The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1878-07-18
secretary sM.rma.,s po,iey.

| reSumptlon
The Secretary believes himself SO well
prepared for resumption that he declined
with thanks the offer of a Syndicate OF
bankers here to take off his hands for gold
the fifty millions OF four and a half per
cents which still remain for resumption
purposes. He has about one hundred and
fifty millions of gold in the Treasury and
about seven millions of silver, and he does
not intend that the Treasury shall resume
until the time fixed by law, which Is
the LIST of January next. In the mean
time, however he wishes to get rid OF
his accommodating silver and will probably
begin to pay it out presently for current ex-
penses, which he has of course right to
do as it is legal tender. We trust he will
do this, for it Is only by actual trial that
the public can be enabled to judge whether
the silver dollar is a coin of sufficient merit
and convenience for it's use. As the coin
age goes on Mt the rate Of somewhat over
three millions mouth he ought to be able
to distribute by payments for current ex-
penses nearly thirty millions of silver be-
fore Congress reassembles--a sum, we fear.
too small to make an impression on the
public mind and pocket, but yet useful as
an experiment.
AS the government revenues balance the
expenditures, when the Treasury comes to
pay out gold it must retain greanbacks.
These he must according to the act passed at
the last session, reissue when he has occasion
to do so; but except to buy gold for resump-
ton purposes he has no means OF reissuing
them. The law commands that he shall
not diminish the amount Of greenbacks be-
yond three hundred and sixty millions.
Congress desired him to keep the whole
amount in circulation, and undoubtedly he
will do this so far as he can. Congress also
wished the silver dollars put in circulation,
and that, too, the Secretary must do SO far
as he can.
What, then, will be the result Of this
| system or lack of system, according to
which he must act? On the 1st of next
January he is obliged to exchange legal
tenders for coin. If he has silver he may
pay that out but his present policy looks
rather to getting all the silver into circula-
ton before then He will therefore redeem
the legal tenders with gold, for which we
imagine there Will be, for a time, at least,
an active demand at the Treasury. Fortu-
nately he will have enough gold coin on
hand to meet the first demand One hum
dred and fifty millions OF gold are not paid
out Of the Treasury in day or week
When he has redeemed ten or twenty mill
ions OF legal tenders the law, which
requires him to keep them in circulation,
will force him, as the only way to do this,
to use them for repurchasing gold. He can
put them out in no other way; but If he can
by their help replenish his stock of gold,
then, of course, his problem is solved and
he really and permanently resumes. SO
long as the public sees that lie can do this
it will not want gold for home use, because
the notes. being receivable for all public
dues, will be more convenient to handle
than coin. We suppose it is because he
expects TO use the greenbacks to acquire
new supplies of gold that Mr.. Sherman re-
fused the offer of the Syndicate to take off
his hands the remaining four and half
per cents-a refusal which, we confess,
!
able to dispose of them hereafter if he
should need to.
| 1t is evident that the success of the Sec
retary's plans depends on the continuance
of a considerable balance of exchange in
our favor. If foreign demand for gold
| should arise, if it should become profitable
| to ship gold, the Treasury would be rapidly
we suppose, that Mr.. Sherman has often
| said that there may have to be temporary
| suspensions of specie payments after re-
sumption begins. II he felt at liberty to
retain in the Treasury the legal tenders
which after January he will redeem in
gold then he would be safe; for so long as
the banks are compelled to redeem either
in coin or legal tender notes they would
have to retain in coin Tor redemption pur-
poses what they could not get in legal ten
der, and precisely as fast MS the Treasury
drew in and retained legal tenders SO fast
the banks must increase; for they must re-
deem their notes either in legal tender or in
coin. Whenever all the legal tenders were
Withdrawn from circulation the banks would
possess their equivalent in gold, and re-
sumption would be fixed fact.
That is to say, actual bona tide resumption
can come about only when the government
has paid off its legal tender or non-interest
bearing debt or holds the gold to do SO.
There were two ways of doing this - one, to
fund them in interest bearing bonds,
which would leave the banks to procure
gold for redeeming their own notes in the
best way they could. This plan, which has
had many advocates because it was simple
and obvious, was nevertheless liable to the
objection that it would embarrass the
banks and probably cause irregularities in
the xnlnma of currency. which il is i'm nor