Ottumwa weekly courier. (Ottumwa, Wapello County, Iowa) 1872-1899, 1877-08-22

that purpose nc is authorized to use
all the surplus revenue, and to sell
bonds Of the United States bearing
four, four and onc-half, and FIVE per
cent. interest at par in coin. 1t is this
law, called the Resumption Act, now
SO much discussed in the papers. that
imposes upon the Office I hold, most
difficult and important duties, and
without replying to any attacks made
upon me, am anxious to convey to
you personally what 1 have done and
must do in obedience to the provis-
ions of this act. It is said that the
law is defective; but, If the great OBJ
ject and policy of the law IL right,
the machinery of the law could easily
be changed by Congress, That re-
sumption can be secured and ought
to be secured under this law, it will
be my purpose to show you, and I
shall not hesitate to point out such
defects in tho law as have occurred to
me in its execution.
THE MODES OF RESUMPTION.
There are two modes of resump.
ton, either to diminish the amount
of notes to be redeemed, which is COM
monty called q contraction of the cur
rency, or by the accumulation of coin
in the Treasury, to enable the Secre-
tary to maintain resumption. The
one practical defect in the law is, that
the Secretary is not at liberty to sell
bonds of the United States for Unit
ed States notes, but must sell them
for coin. As coin is not in circula.
ton among the people, he is practice
ally prohibited from selling bonds to
the people, except by an evasion of
the law, or through private parties.
Bonds are in demand and can readily
be sold at par in coin, and still easier
at par, or at premium in United
States notes. The process of selling
for United States notes need not 70
far before the mere fact that they arc
receivable for bonds would bring
them up to par in coin, and that is
specie payments.
But the reason of the refusal of
Congress to grant this authority, Oft
en- asked of it, was that it would con-
tract the currency, and this fear OF
contraction has thus far prevented
Congress from granting the easiest,
plainest and surest mode of resump-
ton. To avoid contraction it provid-
ed that national bank notes may be
issued without limit as to amount,
and that, when issued, United States
notes might be retired to the extent
of four-fifths of the bank notes is
sued. This was the only provision
for rcdeeming United States notes
that Congress made or would make,
and this, it was supposed, would re-
duce the United States notes to $780,
O0O, 900 before Jan. l, 1879. The &C
tual experiment only proves the fol-
ly of the cry we had for more money,
more money.
HERE WAS FREE BANKING,
q free and almost unlimited right to
everybody to issue more money, but
unluckily for visionary theorists, il
was money that had to be secured
not wildcat money, but money thai
people could sleep upon without
fear of breaking. The result was
that under free banking the issue OF
circulation has been far less than was
expected, and, therefore, the reduc.
|
Still there was some reduction.
| Greenbacks have been retired un.
der the act of Jan. 1875, to this time
to the amount of $22,9O5, 700, and
nearly 100000 Of circulation were
issued to national banks.
Since the first of March last the re.
duction of United States notes has
been $5,l45. 264, and this reduction
was preceded by new circulation is
sued to banks, amounting to nearly
SO, 100000.
I 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 different
law, and from the very necessity o.
free banking, are at liberty to retire
their currency as well as to increase
it, and this has been done by then
since the lst Of January, 1875. to the
amount of $36,624,G12. But this is 6
reduction effected by each bank
guided by its own interests, and the
circulation it can safely and prudent
ly maintain.
There are now deposited with the
Treasury by private corporations
banks, and individuals, So, Ito, 600 OF
United States notes. OF this there
were deposited by the national banks
at their last statement, made june %
IA, 45O, 600, and they have in the casf
reserve held by them $42 SOC, 600 NOR.
than the amount required by law
clearly showing that there is no wan
of currency when demanded for the
requirements of business.
Since Jan. l, 1877, the United States
has issued $34, $4,000 of silver coin
and has redeemed with that $21 1880.
600 fractional currency, now almost
superseded by silver coin, and also
holds $S,l6O,S5S of United States
notes for the redemption of fractional
currency still outstanding. In this
there was no contraction, but a sub.
stitution of coin for fractional cur
rency.
1t was an error to make the retire
ment of United States notes depend
upon the issue of bank notes. The
two had no relation to each other, but
the retirement of United States notes
should depend entirely upon the
amount necessary to be withdrawn
to 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 in.
terest that would in ordinary times
be maintained at par in gold. To
this the objection is made that We
convert non-interest 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
to force into circulation as money its
note, upon which it pays no interest
Why ought not anyone who issues a
compromise to pay on demand be
made to pay it when demanded or
pay interest thereafter? What right
has he in law or justice, to insist up
on maintaining in circulation his note
which he refuses to pay according to
his promise, and which he refuses to
receive in payment ola note bearing
interest A certain amount of Unit
ed States notes can be, and ought to
be maintained at par in coin, with the
aid of a moderate coin reserve held
in the Treasury, and to the extent
that this can be done they form the
best possible paper, a debt Of the peo-
pie 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 dam
gerous exercise of power, Injurious
to all classes, and should not continue
q single day beyond the necessities
that gave it birth.
But, if Congress should see proper
to confine the process of resumption
to the present law, we have still
THE SECOND MODE.
of resuming-by accumulating coin
gradually, SO that when the time fix
ed for resumption arrives, the Trea-
sury may be able to redeem such
notes as are presented. In this res
pect the resumption act is as full and
liberal as human language can frame
it The Secretary is authorized ia