The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1878-10-16

| "Public Credit Act" the last clause OF
which is in these words And the United
States also solemnly pledges its faith to
make provision at the earliest practical
moment for the redemption of the United
States notes in COIN"
H. In January, 1875, Congress fulfilled
this solemn pledge" by enacting that ION
and after the LIST of Jan ary, 1879. the Secre-
tary of the Treasury shall redeem in coin
the United States legal tender notes then
outstanding !" and to enable him to do this
it deliberately gave him authority not only
to use any surplus revenues, but Ito issue,
sell and dispose Of at not less than par in
coin either of the descriptions Of bonds Of
the United States" previously authorized
by law for other purposes, being either
five, four and a half or four per cents, Ito
the extent necessary to carry this act into
full effect"
III. At the last session Congress author
lied the coinage Of silver dollars at the rate
Of not less than two nor more than four
millions per month, and made them full
legal tender; and it also forbade the cancel
lation or retirement of United States notes,
and ordered that they ''be reissued. paid
out again and kept in circulation"
Nv. When, under the law, the Treasury
there will be in circulation three hundred
and forty-six millions of them, and the
Treasury will contain somewhere about one
hundred and eighty millions of coin, of
which one hundred and sixty millions, in
round figures, will be in gold and the re-
mainder in silver.
v. There will be at the same period about
three hundred and twenty millions Of
national bank notes in circulation, redeem
able at the pleasure Of the holders in claw
full money" which will mean after the LIST
of January next either gold, silver or
greenbacks.
| VI On and after the LIST of January
United States notes will, we suppose, be
received for customs duties, because if
they were refused the holders would only
be put to the trouble of getting them ex-
changed for coin at the Sub Treasury,
which would be useless circumlocution.
VII. The Silver act authorizes the issue
of certificates by the Treasury against silver
dollars in sums of ten dollars and upward.
some, therefore, it will doubtless go back
into the Treasury, and the certificates will
pass current as an additional kind of legal
tender paper money until the Silver act is
modified or repealed.
VIII. There is no limit Of law to the
amount of national bank currency which
may be issued.
These are the circumstances under which
the Treasury will begin to redeem" United
States notes, which must be presented ut
the Sub-Treasury in this city in sums of
| fifty dollars or more. Fears are sometimes
expressed that the effort at resumption
must break down, and that the attempt will
throw our finances into disorder. We
remark, in the first place, that the law gives
the Secretary unlimited power to procure
coin by the sale of bonds; so long rs he can
sell five per cents at par for gold he can get
gold for redemption of the greenbacks. But
it is objected that as he is required to reissue
the notes he .redeems," and, as when they
are reissued he may be again required to
give coin for them. this process of '.redemp-
tion," SO called, is endless. The law GER
tainly directs that the redeemed" notes
shall be reissued; but 80 long as the reve-
nues balance the expenditures. as the
Secretary has no authority to give away the
notes he will with the best intentions find
it impossible to get them out.
| The national banks now redeem in green
backs. They ought to know that the bur-
den Of resumption must in the end fall
upon them; but SO far they do not
appear to have adopted any fixed
policy. 1t is not probable that green
backs will be presented for redemption
in large quantities, for a time at least, and,
while foreign exchanges are in our favor,
by private holders, but the banks will be
compelled to put themselves on q coin
basis, and their readiest way to do this will
be by collecting grecnbacks, and with
them drawing gold out of the Treasury
They now hold between twenty-five and
thirty millions of gold of their own and
have probably seventy millions of green
backs under the law besides. The holders
of national bank notes. being absolutely Sc
cured under any circumstances, will
not be likely to trouble the banks for coin !;
there can be no panic of bill holders, suoh
as the country was liable to under the old
banking systems. because il national
bank fails the Treasury redeems its notes
in full. But now that it is seen that
resumption is q fixed fact oil prudent
national banks must as rapidly as possible
put themselves on a coin basis. Whenever
they have achieved this the country will
have actually resumed specie payments,
but not until then; and the demand on the
Treasury for coin in exchange for green
backs will come from the national banks in
their efforts to resume.
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