The weekly herald. [volume] (Cleveland, Tenn.) 1876-1888, 1877-08-23
point out such deieols in The Law as have occurred
70 me In lie execution.

z u NMO mulfn Oh lttuMltluus tlAuti W
diminish the amount OF notes 10 be redeemed,
which is commonly called o contraction Of the
currency, or By tho accumulation OF e0in IN the
Treasury 10 enable the Secretary 10 maintain re-
sumption. The one practical defect In the Law Is
that the Secretary Ia not At liberty 10 sell
bonds Of the United States for United States
notes, but must sell them for coin. AZ coin Is not
IN circulation among the people, be IL practically
prohibited from selling bonds 10 the people, eX-
cept by an eVagion OF the law, or through private
parties. BOnds are In demand, aud can readily be
sold az par 10 coin, and still easier at par, or az q
premium, IN United States notes. The process OF
selling for United States notes need not so Tar be
fore the mere fact that they are receivable Tor
bonds would bring them Up 10 par In COIN ane'
that ~ specie payments.
But the reason OF the refusal Of Congress TO
grant TINS authority often asked OF H. was tliat u
would CONTRACT the currency, and tbs Tear OF con
traction has thus far prevented Congress from
granting the easiest, plainest and surest mode OF
resumption. To avoid contraction, II rfoNlden
that National bank notes may be Issued NllhOuIt
limit as 90 amount, and that, when issued, United
States notes might be retired 10 the extent or
four-rfths OF the bank notes Issued. tbs was tue
only provision for Tedeemng United States notes
that Congress made or would make, and this.
u was supposed, would reduce the United btates
notes 10 100000 600 before January 1879; The
actual experiment only proves the folly OF the CRY
we had Tor more money, more money
HERE WAS FREE BANKING,
A free and almost unlimited right TO everybody 10
issue more money, but unluckily for visionary the
crisis Il was money that had 10 be seoured-not
Nlluscdl money UhA uuutN luhN ptNHlt tuulu nlttH
upon without fear OF breaking. The result was
that under free banking the issue OF circulation
has been far less than was expected, and, therss
fore. the reduction OF United States notes was less
stu there was some reduction.
Greenbacks have been retired under the act OF
January, 1876, 10 this timo to the amount OF t22,-
900. 700, and near t29.0O0,OO Of circulation were is
sued TO National banks.
Since the LIST of March last the reduction OF
United States notes has been S5,l45, 264, and this
reduction was preceded by new circulation issued
IN hunHg nmnlmF1un IN nnnr GG r0 mn
do not say that this Is the only reduction OF the
currency that nas happened, but u u lbe only re-
aucuon mat was made by ne United states' The
National banks, under a different law-Bph from
the very necessity OF free banking, are at liberty
10 retire their currency as well as TO increase II,
ana this has been done by them since the lst OF
January, 1875, TO tho amount OF S36,t2l,6l2. But
this is a reduction effected by each bank, guided by
It's own interests, and the circulation IL can safely
and prudentlY MAINTAIN.
There are now deposited with the Treasury by
private corporations, banks and individuals, $751;.
10000 OF United States notes. or this there were
deposited by the National Banks at their lsst
statement, made June %, ga, 50,0O0,a and they have
in the cash reserve held by them, az, 100000 more
than the amount required by law, clearly showing
that there lie no want OF currency when demanded
for the requirements OF business,
Since January /, 1877, the United Statns has is.
sued t34, 236, 900 OF silver coin, and ba&redeemed
with that S2l 100000 fractional currency, now al
most superseded by silver coin, aud also holds
S~s,I6O.s5s Of United States notes for the redemp-
ton Of fractional currency still outstanding. 10
this there was no contraction but q substitution Of
coin for fractional currency.
IL was an error TO make the retirement Of Unit
ed States notes depend upon the issue of bank
notes. The two bad no relation TO each other, but
the retirement OF United States notes should de-
pend entirely upon the amount necessary to be
withdrawn, 10 advance within the limited time
the residue TO par in coin, and the simplest mode
OF doing this was TO authorize
THEIR CONVERSION INTO BONDS
At the pleasure Of the holder, the bonds to bear
the lowest rate Of interest that would in ordinary
times be maintained &c par in gold. To this the oh.
lection is made that we convert q non'interest-
bearing note into an intereBt-bearinR note, and
that is true, but what right have we as q Nation, or
hasany bank or individual, TO force into circulation
as money Ito note upon which 1t pays no %inGeresti
Why ought not any one who issues IA promise TO
pay on demand be made to pay IL when demanded,
or pay interest thereafter What right has he IN
law or justice TO insist upon maintaining in circu-
his note which he refuses to nay according
TO his promise, and which 10 refuses 70 receive IL
payment OF q note bearing ~inisiest2 A certain
amount OF United States notes ren be, and ought
TO be maintained at pur IN coin, with the aid
OF q moderate com reserve held in the
and 70 the oxtsnt that this
can be done they form the best possible paper
money-a debt of the people without interest, of
equal value with coin, and more convenient TO
carry and handle. Beyond this the right to issue
paper money, either by the Government or by
banks, is a dangerous exercise Of power, injurious
to ali classes, and should not continue q single day
beyond the necessities that gave 1t birth.
But, II Congress should see prOpertO contine the
UIuOGch VI resumption W NbC plCeNhb = VIC law
still
THE SECOND MODE
OF resuminR, by accommodating coin gradually, 80
that when the time fixed for resumption arrives,
the Treasury may be able to redeem such notes as
are presented. In this respect the Resumption
Act Is as foil and liberal as human language can
frame il. The Secretary is authorized to prepare
for resumption, and for that purpose TO use the
surplus revenue and sell either of the three classes
of bonds, all OF which are now at or above par in
com. The power can be, onRht 10 be, and will be
executed II not repealed,
This accumulation, both Of silver and gold, can
be made by arrestlng from expectation our own
production Of these metals, This ls more than
sufficient 10 supply our wants for this purpose,
and, fortunately, we have plenty of other pro-
ductiOns-Corn cotton, wheat and fabrics, the fruit
of our industry, for export, This county, is the
The balance OF foreign trade Is IN our favor. Dur
ing the last fiscal year Our-expOrts exceeded our
imports in gold value the sum of Sl66,665 1856, and
this balance is steadily Increasing.
This year Providence has blessed us with an
enormous crop OF almost every production Of the
farm or plantation, and the foreign demand is
our great competitor in supplying Europe with
bread, and she now will consume her own pro-
ducts. We have now reached the com basis IN the
production OF commodities for the foreign market.
OUR EXPECTATION or HOME FABRICS
Has increased and is increasing, and we are now
with Manchester aud Birmingham IN
the sale Of products that have made those cities
famous throughout the world.
Our manufactures Of cotton, iron and wool now
rival In foreign markets the Oldest countries OF
Europe.
We have, during tho five months of President
Hayes, made an actual accumulation OF currency
and OF gold and silver coin and bullion OF S44,34O.
832. From the LIST of May 10 this tlmo we have
added to our coin reserve 500. 00O. COO by the sale of
bonds, without disturbing the money market, and
with gold steadily on the decline. We have re-
duced the public debt since the first Of March the
sum of 500, AL 1914. We have conducted the vast
operations OF our leans, already referred to, with
- ...-N, Nha aA,,an 70 twn1O M mi ufV N
shipment in gold. All the fears expressed SO often
in the papers at these movements have been prov
en- TO be groundless.
We are now within five degrees Of the specie
standard. We have still seventeen months before
us in which to complete the task. The same prog
ress that has been made since the first OF March,
continued twelve months longer, will certainly
bring us to the specie standard. ! feel confident
in saying TO you this day that, If undisturbed,
with or without a change OF the law, every dollar
OF United States notes Will, before the time fixed
for resumption, buy as much as an equal amount
in either gold or silver.
CONSTRUCTION OF THE RESUMPTION ACT
Has often been pressed upon the Department that,
II correct, would make 1t still more easy TO carry
IL into execution. II Is insisted that the Secretary
has the power, in preparing for resumption, TO
sell bonds for coin, and then to sell the coin for
United States notes, to be boarded In preparation
for resumption. The department has not acted
upon any such construction, but has sold gold only
10 the current course OF business, or for the actual
redemption OF notes Bupplanted by National Tank
notes. II this power Is exercised, It should only
be IN pursuance of the plain viii OF Congress, and,
in the execution OF 50 delicate q duty, no power
should be used except such as Is clearly given,
The act of April, 1876, for the redemption OF frac.
tional currency, provides that silver coin maj be
issued in exobange for United States notes, and
such notes shall be kept as a special fund for the
Tedemption OF fractional currency. This fund and
the ordinary currency balance In the Treasury is
the only paper money OF It's own The coin and
legnl-teuders deposited in tho Treasury are the
property OF private individuals, over which the