The Hillsdale standard. [volume] (Hillsdale, Mich.) 1851-1909, 1877-08-28

anxious 20 convey to you personally
what have done and must do in ole
dience to the provisions of this act.
is said that the law is defective, but, /
the great object and policy of the Law
is right, the machinery OF the Law
could easily be changed by Congress
That resumption can be secured anC
ought to be secured under this law, i
will be my purpose TO show you, and
shall not hesitate TO point out such de
fects in the law as have occurred 20 ms
in its execution.
THE MODES OF RESUMPTION.
There are two modes of resumption
either TO diminish the amount of notes
TO be redeemed, which is commonly
called a contraction of the currency, ol
by the accumulation of coin in the
Treasury, to enable the Secretary Il
maintain resumption. The one practi
cal defect in the law is, that the Secre
tary il not at liberty To sell bonds o.
the United States for United States
notes, bat must sell them for coin. Al
coin is not in circulation among the
people, he is practically prohibited
from selling bonds TO the people, ex
cept by an evasion OF the law, OF
through private parties. Bonds are in
demand and can readily be sold at pal
in coin, and still easier at par, or at q
premium, in United States notes. The
process of selling for United States
notes need not go far before the mere
fact that they are receivable for bonds
would bring them up TO par in coin,
and that is specie payments.
But the reason of the refusal Of Con-
gress to grant this authority, often
asked OF il, was that il would contract
the currency, and this fear of contrac-
tion. has thus far prevented Congress
from granting the easiest, plainest and
/ surost mode of resumption. To avoid
contraction, it provided that National
bank notes may be issued without linn
it as to the amount, and that. when is
sued, United States notes might be re-
tired to the extent of four-hfths of the
/ bank notes issued. This was the only
provision for redeeming United States
notes that Congress made or would
make, and this, 1t was supposed, would
reduce lhe United States notes to $500,
600, 900 before January /. 1879. The
actual experiment only proves the fol-
ly Of the cry we had for more money,
more money.
HERE WAS FREE BANKING,
A free and almost unlimited right 10
everybody 10 issue more money, but
unluckily for visionary theories, II was
money that had 10 be secured, not
wild cat money, but money that people
could sleep upon without fear of break
ing. The result was that under free
banking the issue Of circulation has
been far less than was expected, and,
therefore, the reduction Of United
States notes was less. Still there was
some reduction.
Greenbacks have been retired under
the act Of January, ISIS, 20 this time
20 the amount Of SO, ,905, 700 and near
30 millions Of circulation were issued
10 National Banks.
Since the first Of March last the re-
duction of United States notes has
been s., ,2Gi, and this reduction
was preceded by new circulation issued
TO banks, amounting 10 near 81 800, ,OOO
do not say that this IS the only re-
duction OF the currency that has hap
pened, but it is the only reduction that
was made by the United States. The
national banks, under a different law,
and from the very necessity OF free
banking, are at liberty 10 retire their
currency as well as 20 increase 1t, and
this has been done by them since the
lst OF January, 1875, 10 the amount OF
S36.62i,6l2. But this Is a reduction
effected by each hank, guided. by its
own interest, and the circulation 1t can
safely and prudently maintain.
There are now deposited with the
Treasurer by private corporations,
banks aud individuals, S57,l70,0 900 Of
United States notes. OF this there
deposited by the National Banks at
their last statement, made June %,
sii, lj0, 600, and they have in cash re-
serve held by them, So, 800, 90 more
than the amount required by law,
clearly showing that there is no want
OF chrrency when demanded for the re-
quirements Of business.
Since January /, TT, the United
States has issued S3l, 236. 900 Of silver
coin, and has redeemed with that S2l f.
go. 900 fractional currency, now almost
superseded by silver coin, and also
holds 81, lG0, S5S OF United States notes
for the redemption Of fractional cur
rency still outstanding. In this there
was no contraction but a substitution
of coin for fractional currency.
IL was an error To make the retire
meut Of United States notes depend
upon the issue Of bank notes. The
two had no relation % each other, but
the retirement Of United States notes
should depend entirely upon the
amount necessary 90 he withdrawn, TO
advance within the limited time the
residue TO par in coin, and the simplest
mode of doing this was 10 authorize
THEIR CONVERSION INTO BONDS
at the pleasure of the holder, the bonds
10 bear the lowest rate OF interest that
would in ordinary times be maintained
at par in gold. To this the objection
is made that We convert a nOn-iuterest
bearing note into an interest bearing
note, and that Is true, but what right
have We as a nation, or has any bank,
or individual, 20 force into circulation
"a money it's note. upon which il pays
no interest Why aught not anyone
who issues n promise TO pay on de-
mand be made 10 pay 1t when demand
ed or pay interest thereafter What
right has he in law or justice 20 insist
upon maintaining in circulation his
note which he refuses 10 pay according
TO his promise, and which he refuses 10
receive in payment of a note bearing
| interest? A certain amount of United
| States notes can ,be, and ought to be
maintained at par in coin, with the aid
/ OF a moderate reserve held in the
/ Treasury, and 90 the extent that this
can be done they form the best posi-.
/ BILE paper money, debt OF the people
without interest, OF equal value witt
coin. aud more convenient TO carry and
handle. Beyond this tho right to issu,
paper money, either by the Govern
meut or by banks, is dangerous ox
ercise Of power, injurious 20 all class
es, aud should not continue single
day beyond the necessities that gave II
birth.
But, IL Congress should see prope
10 confine the process Of resumption
60 the present law, we have still
THE SECOND MODE
of resuming, by accnmulating colt
gradually, SO that wnen the time Fixed
I for resumption arrives the Treasury
nav be able % redeem such notes nj
are presented. In this respect the re
sumption act is as full and liberal a.
human language can frame II. Th'
Secretary il authorized 90 prepare fol
resumption, aud for that purpose tc
use surplus revenue aud sell either O
the three classes Of bonds, all OF which
4 III.