The daily gazette., 1877-11-14
The Resumption Act.

BULLION IN ENGLAND AND FRANCE.
From the Neto York Herald. --oi
The Bank of England and the minor
banks of Great Britain suspended specie
payments in 1907, and remained in sus-
pension till lS21-a period substantially
Of twenty-four years. In 1919 Parlia-
ment passed an act compelling resump-
tion before June, 1928, at that time the
whole note circulation being $3.50, ,000,-
600. At the date of the resumption
(Which, owing to the powerful and Wig
orous measures of the Bank of, England,
took place in 1920 it had been reduced
to $129, 200, ,000-a contraction, substan-
TALLY, of fifty per cent. The last exam
pie is that of France. The Bank of
France, under the pressure of war, sus-
pended in 1870. when Its circulation was
| $3.50, ,000, GOO. A large expansion of pa
per notes promptly took place; until at
one time, in 1873, they aggregated $614,-
100000. When the war with Germany
and the Commune had come to an end
and the indemnity had been provided fol-
the bank began to set its house in order
preparatory to resumption, which it is
under legal obligation to accomplish
by January l, 1878. Its emissions are
at this time slightly under $500, ,000, ,O00
a contraction of about twenty per cent ;
but until they are reduced to their natu-
raj limits, which / venture to fix at $780,
000,060, the bank cannot resume, not
withstanding the presence in her vaults
of $3.50, 100000 of the precious metals
The contraction to be wrought by tht
Bank of France is, then, fifty per cent.
We must not be deceived by superfic
| lal appearances as many are. II is wide
~ supposed that the low premiums or
gold indicates that we are upon the verg,
of resumption and that, in the Language
OF Mr.. John Sherman. at Mansfield, W,
are but three or five degrees removed
from its final attainment. This is ,
plausible, but mischevious and most
misleading, fallacy. The proof is here
In the year 1918, 1919 and 1890, while th'
American banks were contracting thei
note issues in order to attain to a stat
of actual convertible, their notes were
during the whole time, nominally a
least, convertible; and there was no pre-
MUM en- coin, yet contraction OF hf
ty-four per cent took place. When tn
Bank Of England began its work of re
sumption in 1919, the premium on gold wa
but tive per cent. yet contraction OF NIT
per cent. of the whole issues of Englan
was necessary before convertibilty wa
finally effected The highest premium +
which gold and silver attained during tn
resumption period between 1888 and 1874
IN America was seventeen per cent, and ye
q contraction OF sixty three per cent. WA
necessary to a restoration OF the speci
standard. During the suspension i nth
latter months OF 1857 the premium on gol
and silver was merely nominal-lt did nc
exceed one per cent-and yet the banks COL
ltTacted their Circulation nearly thirty pt
cent before they were able resume. Th
premium ON French bank notes since th
) suspension in 1870 at no time reached thrs
) per cent, but a contraction OF twenty-on
per cent has already been effected but th
bunk has not resumed, and a few month
g will tell whether the Bank of France ca
= or cannot do 80 without producing mo-
= serious and dangerous pressure upon I'll
t French people
: 1 assume, from these examples, thi
until the paper notes now in circulation al
reduced to $3.50, 100000 sound resumptio
in these United States is utterly out OF II
question. But if it be true that contra'
Lion of more than $3.50 900 900 is still to
!, effected IS il not clear that Mr.. john She
man has on hand bigger operation thf
can be accomplished 10 seventeen monti
from the l7Gh OF August last =? No dou
Mr.. John Sherman Is giant, but to bo
e hole in the ear or put ring in the no
> OF Leviathan q good deal transcsnds l
powers, even though aided by Sqni
,s Woodiord. Your obedient servant. ~.
:, j. w. SCHUCKERS.