New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1878-03-22
THE SECRETARY AND RESUMPTION

Secretary Sherman has made one statement
which few of his friends will indOrse. Re-
sumption cannot be maintained, he thinks,
without the reissue of grecnbacks below $780,
600. 900 in amount. Heartily approving much
that he has said in his conversation with the
committee of the Senate, We do not sec that
he is right in this matter.
Undoubtedly it is weR that the Government
should retain the power to reissue legal-tend-
ers, after they have been once redeemed. below
$500, OOO, 900 in amount. Whether the Treas
ury should exercise that right does not seem
clear, and we do not think that MIR. Sherman
or anybody else can speak confidently in the
matter until it has been proved by actual
trial how large a circulation the country can
carry without depreciation. The object ought to
be the restoration of the legal to par
value In gold and its maintenance at that
value, and no one can say beforehand whether
that result can be attained with precisely
$500 200, 900 in circulation, or with much
less. Mr.. Sherman ought to retire notes
enough to place and to keep the remainder
at par. We presume that this is what he in
tends If it becomes necessary to continue
the redemption of legal-tenders until the
amount in use is less than $200,C00,OOO, we
presume that he will take that course,
and so if tho amount necessary to be
retired is smaller or larger If they
are redeemable on demand, legal-tendcrs in
excess of the real needs of the country will not
stay in circulation they will be presented for
| redemption as long as they are below par III
| market value. Undoubtedly, Mr. Sherman
knows that this is necessary incident OF re-
sumption, ana it seems to us q mistake in
| him to lead anybody to q different impression.
| The impression may cause him trouble here
| after, it, as we suspect he may be obliged to
| reduce the amount of notes in use below
| $500, 600, 900 in order to keep them at par.
| It is possible that one important fact is
overlooked by Mr.. Sherman. and by others
who are discussing this question. When the
Government resumes specie payments, the
gold in the country willie Immediately become
available as currency. At present it is mer-
chandise. The difference in value prevents its
use in payments Of debts, in loans, Or in bank
reserves. Though held by the banks largely,
it is held mainly on special deposit. After re-
sumption, however, the gold will become
available for all purposes. The entire amount
of gold in the country will be virtually added
to the circulation. 1t will follow that the
amount of notes needed will not be
as great as it is now. Some expansion
of business may naturally occur, and perhaps
enough to give employment to large part OF
the currency thus added But no thoughtful
person suppOses that the increased requirement
for currency will be as great as the increase
of circulation through the free use of coin.
If we have enough currency in circulation
now, and the better opinion is that we have
much more than enough, reduction i'll the
paper circulation will be necessary, and
that reduction must be sufficient not
merely to cover tie difference between
the present circulation and the real needs OF
the country, but to make room for all the coin
that may then come into actual use. We do
not attempt to mention the sum which can be
kept in circulation without depreciation. Pos
sibly 1t may be greater than is generally sup
posed, for any expansion OF business or adj
vance of prices will involve the need of more
currency. But it is clear that the amount
must be ascertained by actual trial, and can
not be named in advance by the Secretary OF
| by Congress.