The Ottawa free trader. [volume] (Ottawa, Ill.) 1843-1916, 1877-11-03

have the privilege of depositing as security for
the gold they owe the treasury the bonds thew
receive, or other government bonds O, green.
backs--thc grcenbacks being called Sgold
funds" and the real object of the scheme
being, not to redeem any greenbacks, at all, in
gold, but To convert them into bonds in a
roundabout way and retire them. The banks
are To make an initial subscription of $4,000
600 gold to the treasury. That is, they are to
rive the government Il credit for $4,000 900
cold, and in return the government is to give
them a credit for S50,000,OOO bonds There is
not to be any delivery on either side-nothing
but a mutual credit Of undelivcred gold for
undelivered bonds, and rice cersd. As fast as
banks sell the bonds they are to be delivered
to them for the purchasers, and the govern
mcnt's gold credit decreased in proportion
When the whole S500O0,0OO shall have been
equalizcd in this way the banks are to give the
government credit for another S50OOO,OOO gold
and receive credit for another equal amount in
bonds-and so on till enough greenbacks shall
have been converted into bonds TO satisfy the
demands Of resumption.
1t will he observed that the scheme is one OF
contraction it proposes to effect resumption
by contracting the currenCy-a method which
Secretary Sherman has declared unauthorized
by law The secretary is not To buy green
backs for bonds, but he is to dcpute that power
which he himself does not possess to the banks
and they are to do it instead, and as fast as
they convert the greenbackS into bonds they
are to be retired This is Il serious objection to
the plan. Further, it virtually admits that re-
sumption cannot be effected under the law
that ii cannot be effected without evading the
| law. Mr. Coe himself says the problem is to
make provision, not only for the S35G,OOOOOO
grecnbacks, but for the S3000OOO00 national
! bank notes and 81 100000, 900 bank deposits
that is. to bring this whole amount Of Sl,656,.
100000 of government and bank Indebtedness
! ND 10 gold value. The banks are not prepared
70 stand the strain and the scheme proposed is
! intended to relieve them of their part of the
burden but MT to relieve other debtors Of Metr
share. 1t is Il sort of jugglery between the
treasury and the banks tor shifting the whole
strain to the shoulders Of corporate and indi-
vidual debtors. He admits, also, that if the
secretary attempts to resume under the law as
it stands, the banks, in sclt-protection, will be
compelled to present their greenbacks for re-
ldemption-a process which would exhaust the
sccretarv's stock of gold and cause the attempt
ed RESUMPTION to end in failure. As this is
precisely what the opponents of the present
law have repeatedly asserted, il is very signiti.
cant to find the New York banks now substan.
TALLY admitting it.
| We cannot believe that the secretary Of the
treasury will accept the plan, or even entertain
| it. He has no right to. The New York banks
have no authority to amend the resumption
act; that is the privilege of congress alone.
Neither have they Il right to enter into part
nership with the secretary, and he with them
to cvade the law and execute it in different
manner from that which itself authorizes
| There is the law Mr.. sherman must take il
as it stands Ii he can resume specie payment
by strictly obeying it, well and good; if he
cannot, it is nobodys fault but his own, for he
! is the author of the law.