The Rock Island Argus. (Rock Island, Ill.) 1877-1885, 1877-08-20
Monday. August 20. 1877.
SECRETARY SHERMAN AT HOME
He foreshadOws the Financial Policy
of the Administration.

national finances, has gone home to Ohio
to help the Republicans carry the state.
On the evening of the 18th he made the
opening speech of the campaign, and after
telling what great reforms the administ-a-
ton had begun, he came to the subject of
finances and spoke as follows:
I speak only to those who are willing to
assume, as an axiom on this subject, that |
gold and silver, or coined money, have been
proven by all human experience to be the
best possible standards of value, aud that |
paper money is simply promise to pay |
such coined money, and should be made |
and kept equal to coined money by being
convertible on demand.
Now, the question is as to the time and
mode By which this may be brought about,
aud on this subject no man should be
dogmatic or stand without yielding upon a
plan Of his OVID, but should be willing TO
give aud take, securing the best expedient
that public opinion will allow to be adopted.
The purpose and obligation to bring our
paper money to the standard of coin have
been over and oyer again announced by
acts of congress and by the platforms Of
the great political parties of the country.
IF RESOLUTIONS AND PROMISES
Would bring about specie payments, we
would have been there long ago; but the
diversity of opinion as to the mode now
twelve years after the close of the war
still leaves our paper money at a discount
of five per cent. Until this is removed
there will be no new enterprises involving
great sums, no active industries, but money
will lie idle and watch and wait the changes
that may be made before we reach the
specie standard.
In 1869 congress pledged the public
faith that the United States would pay
gold or silysr dollars for United States
notes. Again, in January, 1875, after
more than years debate, congress de-
clared that by the LIST Of January, 1879,
the United States would pay its notes in
coin.
The secretary Of the treasury is ex-
pTessly required to prepare for. and main
tain, the redemption Of all United States
notes presented at the treasury on and
after that date, and for that purpose he is
authorized to use all the surplus revenue,
and to sell bonds of the United States
bearing four four and oue-half anG five
per cent. interest at par in coin. 1t is this
law, called the resumption act, now so
much discussed in the papers, that i'm
poses upon the Office | hold most difficult
and important duties, and without replying
to any attacks made upon me- am anxious
to convey TO you personally, what have
done and must do in obedience to the pro-
visions of this act. 1t is said the law is
defective, but, ii 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 and ought
to be secured under this law, it will be my
purpose to show you, and l shall not hest
tate to point out such defects in the law
as have occurred to me in the 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, or by the &C
emulation of coin in the treasury to enable
the secretary TO maintain resumption.
The one practical detect in the law is, thai
the secretary is not at liberty to sell boud:
OF the United States for United States
notes. but must sell them for coin. A.
coin is not in circulation among the people
he is practically prohibited from sellinI
bonds to the people, except by an evasion
of the law, or through private parties
Bonds are in demand and can readily b.
sold at par 10 coin and still easier at par
OF at a premium in United States notes
The process of selling for United State
notes need not go far before the mere fac
that they are receivable for bonds wOult
bring them up TO par in coin, and that i
specie payments,
But the reason of the refusal of congress
TO grant this authority often asked OF it
was that il would contract the currency
and this fear of contraction has thus ia
prevented congress from granting tn
easiest plaiuest and surest mode of re
sumption. To avoid contraction, it pro
vided that national bank notes may be is
sued without limit as to amount, and that
when issued, United States notes might b
retired to the extent of four-6fths of tn
bank notes issued. This was the only pre-
vision for rsdeemiDg United States note
that congress made or would make, an
this. il was supposed, would reduce tn
United States notes to 100000, 900 befor
January ], 1879. The actual experiment
only proves the folly of the cry we bad 70
more money, more money.
HERE WAS FREE BANKING.
A free and almost unlimited right to every
body TO issue more money, but unuckil
for visionary theorists, it was money tina
had to be secured, not wild cat money, bu
money that people could sleep upon with
out fear of breaking. The result was tha
under free banking the issue of circulatio
has been far less than was expected, an
therefore, the reduction of United State
notes was less. Still there was some re
ductiOn.
Greenbacks have been retired under tn
act OF anuary, 1875, to this time to. tn
amount of 500, 900, 100, and near $29, 600
900 of circulation were issued to the IA
tional banks.
Since the 1st of March last the reductio
Of United States notes has been So, l45, 264
and this reduction was preceded by net
circulation issued to banks. amounting I
near $6,500,000.
/ do not say that this is the only re
ducton Of the currency that has happened
but it is the only reduction that was mad
by the United States. The national banks
under a different law and from the yer
necessity OF free banking, are at liberty I
retire their currency as well as to increas
it, and this has been done by them sine
the lst Of January. 1875, to the amount Q
$36,624,6l2. But this is affected by eac
bank, guided by its own interest, and tn
circulation it can safely and prudent
maintain.
There are now deposited with tn
treasury by private corporations, bank
aud the individuals, $57. 10000 of Unitet
States notes. Ofthis there we're deposite,
by the national banks at their last state
ment, made June %, $44, 100000, and the,
have In the cash reserve held bythem, $42,
100000 more than the amount required b,
law, clearly showing that there is no wan