The Milan exchange. (Milan, Gibson County, Tenn.) 1874-1978, 1878-12-12
OUR NATIONAL FINANCES .
Abstract OF Secretary sherman's Annu
Reporf.

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, approved
January Il, 1875, has been steadily pursued
during the past year. The plain purpose OF
the act is to secure to all interests and all
Glasses the benefits of a sound currency, re-
deenable in coin, with the least pos sible dis
Three of its provisions have been substan-
TALLY carried into execution by the gradual
substitution Of fractional coin for fractional "a.
free banking. There remains only the com
pletion of preparations for resumption in
coin on the lst DAY of January, 1873, and its
maintenance thereafter upon the basis of ex-
At the date OF my annual report to Con-
gress In December, ls77, it was deemed nee
essary as u preparation for resumption TO ac-
cumniate in the Treasury coin reserve of at
least 40 per cent of the amount of United
States notes outstanding. at that time 1t was
Anticipated that under the provisions of the
lteshmpticn act The volume OF United states
notes would be reduced TO s. 90 0,OO0 by the
lst day of january, 1873; or soon thereafter,
and that reserve in coin OF lsOoOo,O0 wouio
tilen We sufficient. Congress, however, in
view of the strong popular feeling against
the contraction of the currency, by the act
approved May 81, ISIS, forbade the retirement
OF any United States notes after that date,
leaving the amount in circulation S46, 6Sl ,0l6s
Upon the principle of shtetyi upon which Tie
Department was aetinsI that 40 per cent. Of
boin Was tile smallest reserve upon which re-
sumption could prudently be commenced, 1t
became necessary to increase the com re-
serve to sou 100.
At the close OF the year 1877 this coin re-
serve in excess Of coin liabilities, amounted
to s. s DIG, O5O.9B, of which Sl5,O00.000 were OBJ
tained by the sale of AZ per cent. and So
eOOe by the sale of 4 per cent. bonds, the
residue being surplus revenue Subsequent
81, on the 18th day of April. 1875, the Seefe-
tary entered into q contract with certain
bankers in New York and London-the par
ties to the previous contract of June 3, 1871,
already communicated to Congress-for the
sale OF S50,O00,000 ~ per cent bonds Tor re-
sumption purposes. The bonds were sofa at
a premium of4< per cent and accrued inter
est, less a commission of one half of per
cent The contract has been fulfilled, and
the net proceeds, S5O2S 600, nave
been paid into the Treasury in
gold coin. The S5,5C0000 coin paid on
the Halifax award have been replaced
by the sale of that amount of per cent.
honds sold for resumption PURPOSES, making
TIE aggregate amount OF Donds sou loi THESE
purposes SIS 80, 90, of which 500, OO,WO were
AZ per cent bonds, and $4,000 900 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 sd DAY Oh
November last. in excess of coin sufficient to
pay ali accrued coin liabilities, was sl4l,oSS,-
100, and constitutes the coin reserve prepar-
ed for resumption purposes. THIS sqm Wln
he diminished somewhat on the list OF janu-
AIRY next by reason of the large amount OF IN
terest accruing 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 Is tnandatofy only at the office o. the
Assistant Treasurer in the City OF New orki
it was deemed important TO secure the CO.
operation of the associated banks of the city
in the ready collection of drafts on those
banks and in the payment of Treasury drafts
held by them. A satisfactory arrangement
10 gCln all hrnf nc
banks held by the Treasury are to be paid at
the Clearing house at the office of the Assist
ant Treasurer in United States notes. ands
after the LIST of January, United States notes
are to be received by them as coin. This will
greatly lessen the risk and labor OF collee-
lions both to the Treasury and the banks.
Every step in these preparations Tor re-
Sumption has been accompanied with IN
creased business and confluence. The accu.
mutation of coin, instead of increasing lts
price, as was feared by many, has steadLy re-
duced its premium in the market. Inc ue-
pressing and ruinous losses that followed the
panic of 1873 had not diminished in 1872 When
the resumption act passed; but every meas +:
ure taken in the execution or enforcement oI
this Get 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, industry and commerce,
hereafter more fully stated, our ample re,
serves, and the general confidence inspired
in our financial condition seem to justify the
opinion that we are prepared to commence
and maintain resumption from ana after the
LIST day of January, A. ID. 1873.
THE means and manner of doing this are
left largely to tile discretion of the Secretary,
but from the nature of the duty imposed, ne
must restore coin and bullion, when Win
drawn in the process OF redemption, eltnef
by the sale of bonds, or the use of the surplus
revenue, or Of the notes redeemed from time
to time.
ed In the Refunding act continues after as
well as before redemption. Though 1t may
not be often used, it Is essential to enable
this department to meet emergencies. by It's
exercise it is anticipated that the Treasury
at any time can readily obtain coin to rem
force the reserve already accumulated
United States notes must, however; be the
chief means under existing law with Wnlch
the department must restore coin and bullion
when withdrawn in process OF redemption.
The notes, when redeemed, must necessarily
accumulate in the Treasury until their supe-
riur use and convenience for circulation ena-
bles the department to exchange them at par
for coin or bullion.......
The current receipts from revenue are SUI
feient to meet the current expenditures, as
well as the accruing interest on the pubnc
debt. Authority is conferred by the Refund
ing act to redeem percent. bonds as tney
become redeemable, by the proceeds OF the
sale of bonds bearing lower rate OF inter
est The United states notes redeemed I'M
der the Resumption act are, therefore, the
principal means provided for the purchase
of bullion or coin with which to maintain re-
sumption, but should only be pald out when
they can be used to replace an equal amount
OF coin Withdrawn from the resumption fund.
They may it is true, be used for current pur-
poses like other money, but when so used
their place is filed 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 ali parts of the United states
Actual redemption was confined to a single
place from the necessity of maintaining only
one coin reserve and where the coin could be
easily accumulated and kept.
With this view of the Resumption act, the
Secretary will feel it to be his duty. unless
after the lst day of January next, and while
United States notes are redeemed at the
Treasury they be received the same as coin
by the officers of this Department. in all pay
ments in all parts of the United states.
If any furt 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 sub
mits that this authority should CONTINUE only
while the notes are redeemed in coin. HOW
ever desirable continuous resumption may
be- 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 such
events the public faith demands that the GUS
tom duties shall be collected in coin and paid
to the pubic creditors, and this pledge
should never be violated or our ability TO
perform it endangered......
When the Resumption act passed, gold was
the only coin which by law was legal tender
in payment of all debts. The act contem-
plated resumption in gold coin only. No silver
coin of full legal tender could then be law
fully issued. The only silver coin provided
was fractional coin, which was a legal tender
for S. only. The act approved February y, 1915,
made very important change ON our com
age system. The silver dollar provided for
was made legal tender for all debts, public
and private, except where otherwise express
" stipulated in the contract. The amount OF
this coin issued will more properly be stated
hereafter, but its effect upon the problem OF
resumption should be here considered.
The law itself clearly shows that the silver
dollar was not TO supersede the gold dollar;
nor did Congress propose to adopt the single
standard of silver, but only to create BIZ
metallic standard of silver and gold, OF equal
value and equal purchasing power. Congress,
therefore limited the amount OF silver dol
lars to be coined to not less than two millions
nor more than four millions per month, but
did not limit the aggregate amount nor the
period of time during which this coinage
should continue. The market value of the
silver in the dollar, at the date of the pas
sage of the act, was 93z cents in gold coin
Now it is about So cents in gold coin. II 1t
was intended by Congress to adopt the silver
instead of the gold standard, the amount pro-
vided for is totally inadequate for the pur-
pose Experience, not only in this country,
but in European countries, has established
that a certain amount of silver coin may be
maintained in circulation at par with gold