Memphis daily appeal. [volume] (Memphis, Tenn.) 1847-1886, 1878-12-03
REPORT OF THE SECRETARY GE
THE TREASURY.
RESUMPTION OF SPECIE PAYMENTS.

The important duty imposed on this de-
partment by the resumption act, approved
January IA, 1875, has been steadily pursued
during the past year. The plain purpose of
the act is to secure to all interests and all
classes the benefits of sound currency, re-
deemable In coin, with the least possible dis
turbance to existing rights and contacts.
Three OF It's provisions have been substan-
tally carried into execution by the gradual
substitution OF fractional coin for fraction
currency, by the free coinage of gold, and by
free banking. There remains only the com.
pletion Of preparations for resumtiou in coin
on the first day of January, 1879, and its
maintenance thereafter upon the basis of ex
listing law.
At the date Of my annual report
to congress In December, 1877, it
was deemed necessary as prepara-
tion for resumption to accumulate
in the treasury a coin reserve of at least
forty per cent. of the amount CT United
States notes 9,ntt,standing A. that tlme il il
the resumption act the volume of United
States notes would be reduced to $500 OOO,-
OO0 by the first day of Januery, 1879. or soon
thereafter, and that q reserve IN coin Of
$l20, 900 would then be sufficient. Con-
gress, however, IL view OF the strong popu-
lar feeling against contraction of the cur
rency, by the act approved May 81, 1878, for
babe the retirementot any United States notes
after that date, leaving the amount IN circu-
latlon $346, 63l ,0l6. Upon the principle OF
safety upon which the department was act
ing, that forty per cent, of coin was the
smallest reserve upon which resumption
could prudently be commenced. it became
necessary TO increase the coin reserve TO
Sl3S co., 000
At the close of the year 1877 this coin re-
serve, in excess of coin liabilities, amounted
to S., OI6, ESQ SO, of which SIS. coo, 900
were obtained by the sale Of four and q half
per cent, and S25, 000, 600 by the sale of four
per cent. bonds, the residue being surplus
revenue. Subsequently, on the eleventh day
of April, 1873, the secretary entered into a
contract with certain bankers IN New York
and L0ndon-the parties to the previous con-
tract OF June 8, 1877, already communicated
to congress-tor the sale of $50 000 900 four
and half per cent. bonds for resumption
purposes. The bonds were sold at Z prea-i I'M
OF one and half per cent. and accrued inter
est, less commission Of one half OF one per
cent. The contract has been fulfilled, and the
net proceeds, $50 500, 900, have been paid
into the treasury IN gold coin. The s., 500, 900
coin paid on the Halifax award have been re-
placedzby the sale Of that amount of four Der
cent. bonds sold for resum ption purposes,
making the aggregate amount OF bonds sold
for these purposes 1876, 800 900. Of which
Sbo, ,OUO were four and half per cent.
bonds, and $50, 500, 600 four per cent bonds.
10 this has been added the surplus revenue
from time to time. The amount of coin held
IN the treasury on the twenty-third day of
November last, IN excess of coin sufficient to
pay all accrued coin liabilities, was $l4l 1885,
lUO, and constitutes the coin reserve prepared
for resumption purposes. This sum will be
diminished somewhat, on the first of January
next, by reason of the large amount OF inter
est accrulng 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 treasurer in the city of New
York, 1t was deemed important TO secure the
cooperation Of the associated banks of that
city IN the ready collection of drafts
on those banks and in the payment of
treasury drafts held by them. satisfactory
arrangement has been made by winch all
drafts on the banks held by the treasury are
to be paid at the clearinghouse, and all
drafts On the treasury held 10y them are to be
paid to the Clearinghouse at the office OF the
assistant treasurer, in United States notes;
and, after the first of January, United States
notes are to be received by them as coin
This will greatly lessen the risk and labor of
collections both to the treasury aud the banks.
Every step IN these preparations for re-
sumption has been accompanied with in
creased business and confidence. The accl-
mutation. OF coin, instead of increasing its
price, as was feared by many, has steadily
depressing and ruinous losses that followed
the panic of 1873 had not diminished IN
1873, when the resumption act passed; but
every measure taken in the execution or en-
torcement of this act has tended to Tighten
these losses and to reduce the premium on
CON, SO that now it is merely nominal. The
present condition of our trade, industry, and
commerce, hereafter more fully stated, our
ample reserves, and the general confidence
inspired IN our financial condi' ion seem TO
Justify the opinion that We are prepared to
commence and maintain resumption from
and after the first day of January, 4. d. 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 bullion, when with
drawn in the process OF redemption, either
by the sale of bonds, or the OF the surplus
revenue, or of the notes redeemed from time
to time.
The power to sell any of the bonds de
scribed In the refundlng act continues after
as well as before resumption. Though It may
not be often used, 1t Is essential TO enable this
department 10 meet emergencies. By its eI-
ercise it is anticipated that the treasury at any
time can readily obtain coin to reinforce the
reserve already accumulated. l aited States
notes must, however, be the chief leans. I'M
der existing law, with which the department
must restore com aud bullion whsn with
drawn In process OF redemption. The notes,
In the treasury until their superior Use and
convenience for circulation enables the de-
partment to exchange them a. par for coin or
bullion.
The act of May 81, 1878, already referred
to, provides that when United States notes
are redeemed or received IN the treasury I'M
der any law, from any source whatever, and
shall belong to the United States, they shall
not be retired, Cancelled or destroyed, but
shall be reissued and paid out again, and
kept IN circulation.
The power to reissue United States notes
was conferred by section 1913, revised
statutes, and was not limited by the resump-
ton act. As this, however, was questioned,
congress- wisely removed the doubt.
Notes redeemed are like other notes re-
ceivsd into the treasury. Payments Of them
can be made only In consequence of appro-
priations made by law, or for the purchase Of
bullion, or for the refundlng OF the public
debt.
The current receipts from revenue are suf-
fcent to meet the current expenditures as