The daily gazette., 1878-04-03


congress enabling him to dispose of
ponds to the required amounts he could
successfully carry out the provisions of
the Resumption act.
THE CONFERENCE.
The Secretary gave the following sums
as the amount of gold and silver coin and
bullion ON hand on the 2Sth of Februarv
last at the Treasury and the various sub.
treasures, assay Offices and repositories:
G Go,d ,3j1 100
Subsidiary silver Coin, 5'675' '49i
oiVer bullion. ................... 1885, SIT
io'ai.. ..''................... Sl34 $40 ,OoO
READY TO ENCOUNTER THE BANKS.
Upon the second point il may as well
be understood that the national banks
cannot throw upon the government the
burden of redeeming their notes. The
attempt would be suicide. They are
bound to redeem their notes on demand
at the Treasury with United States notes
or com and to maintain in their vaults
very large reserves of United States notes.
ANY effort of theirs to force the redemp-
tlon OF their reserves of United States
notes i'll coin would at once cause the
government TO withdraw all government
deposits from them; to present all bank
notes held or received by the govern
ment Tor redemption, and, if need be, to
exchange Unite States notes for bank
notes. Such a struggle as these gentle
men contemplate would end in their los
ing their power to issue circulating notes
AT all. Their talk about forming q line to
Dreak the government is not discreet and
Is not dangerous. | am more concerned
about what you will do than about what
they VIII do. The United States govern
ment already holds a larger cash reserve
for the redemption of its notes In pro-
portion to demand liabilities than any
bank represented by these gentlemen,
ana 1t has power to increase 1t. Our GER
tincates OF deposit, the most dangerous
form OF demand liabilities, are secured
dollar for dollar, by coin or United States
notes actually in hand, while the banks
owe over 5000, 700, 900 to depositors, the
great body of which is represented by
notes and bills discounted The only de-
mand liability we owe, not covered by
actual cash on hand, is the United States
notes, and of these $40 900 900 are in our
vaults and $4,000, 900 more the banks are
bound to retain in their reserves. With
coin reserve of 10000, 900 to S150, ,0OO,-
900 the redemption of $500, ,0OO, 900 of
United States notes would be easy and
that reserve could not be diminished to
any considerable extent by the banks or
any combination of banks without a con-
tinuous draft upon the intelligent self
Interest of the banks to prevent such a
struggle. Nothing could provoke it more
quickly than threats by bank officers and
II such struggle comes the government
with its reserves, with ample revenue and
the power to sell bonds, can easily main
tain resumption without fear of line of
bank cashiers anxious to break the Treas
ury or to force high rates of interest
THE POWER OF REISSUE.
On the last point, the power to reissue
is plainly given by section 8,579, Revised
Statutes, and is not cut off any more by
the notes coming into the Treasury in
exchange for coin than in payment of
tax. Even If the Supreme Court hold
them as no longer a full legal tender
they are rs much so as a bank note. If
the choice must be made between the
two the common interest would decide
in favor of the United States note. l
believe they both ought to circulate and
both be at par with coin. But nothing
is so discouraging in the progress of re-
as for national banks to shrink
from their share of the burden of re-
or to make threats such as
are stated by some of these gentlemen
and nothing is so injurious to the bank
ing system, or will precipitate its over
throwmore certainly than a popular con-
viction that the banks are endeavoring
to embarrass the government in MAIN
tanning resumption.
Mr.. Chittenden defended the bankers
who participated in the New York con-
ference from any suggestion of holding
out threats against the Treasury, and he
to Mr.. Ewing for confrma-
ton of that disavowal, which Mr.. Ewing
promptly gave.
WHAT THE GOVERNMENT HAS TO DO.
SecretGry Sherman went on to show
that all that the government had to do
in the matter of resumption was to take
care of some $780, 900 of legal tender
notes, while the national banks on their
side were to take care of the national
bank currency, and he undertook to
demonstrate that both the government
and the banks We're abundantly able to
do this.
Mr.. Ewing pressed him closely on this
point as to the effect of the presentation
of S50,0O0,000 of legal tender notes for
but the Secretary took the
ground that under all the circumstances,
and in view of the fact that the last
weekly report of the New York associa-
ted banks showed only an amount of
some S12,000,000 of legal tenders on
hand, such supposltion was not to be
regarded as possibility, particularly as
the banks themselves had to retain a re-
serve of legal tenders in order to redeem
their own outstanding notes.
Mr.. Eames suggested the question
whether the existing paper circulation
was not restricted enough for the bust
ness of the country, and whether there
was any likelihood of any considerable
diminution of it by its conversion into
specie.
Secretary Sherman coincided to large
extent in this view of the case. He
thought that paper circulation of six
millions was not too large to
meet the demands of business.
In further reply to Mr.. Ewlng's ques-
tons he took the ground that if there
was any doubt about the ability of the
government with its present means to
meet all the demands of the Resumption
act there would be no doubt whatever
about it if he were authorized either to
issue a popular four per cent. loan or to
sell four and a half per cent. bonds to
He had guaranteed of all the
specie that could be required if he would
,ell these four and half per cent bonds,