, 1877-11-19
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THE ROAD TO RESUMPTION,

out the fna1lcial discussion by unnecessary
restrictions which they have imposed upot
themselves. They have followed two lines
Of argument whicl, arc inconsistent will
each other, maintaining at the same time
that the legnl-tender quality Of the silve,
dollar shall not be restored, md that tht
dnte OF the resumption Of specie payments
shall not be postponed. The resumption oi
specie payments In gold alo''o by tho 1at oi
January, 1870, without commercial disaster
Is physical itnpossihility. Ignorant peo'
ple. or people who have not given close at.
tention to tile history Of financial legislation,
may DO EXCUSED for thinking TINT 1t would
DO an easy matter TO wipe out tho small
premium on gold thai exists ut pres.
ent; but wider comprehension ot
tho subject may reasonably bo demanded
OF professed flnanciera. They ought to
know, II they do not, that premium of .
per cent in gold represents much moro than
an imitation Of 3 por cout iu currency. Tho
retirement Of 60 per cent Of tho outstanding
pnper currency would probably bo required
to bring It to q par with gold and hold
It there II no other metal were nsc.l
in tic process Of resumption. Mr..
J. ". SuucHERs, who writes 10 tho Now
York Herald in this connection, calls atten-
ton to the remarkable fact that a con.
traction Of 5t per cent In tho volume
Of currency was required 10 restore spc-
clio payments In 1910 in thia country,
whi1o the contraction in 1887 waa G. per
cont, and in 1867 nearly 10 per cent. In each
instance, tho premium OIL gold was small,
but resumption was effected at tho cost Of
the industrial aud commercial classes and
their losses wora enormous. The Rank
of England was obliged 10 contrnct
its Issues 60 per cent before a resump-
sion Of specie payments could DO procured in
1871. The Bank Of Franco, aftar having re-
tired 20 per cent Of It's circulation, and hav-
ing gathered $3.50, ,000, ,00o coin in its vaults,
md enjoying tho benefit Of silver legal
tender, is still not yet quito rcaly to re-
sumo. 1ts outstanding notes amount to
800, 000, 600, or $2oD, ,000, 600 loss than tho
currency Of tho United states, and Tho
premium on gold thoro Ia not d tenth
part 80 eroas as in this country. Uu-
til its issues arc reduced to about $500, ,O0O,-
600. 1t will be unablo to maintain specie pay-
ments. The active paper notos OF Great
Britain do not exceed s:7o, 00o, 900; those Of
the Gorlnan Empire arc less than 5000, ,D0O,-
600 and the Bank Of France Ind In cfrou1n-
tion only $3.50, o0O, Geo when tho war Of 1870
broke out,
When tho volume Of currency In tho
United 9tatos l.aa been 1gdnoed to the limits
imposed by tho trade OF the country, an
other condition must be fulfilled boforo the
papor can be maintained at par, This con-
dition Ia the presence In tho country of nm
a1nount Of coin equal to tie nominal yaluo OF
tho outstanding paper. It Is mat.or OF
Indifference whero this coin shall bo depos-
itod. It may be in tho Troasury or in tho
banks, OF In the hands Of tho people. 1t
may bo In aotive circulation, OF represented
BY coin certificates. But somowhero In tho
country 1t must be, II apecio payments are to
be maintained without interruption. The
experience Of nll civilized countries Ina es.
this rule Of finance as clearly ~
any law Of nature, In Wow Of It, tho q,,es.
tton the opponents Of resumption in 1870
have to put to tho Secretary Of tho Treasury
Ia this: Whero can gold coin equal to the
nominal value Of the outstanding paper in
the United States DO Obtained? Gold
Is scarce commodity in Europe,
Tho demand for It there has boen stinu.
lated BY tho action Of Germany In demone-
tizing silver. Tho balances In cur favor arc
not settled, aud will not for years 10 settled,
In ryn1f 1,,,ff Il, f1.n 4