Daily Kennebec journal., 1878-04-08
Resumption.
CONFERENCE OF SECRETARY SHERMAN WITT
THE CURRENCY COMMITTEE.

in regard to the Resumption act. was resumed
Thursday. 1, opened with a comparison between
the ability of the government to resume and
and maintain specie payments and that Of the
Bank of England, the Secretary insisting upon it
tha, the government was equally as good, if not
better than the Bank of England
After this point had been thoroughly exhausted
Mr.. Ewing asked the Secretary where and how he
expected to get the additional millions Of gold
which be required by the first Of January, 1879.
Secretary Sherman-You must see that for me
tostste. too closely what propose to do might pre-
vent me doing what expect to do,and therefore
will answer your question just as far IS think
you will say ought to 20. answer mainly from
the sale Of bonds. Indeed, in the present condi-
| ton of the revenue we cannot expect much help
from the surplus revenue, except 30 far Is that
| revenue may be applied to the payment OF reen-
backs aud TO the redemption OF fractional curren-
cy IN al OF the sinking fund. To that extent
think we rely upon revenue enough TO ret re the
| United States notes redeemed under the Resump
ton act, so that would FAY that we get the
$50 900 900 Of gold addiona by the sale Of bonds
! As to the kind of bonds would sell, and how
would Eel! them, ETC., ought not to say anything
| at prest ut, because they ought 10 allow me,
1 executive officer, in exercise Of my delicate dis
cretion, free power TO act As think night at the
moment, holding me responsible for my action af-
teiwaId. As to what bonds will sell, or where
Ia will :. II them, how will sell them, that
the discretionary power left with the Secretary,
ought not TO decide that now but will decide II
the case arises.
Mr. Ewing--It is now on the foreign sale that
lou are dependingi
Mr.. shermsn-Not at all but on q sale at home.
IL can yet Two thirds Of this years supply OF
gold and silver 1t will amount to good deal more
than $50 600 600, SO do not have TO 20 abroad for
gold. II we can keep our own god and silver
from going abroad 1t /, more than | want.
The Chairmsn-For this $50, 600, 900 additional
| suppose you rely 10 some extent ON the coinage
of silverf
Mr. sherman-To some extent; silver and gold
were considered the same under the law.
| Mr. Ewng-Do you expect to pay out the sill
yer dollar coined by you Tor current expenses, or
only for coin liabilities, OF TO hoard 1t Tor resump-
| tioD
MIR. Sherman-I expect to pay it out now only
| in exchange for gold coin for silver bullion.
| propose to issue all the silver dollars demanded
in exchange for gold coin. Then l propose to
the silver in pay ment for silver bullion, which
can do, at par in gold, without any loss, after the
| first five millions are purchased, for which an
appropriation WAS made in the Silver bill. / then
propose to buy all the rest of the silver bullion
which need under the law with silver coin. In the
current cOnrse of business some of that silver coin
will 70 into circulation, how much do not know.
The more the better for US, but the most of it |
take 1t will be transferred to the Treasurer for ill
yer certificates, and those silver certificates will
come into the Treasury IN payment of duties, and
in that way, practically, the silver will belong 10
| the government again. Until the silver is so abpn-
dant that it becomes an acknowledged basis of
coin transactions. we cannot pay out that silver
for ordinay Apenses of the government.
MIR. Ewing inquired whether any law officer of
the government or Secretary OF the Treasury had
given written opinion that the sinking fund was
to be composed merely of the surplus revenue, in
construction OF that section OF the revised statutes
which says the income from customs shall be ap-
piled first to the interest on the public debt and
second to the sinking fund
Mr.. Shermau-l can only say that the estab-
lished custom well Ms the theory of our govern
ment would seem to require that any sinking fund
provided for the extIngulshment OF the debt
not be applied until after ali demands up.
on our revenues are paid otherwise the Treasury
would be bankrupt whenever there was q tempor-
sry falling OF iD the revenue. Fur instance, the
law ef 1862, providing for the sinking fund, sets
aside the receipts from customs to pay one per
cent. of the debr, although that was the law that
the sinking fund was Lever opened nor could il be
during the war. The pledge was never carried
out until the old floating debt WAS mainly refund
ed.
Mr.. Ewing-Was not the public debt being re-
duced oil that time
Mr.. Sherman-Up to the panic of 1873 it was
being reduced oil the time, and We paid more dur
ing all those years than the law required on what
we call the sinking fund, that is, the redemp-
ton OF the debt.
Mr.. Phillips-From what source did the pay
me ut come
Mr.. Sherman from the surplus revenues, and 8,
it continued until 1873 Then all at once there
was a deficiency of SIC 900 900. This deficiency
in the sinking fund WAS allowed to continue from
year 10 year until now, and presume it will be
allowed TO continue; although, If Congress can
see its way 81 arto levy tax on tea aud coffee to
make good the sinking fund would like it very
much but do not think Congress will do so.
Mr. Ewipg-l guess not.
Mr.. Shermsn-Because do not think the peo-
pie would sustain Congress in it. Any Secretary
of the Treasury who would undertake to refuse
to pay the current expenses OF the government,
and who would at the same time pay the whole
would be overhauled very quickly.
After the exhaustion Of this point, Mr.. Ewing
put the question TO the Secretary: In case of .
drain Of gold from the Treasury, what measures
would you resort TO to check il mean after
resumption.
Mr. Sherman-The Treasury ought to to be so
strong that the thing would check itself. You
can scarcely imagine, in the probabilities Of bss-
ness, that with no outstanding liabilities that
not covered by actual cash on hand, except the
$780, 00O0 900 Of legal tender notes, the drain up
on the government for gold would be so great as
to exhaust the reserve of $l20, 900 600. That
proposition is all based, not upon the fact that
the Sl20 100000 would ipsy $500, 900 900 I've all
II
impossible to gather together United States notes
and to present them in such mass and 10 such
continuous stream. but Il ct the very effort TO do
so would raise the value of United States notes.
Their convenience is so great, and the necessity
for them apparent, that such effort wou Id at
once bring them to par 10 geld. l think q drain
Of five, ten, fifteen or twenty millions would at
once tend to bring up the value OF greenback. un-
til they were At par IN gold, and then there would
be no object al all in bringing them out.
Mr.. Ewing-After resumption the greenbacks
must remain at par in gold as long Is the Treas-
ury maintains resumption.
Mr.. Sherman-Cer,ainly, and while they are at
par in gold they will not be presented TO any con
siderable extent.
Mr.. Ewing Of course if there was an estab-
lished difference Of one per cent, or one half of
one per cent. between gold and greenbscks then
the Treasury would be broken pretty quick.
Mr.. Sherman-Yes, sir; or q Difference of
qua ter Of one per cent. There is doubt Of that
Mr.. Ewing - Therefore, after resumption
greenbacks must necessarily be at par with gold
as long rs the secretary is able to maintain re-
SUMPTION Now | sm supposng . case of draia
of gold from the action OF foreign creditors, or
any other cause. and l want to know to what
means you would resort to check it.
MIR. Sherman-l do not think it would be nec-
essary to resort to any means, but If it is neces-
ssry to devise some means. | would resort to such
as have been adopted in other countres-the tenn
porary suspen sion of specie payment. That is q