The true northerner. [volume] (Paw Paw, Mich.) 1855-1920, 1878-12-06
THE FINANCES.

ANNL,AL REPORT or SECRETARY SHERlHdN.
The annual report of the Secretary of the
Treasury upon the state of the finances of the
country is an unusually lengthy document
Upon the subject of specie resumption the Sec
Rotary says:
The important duty imposed on this department
by the Resumption act, approved Jan. II. 1915, has
been steadily pursued during the past year. The
plain purpose of the act is TO to all interests
and all classes the benefits of a sound currency.
deemable in coin. with the least possible disturb
of existing rights and contracts Three of its
provisions have been substantially carried into
ecuton by the gradual substitution of fractional
coin for fractional currency 10y the free coinage of
gold aud by tree banking. There remains only the
completion of preparations for resumption in coin
the LIST day of January. 1873 and its maintenance
thereafter upon the basis OF existing law
At the date OF my annual report to Congress in
December, 1871, it was deemed necessary, as a
preparation for resumption, 10 accumulate III the
treasury coin reserve of at least 40 per cent Of
United States notes outstanding. At that time il
was anticipated that. under the provisions oi the
Resumption act. the volume of United States notes
would be reduced 10 SaOOCUOc00 by the 1st ol Jan
nary lc19 or soon thereafter. and that in
coin of Sl?0.0OU0U0 would then be sufficient. Con
gress however. IN view OF the strong popular feel
ing against contraction OF the currency. 10y the
act approved May u. 1875. forbade the retirement
OF any United States notes after that date leaving
the amount in circulation S;iiGG-1.U lG. Upon the
principle of safety upon which tine department was
acting. that ~ per cent Of coin was the smallest
reserve upon winch resumption could lrudently Toe
commenced it became necessary to Increase the
coin reserve TO S13S. 100000.
At the close of the year ISL this coin reserve. in
excess of coin liabilities, amounted 10 St3 1G.O50 96
Of which Sl5.uUU.ctO We're obtained 10y the sale OF
40 per cent. and S2j.uO0.l0O by the sale of per
cent. bonds. the residue being surplus revenue
Subsequently. on the 18th day OF April. 1873 the
Secretary entered into a contract with certain bank
ers in New York and London-thc parties 10 the
previous contract of June 9. 1S11. already commu-
nicaed to COMPRESSION the sale of $50 Doc 600 40
hon tNr H..
bonds were sold at a premium Of II per cent and
accrued interest. less a commission of u of / per
cent. The contract has been fulfilled. and the net
proceeds $50 800 0C0 have been paid into the treas
ury in gold. The S5,5OO.00O coin paid on the Hall
fax award have been replaced by the sale of that
amount of per cent. bonds sold for resumption
purposes. making the aggregate amount of bonds
sold for these purposes S!55O 600 of which S65.-
C0n.rOU 40 per cent. bonds. and $50 5C0 900
FER cent bonds. To this has been added the sur
plus revenue from time to time. The amount of
coin held in the treasury on the 23d
day OF November last, in excess of
iabilites was s14 SIS 100. and constitutes o the
coin reserve prepared for resumption purposes.
This sum will be diminished somewhat on the lst
Of January next by reason of the large amount OF
interest accring on that day in excess of the coin
revenue received meanwhile.
In anticipation of resumption and in view of the
fact that the redemption Of United states notes is
mandatory only at the Office OF the Assistant Treas
urer in the city OF New York. u deemed impor-
tant 10 secure the cooperation of the associated
banks OF tldt CITY III bDlf'llpu VI
on those banks and In the payment Of treasury
drafts held by them. satisfactory arrangement
has been made by which all drafts on the banks
held 10y the treasury 70 be paid az the Clearing
House. and all drafts the treasury held by them
are to be paid 20 the Clearing House at the Office of
the Assistant Treasurer Ia United States notes and,
after the LIST Of January United States notes are to
bc received by them coin. THIS Will greatly
lessen the risk and labor of collections both to the
treasury and the banks.
Every step in these preparations for resumption
has been accompanied with increased business and
confidence. The accumulation OF COIN instead of
Increasing its price. as was feared by many, has
steadily reduced its premium I'm the market. The
depressing and ruinous losses that followed the
panic OF 1913 had diminished in 1915. when the
Resumption act passed; but every measure taken
IA the execution or enforcement of this act has
tended 90 tighten these losses and TO reduce the pre-
minm ON coin. so that now IL is merely nominal
Tho present condition of our trade. industry and
commerce. hereafter more fully stated. our ample
reserves and the general confidence inspired in our
financial condition. to justify the opinion that
We are prepared 60 commence and maintain re
sumption from and after the first day Of January
A, ~. lt'.
Tho means and manner Of doing this are left
largely ~ the discretion OF the Secretary but, from
the nature Of the duty imposed he must restore
coin and bullion. when Withdrawn IN the process OF
rnirmptiop either by the sale of bonds or the us,
af tho surplus revenue. or of the notes redeemed
from time 10 time.