The Rutland daily globe. [volume] (Rutland, Vt.) 1873-1877, 1877-06-14
The Rntland daily Globe
THURSDAY, JUNE ID, 1877.
THE FINANCIAL OUTLOOK.

The secretary of the treasury is making
specie payments, and it is discovered that
no new legislation is necessary for that pur-
pose, the provisions of the resumption act,
so called, of 1875, being ample and, in
deed, it is stated shat had General Grants
administration executed that act, as it is
now being executed, gold and greenbacks
would now have been of equal value-that
is to say, that the premium on gold would
have been wiped out, and dollar in green
backs would have purchased dollar in
gold-which would be, to all intents and
purposes, resumption of specie payments.
1t is all very well to talk about scarcity
of money-and in a certain sense, money
is very scarce and for political conventions
to resolve in favor of further issue of
paper money, and demand that the currency
shall be made and kept equal to the wants
OF trade; but the fact remains, nevertheless,
that there is more money in the country
than the needs of trade require; and that
we shall never return to healthy financial
condition until the volume of currency is
reduced. The statement of the condition
Of the several national banks show that
most of them have more money than they
know what to do with, and more than they
can profitably use. 1t is difficult for some
to understand why surplus of money
should, in effect, make scarcity or should
enhance prices, but so it is, and 80 the first
necessity is to reduce the volume of the
legal tender currency.
This the secretary of the treasury is &C.
complishing in three ways. One OF these
is the cancellation of legal tender notes to
the amount Of eighty per cent. of new
a,tioua, bank notes issued Tins requires
the cooperation of national banks, and it is
said that one of the New York city banks,
having large circulation, has, within
few weeks, three times delivered up its
circulation and recalled its bonds, and, up
on the next day after such surrender, re-
deposited its bonds, and asked to increase
its circulation, each time necessitatng the
cancellation of eighty per cent. of the
amount in legal tender notes. Nine hun
dred thousand dollars of national bank
notes we're each time issued, involving, in
all, the destruction of over two millions of
dollars of legal tenders. This was the
operation of single bank, and it is under
stood that other banks have Joined in the
same effort to retire legal tender notes.
fun 20 81
greenbacks purchased with gold, and the
using of legal tenders instead of interest
bearing securities for the purposes of the
sinking fund.
In connection with the resumption of
specie payment, by contracting the curren-
cy, Is the new arrangement made with
the Syndicate" which we reproduce from
Mondays associated press dispatch, as fol-
lows:
"a contract has been entered into and
ngned by the secretary of the treasury and
Messrs. Rothschil 1, j. S. Morgan s. Co.,
Seigman Brothers, and Morton, Rose &
Co., of London, England, and Messrs. Bel
mont & Co., Drexel, Morgan q Co., j. g.
W. Seligman & Co., and Morton, Bliss g.
Co., and the first national bank of the city
OF New York, for the sale of the 4 per cent.
thirty year consols at par in coin, of which
$25 100000 are subscribed for now, to be
paid for in July and August, So, 100000 to
be fol resumption purposes and $50, 000,-
900 for the redemption of the per cent,
bonds, and the sales are to be continued as
rapidly as possible. The contract is for
six months, and is similar in its general
terms to the former contract, but has this
important provision that for thirty days
after full notice the loan shall be open TO
popular subscription in the principal cities
Of the United States at par in coin, with the
right to pay for the bonds within ninety
days after subscription upon delivery.
Upon notice given some days ago the
secretary of the treasury has withdrawn
from the market 800 100000 OF the Al
per cent. bonds, and the former syndicate
hsve subscribed under the old contracts for
$26, 900 900 In a per cent. bonds, being In
all q sale of $500, 900 900; of the amount
of that loan, out of the $500, 00O. 900, So
000, 900 Is to be applied during June for
resumption purposes, $4,000, 900 during
July for the same purpose, and SIS 600, 600
70 be applied to the redemption of per
cent. bonds. These agreements close out
the AZ per cent. loan, and place upon the
market the per cent loan, with q firm
subscription of SEQ, 900, OOO."
This agreement tends to show that the
secretary OF the treasury is determined tc
use five thousand dollars a month of thu
proceeds of the bonds for resumption pur
poses, and this with The retiring of lega
tenders by the Issuing of national bank cir
culation will soon reduce greent acks to tn,
legal limit, and at the same time, accumu
late fund OF specie sufficient to assur,
resumption at least by the frat of January
1879, II not before.
This agreement indicates another thing
that we have seen the last of government
bonds bearing even so high rate of inter