American citizen. [volume] (Canton, Miss.) 1864-1890, 1878-12-14
OUR NATIONAL FINANCES
Abstract of Secretary Sherman's Annual
Report.


Report.
After giving q detailed statement of the
fiscal operations Of the Government during
the past year, and estimates for the coming
year, Secretary Sherman says:
RESUMPTION OF SPECIE PAYMENTS.
The important duty imposed on this De,
partment by the Resumption act, approves
during the past year. The plain purpose OF
the act is to secure to all interests ana all
Glasses the benefits of Il sound currency, re-
deemable in coin, with the least po sible dis-
turbance of existing rights anu contracts
Three of its provisions nave been sups '1a,aI
substitute II OF fractional coin Tor 1ractl9nal
currency, by the free coinage OF gold, ana by
free banking. There remains only the com
pletion of preparations for resumption i'll
coin ON the LIST day of J;hsIary, 1879, and its
maintenance thereafter upon the basis OF ex-
At the date of my annual report to Con
gress i'll December, 1871, 1t was deemed nee
cs~IrV rs a preparation for resumption to &C
cumuiate III the Treasury coin reserve OF az
least 40 per cent of the amount OF culteu
States notes outstanding. At that time IL was
anticipated that under the provisions OF the
Resumption act the volume OF United states
notes would be reduced to s. 90 o,OOO by the
LIST day OF January, 1873, or soon thereafter,
and that Il reserve in coin OF SI2O,OUo,ooo wnuiu
then be sufficient. Congress, however, III
view of the strong popular feelihS agiulist
the contraction of the currency, by the act
approved May 81, 1877, forbade the retlreihe mem
of any United States notes after that ditte'
leaving the amount in circulation @'iib,ocl ,oio.
Upon the principle OF safety, upon winch me
Department was acting, that 40 per cent. Oh
coin " as the smallest reserve upon which re
sumption could prudently be commehceu, IL
became necessary to increase tne com re-
serve to SiiS out 200.
At the close OF the year 1877 this coin re-
serve, in excess of coin liabilities, announces
to 8 :. Ol6 O5O.g6, of which Sl5GUU,ouO were Oh
tanned by the sale of Al per cent. ana 80
0UU 0 0 by the sale of 4 per cent. BONDS, the
ly, on the 18th day Of April, ISIS, the Score
tary entered into contract with certain
bankers in New York and London-the par
ties to the previous contract of June >, Iotf,
already communicated to ConSl eSs-lof the
sale OF S5oG00.oJo AZ per cent bonds Tor re.
sumption purposes The bonds were soiu AT
a premium ot413 per cent. and accrued inter
est. les commission OF one halt OF l per
cent Inc contract mas p zee dna haYe
DoId con- The S55t00o) coin paid on
the Jfaiifax nwaTd nave been replaced
by the sale of that amount OF per cent
bonds sold for resumption purposes, making
purposes 81, 5tOi 90. of which S65,t 90 900 were
AZ per cent bonds, and $50, tO0,Ooo per cent
bonds. To this has been added the surplus
revenue from time to time. The amount OF
coin held in the Treasury on the 20 day OF
Nov cmbcr last, in excess OF com Sui1clent TO
pay ali accrued coin liabilities, was 49,
no and cons titutes the coin reserve prepar-
ed tor resumption purposes. This sum Will
b, Administered sone,y nat on the lst of Janu-
AIRY next by reason OF the large amount of IN
terest accruing ON that day i'll excess OF the
coin revenue received meanwhile
In anticipation of resumption, and in view
of the fact that the redemption OF nited
states Is mandatory only at the ONCE OF the
Assistant Treasurer in the City OF New YORK.
IL was deemed important TO secure the GO
operation of the associated banks OF the city
in the ready collection of drafts on those
banks and i'll the payment OF Treasury drafts
held by them. \ satisfactory arrangement
mas been made by winch all drafts ON the
banks held by the Treasury are to be palu at
the Clearing, house TT the Office OF the Assist
ant Treasurer in United States notes; and,
after the 1T of january, United States notes
arc q u. them Il
greatly lessen the risk and labor OF collec-
tipn- both to the lr"iS'irN ''''f hf hHrk~
Every step in these preparations tor re-
SUMPTION has been accompanied with IN
creased business and confidence The acc ~
mutation OF coin, instead OF .diis re.
cu.,ed its premium in the market Inc 0e-
pressing and rninous losses that followed the
the resumption act passed; but every meas /;
ure taken In the execution or enforcement VI
this act has tended to tighten these losses
and to reduce the premium on coin, SO that
now it is merely nominal The present con
dition of our trade, inaustry anu nr a,nIe re
serves, and the general confluence inspireu
in our financial condition seem to JUSTIFY tne
opinfon that we are prepared to commence
and maintain resumption from and alter the
Ist day of January, A. ID. 1873.
The means and manner of doing this are
left largely to the discretion of the Secretary,
but from the nature OF the duty imposed, he
must restore coin and bulilon, Wheh Wltn-
drawn in the process of redemption, either
by the sale of bonds, or the use OF the surplus
revenue, or of the notes redeemed from time
The power to sell any of the bonds describ-
ed in the Refunding act continues AFTER rs
well as before redemption. Though 1t may
not be often used, it is essential to enable
this Department. to meet emergencies: BY lts
exercise it is anticipated that the Treasury
at any time can readily obtain coin 10 rem
force the reserve already accumulated.
United states notes must, however, be the
chief means under existing law with when
the department must restore coin and bullion
when withdrawn in process oil reuelnPtloIn:
The notes, when redeemed llusI nec 80 ny
accumulate in the Treasury until thelr supe-
rior use and convenience Tor circulation eha-
bles the department to exchange them at par
for coin or bulliOn.......
The current receipts from revenue are sui
ficient to meet the current expenditures. a.
well as the accruing interest on the public
Teht Authority is Conferred by the Refund
ing act to redeem o. percent ponds as tney
become redeemable, by the proceeds OF tne
sale of bonds bearing lower rate OF inter
est The United States notes redeemed un
der the Resumption act are, therefore, the
principal means provided for the purchase
OF bullion or coin with which to maintain re-
suuption but should only be paid out when
they can be used to replace an equal aiaoun'
nj coin vii hdrawn from the resumption iunu.
They may, it is true, be used Tor current pur,
poses like other money, but when SO useo
their place is filled by money received from
taxes or other sources of revenue.
The provision in the law for redemption in
New York WAS believed to be practical re
demption in all parts of the United States.
Actual redemption was confined TO sihsi e
one coin reserve and where the coin could DC
easily accumulated and kep
With this view of the Resumption act, the
Secretary will feel it to be his duty, unless
Congress otherwise provides, to direct thai
aftef the LIST day of January next, and while
Treasury they be received the same as coiI
by the officers of this Department IN all pay
ments in all parts OF the United states;
If any furi her provision of law Is deemed
necessary by Congress to authorize the re
ceipt of United States notes for customs dues
or Tor bonds, the secretary respectfully sup
Inits that this authority should continue only
while the notes are redeemed in coin. How
ever desirable continuous RESUMPTION may
| he. and however confident we may feel in its
| maintenance, yet the experience OF many ma
lions has proven that it may be Impossible
| in periods of great emergency. In SucI
events the public faith demands that the Gus
| tom duties shall be collected in coin and pait
| to the public creditors, and this pledge
should never be violated or our ability te
| perform it endangered....
| the only coin which by law was legal tender
| in payment of all debts. The act contem
plated RESUMPTION in gold COIN oniy No save i've
| fully issued. The only silver coin provided
was fractional coin. which was a legal tende
made a very important change on our coin
| age system. The silver dollar provided TO-
| was made legal tender tor al debts, pnDn'
| ly stipulated in the contract. The amount Q
/ this coin issued will more properly be state
| hereafter, but its effect upon the problem {
| resumption should be here considered.
The law itself clearly shows that the silve
dollar was not to supersede the gold dollar
nor did Congress propose to adopt the sfngi
standard OF silver, but only to create bi
metallic standard of silver and gold, OF equs
value and equal purchasing power. Congress,
therefore limited the amount of silver do
lars to be coined to not less than two million
nor more than four millions per month, blu
did not limit the aggregate amount nor I'll
period of time during which this coinag
should continue. The market value OF tn
silver in the dollar, at the date OF the pas
sage of the act, was 98k cents in gold coll
Now 1t is about Sc cents in gold coin. ii
was intended by Congress to adopt the sflve
instead of the gold standard, the amount pre-