passed, could escape an effective veto.
Undoubtedly the Secretary moves in this mat
ter with the full support of the President. If
so, the veto power would certainly be employed
10 prevent any defeat Of the Resumption act,
either 10y direct repeal or by indirect exhans-
ton Of the means accumulated by the Treasury.
The position Of parties is such that a veto
probably could not be overcome, nor is ii
probable that either house could be brought to
pass q bill known to be regarded by the Pres
idcnt as hostile to resumption.
1t is objected also, that the legal tenders
withdrawn from active circulation ought to he
destroyed, to prevent a reissue of them. But
the law does not definitely provide for any
technical retirement and cancellation of legal
tenders prior to Jan. l, 1879, and, though it
is held by some that the power exists, it would
not be exercised without sharp challenge.
Moreover, there is no reason for destroying
the notes accumulated, and there is excellent
reason for retaining in the Treasury large
balance which may, in any emergency be en-
ploycd to check any temporary stringcncy. It
is conceivable, though not at all probable. that
the gradual withdrawal of legal tenders may
at some time occasion unnecessary and unrca-
,0nablc pressure. The fear that such strin-
gency might result, however unreasonable
would 90 far to produce it, and has, in fact
produced not inconsdcrable difficulty at
other times when legal tenders were SUD
posed to be rapidly retired For cX-
ample, ex-Secrct4y McCuloch showed in
his letters to THE TRIBUNE that scrious APP
prchen>ons and strmgcncy were caused by the
belief that the retirement OF legal tenders was
continuing at the rate OF > 100000 per month
though in reality no cancellation of notes was
taking place, and the only change was differ
cnt entry on the Treasury books. There viii
he no occasion for such appreheusions whether
well or i'll founded if il is known that the legal
tcDdcrs Withdrawn from active use are merely
stored in the Treasury vaults, and can at any
time be exchanged for gold if a real emergency
arises. The key Of the whole plan Is that the
Secretary has ample power to accumulate either
notes or coin, as a preparation for resumption,
the accumulation OF notes being at present,
and in ordinary conditions Of the market, the
more effective.
1t viii be Justly observed that the amount
Of bonds which it is now announced that the
Secretary viii sell for gold is very small. \
Withdrawal of only %j,00D,O0O ~ two months
would not suffice, even though the present re-
tiIemeut of legal tenders, which has averaged
over %1,OO0,O0O per month since Dec. /,
should continue. But the Secretary wisely
makes no announcement Of a desire to sell
more than it is clear that he can sell without
depressing the market price, and he retains
power TO increase sales if the condition of the
market should favor and if the situation. in
this country should permit more rapid with
drawal of notes. The step is tentative. IT is Il
beginning, and in the right direction. We do