The sun., 1878-12-17
On the Eve of Resumption.

On the Eve of Resumption.
Twice within period Of five years, name
L., between 1917 and 1921, the Bank Of Eng
land undertook to resume specie payments.
One attempt resulted in failure while more
complete preparation subsequently insured
success Tho day fixed for the restoration
nf the specie standard in the United States
II now at hand. and i'm view OF the prccc-
dents Just named, it becomes n question of
much interest how far the resources of
the Treasury, as defined In It's latest state
ment and as supplemented by the recent
nction OF the New York and Boston banks,
will prove adequate to the occasion.
Tho total amount Of coin and bullion In
the country at this time IL estimated by the
director of the Mint at more than $685.
o0N,0O0 or this aggregate the Treasury De-
rartncnt now holds. according to n report
submitted to Congress two weeks ago
sllO000,OO0 IN coin. This reserve is equal
to rather more than forty per cent. Of
Tie entire issues Of lcgal-tcndcr notes OBJ
viously this provision would be insufficient
provided all the notes, or a large majority
Of them. were presented for redemption.
Now it SO happens that the proportion of
gold to paper above stated corresponds
bank of England when it undertook its un-
successful scheme OF resumption In 1917.
But the conditions under which the expert
ment will be made on Jan. l, 1879, differ in
several important and, in our judgment,
decisive features.
We do not now refer TO certain resources
on which some stress has been laid, but re-
course to which might possibly be followed
by uutoward consequences. Should the
quantity Of lcgal-tcndcr notes presented
for redemption be unexpectedly large, and
threaten tie complete depletion Of the coin
deposits thus far collected. there i no doubt
taat the Secretary may legally reissue the
redeemed notes in return for fresh acces-
sioms Of gold. But It is plain that his ap-
pcoruncc in tho market for such purpose
would at once reveal to the community the
weakness Of the Treasury. and would gravely
disturb the existing relation between gold
and the currency. II. indeed. 1t did not en-
gender veritahc panic. II Is equally quos-
tonable whether the Department should
under any circumstances avail itself of the
right conferred ON II by Congress 10 redeem
its paper in silver coin at a nominal rate
ranging from ninc 10 fifteen per cent.
above the market price of white metal
Such course on the part of the
Treasury would be at once construed
rs an act OF partial reputation, and gold
would instantly command considerable
premium as compared with legal tenders
This action. moreover would procipitatc a
conflict with the very interest whose co..
operation is Of supreme moment at this
junoiurc We refer Of course to the national
banks, which together hold nearly one-third
Of all the notes in circulation, and which,
therefore have IL in their power to greatly
further the success or to compel the failure
of resumption.
We may take for granted that satisfactory
assurances ON the above heads have been
given 10 the banks, ance the most innuen-
tial Of them have opcnlyplcdged themselves
10 cooperate with the Treasury, Such is
the purport Of the resolutions recently
adopted by the New York Clearing House
Association, comprising forty-ilvc national
and thirteen State banks, and aftcrward
ratified by the Clearing House in Boston.
Henceiorward special exchanges Of gold
checks at the clearing houses are to be
abolished, and gold special accounts are to
be discontinued by notice 10 dealers 10 ter
inmate them On the l-t Of January next. III
many other practical ways the banks have
proved their determination 10 aid ia wipng
ont the distinction which has 50 long eX-
listed between coin and currency, and in all
future disbursements to regard gold as the
mere equivalent of lawful money.
Now what is the welghty significance Of
this attitude on the part Of the banks 1t
means that the thirty per cent. Of legal
tenders held by those institutions, or at
least large proportion Of that amount,
will not be presented for orredemption. In other
word-. the largest creditor of the Treasury
will rest content with it, present securities,
md the business Of resumption will be be-
gun not merely with a reserve of forty per
cent. but with deposits practically amount
ing 10 nearly sixty per cent. Of the notes
liable To be brought in. This is equivalent
10 saying that the restoration Of n specie
standard ought, in the Hight Of English
proccdents, 10 be accomplished without diff
Guilty, and almost without notice, provided
the banks shall proycable, as well as willing,
70 cooperate. For in that case our expert
ment Will bo made with a proportion Of
available coin to possible demands greatly
exceeding that commanded 10y the Bank OF
England in 1877, and more than equal to
that with which the second attempt in 1921
was happily carried out