The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1878-04-05

Last summer when accum uared SEQ ooo 900 Of gold
ana vas gong on refunding the dooi. every sisn o.
prosperity was Increasing ana business was getting
| better.
Mr. Ewmc-I have failed to learn that in your con-
ference with the Senate Committee you spoke OF the
preparation or resumption she agony OF propara-
ton Tor resumption" and think that the country
will agree with you that there Is a good deal OF agony
| init
Secretary sHgRnAs-wherever thore 10 an evil
caused by Inflated money the instincts oil human
nature lead men back 10 specie payment. and tho
whole process from 1873 down tue present time Is
process towlrd resumption.
/ Mr. EWING II tho Resumption law had never been
passed the country would have revived from the panic
OF 1878 during the year 1879.
/ Secretary SHERMAS-iou and l. NO doubt differ
very honestly on that point
| EyYEcr on THE BANKS.
Mr.. HARTzsLL-what would bs tho erec, OF this Re.
sumption act upon Tho national banks and their de-
Secretary sHERaAS-I cannot SEQ that /, viii have
| any injurious effect. Wherein
Mr. HAHrzkLL-l understand from your statement
/ mere, last MONDAY, that tho national banks hold
5000, 900 900 OF deposits Lack OF confidence might
induce the derostors to go 10 these national banks
AND demand on tho LIST OF January sr soon alter tho
resumption act takes effect, large amount Of gold.
Secretary sHssmAs-No; United s,ascs notes.
Mr. pHiLLrs-whicn would command gold.
MI HARrzELL-And II tho banks ala mol have them,
and the supposiuon {. that they could not2
country navo but so, OoO, 900 OF greenoscks
Mr.. HARrzELL-rhe uauks would have 10 furnish 10
the depos,tors either gold grcenDacks, but they
could no. furnish eanerto halt tho amount OF their
| dcposlts2
| Secretary SuEgMAS-No SIR
Mr. EwIxG-rne aggregate OF national bank dc.
posts shown BY tho rcpor. Of the Comptroller is
| ~, l20 900, O0O
Secretary SHERMAN 10 Mr. Har,zelD-Your ques-
ton 10 q very proper ono | can only give you my
idea All banking is based upon the idca that larger
amount OF papor money can 10 maintained IN
ton than the money IN which IL is TO DO redeemed.
Otherwise there woula be object 10 banking. The
/ hank OF England aud the small banks oil England
MAINTAIN cash reserve varying from Line per cent
pto about thirty three or forty per cent. The Bank
Of France and the Bank OF Germany, which really
government repositories, MAINTAIN largo reserve
reserve OF forty per would be considered very
that experonce has shown 10 tho satisfaction
OF tho banks, that their deposits viii all de-
crods. Most Of these aepostors are debtors 10 the
banks as we'll as creditors OF tho banks. They
good OF the deposits of the banks and expert
ence shows that a certain amount Of money on hand
port n, sufficient, As 10 tho notes OF nas,onsi BANKS
every dollar oi them " secured by United States bonds
amour. Of notes ooss,andnr ana these BONDS arc Of
sucn universal credit aud ready safe that, IN The
| converted into auv kind of money.
orHEk THAN NATIONAL hanks.
Mr.. Ew.sc-Wha. ABOUT Inc 81, 5oo, 900, 600 OF de-
| p0sits IN other banks than national banks?
| Secretary SHERMAX-Thcy private individual
debts The government mas nothing TO do with Thorn.
Mr. EwiSG--Tno governments has certainly to con-
sioer them in tho act OF resumption.
Secretary snERMAX-lt has 10 consider tnem just as
| II has TO CONSIDER any other public fact
| Dir. EwiSG-M0rs Than that; they have . direct
bearing on the practcability OF government rcdcmp-
tion for the Legal :endcr Is tho only absolute
| coin that can demanded IRON tho national banks
and on the $500, 900 600 OF legal tender notes rest
$500 600 900 OF national bank and 81 100 600
| OF cash demand deposits. That all 70 DO consld-
| cred.
secretary sHERxAS-It Is all TO be considered, bu.
$40 will pay $40 Of deposits IN tho ordinary course OF
WHAT Constitutes RESUMPTION
Mr.. HARTzkLI-DOes that tho Rovern-
mont will, the LIST Of January, be abo TO redeem
al legal tender notes, bring Of Nse TO specie
resumption Is that what wo mean by specie resump
Secretary snEaMAS-I mean by specie resumption
the equivaienoy OF these United States notes with
coin, SO that the people Will take paper NJ par with
'nsy on. sos
Of greenbacks will DO presented for redemption.
Mr.. HARrzELL-Ihc national banks are close corpo-
Hatons, As understand, and thorc 10 general under
standing between them all questions affecting their
interests, IND by their unanmity 10 applying
Secretary SnERMAS-Mr. Chitsendsn here can toll
you that there are people who have such dvcrso
| views the national banks
| Mr.. HARrzxLL--lf II should appear shns the safety
and security OF tuose national banks demanded u,
ana present Thorn 10 tho Treasury as would dram inc
Treasury OF all the gold that has. aud thus nbso-
from carrying out the prov,s,oss or tue resumption
law9
secretary sHHxMAx-I do not think, In tho
1rss piaco, that tney would attempt 10 make
such osanbastioe against tho government, add, "a
the second place. think that II they did i would
bo very easily met IL Is not possible, with the
amount OF legal tender notes WHOM they
hold-sdm,,tcd to DO about SO, ooo. ooo-.na,
10 the Treasury such thing 10 not possible, because
tho banks could not be brought into nnything like q
coniinuous stream demand on tho Treasury; and
then, besides Tho Treasury has ample power 10 MAKE
the DaEks redeem their notes
Mr. EwIxG-in legal tender notcs2
| Sccrct~f, SnERMAN-Ycs, IN legal tender notes
Mr.. EwISG-Or IN silver and gold?
| THE TREASURY AGAINST
| Secretary SHEnnAS-Ycs, that would throw the gold
back on the Treasury. Some Of tue papers thought
| that In my remarks other day threatened tho
| banks | did not threaten them. but thcre
doubt about 1t that the Treasury would DO stronger
thun tho banks such contest. There Is no dan Ger
that national banks going to combine pre-.
| tont their leg II tender notes 10 the Treasury.
| Tho CuAiRsAx-It would DO much more reasons able
to suppose that tho banks would agree among them
selves that the'r obligations and operations would DO
| currency raiher than In gold.
Nj. HARTzKLL-suppose that tho depositors In tho
nationa al banks SHOULD run In and demand payment Of
their deposits would not tho national banks be bound
Secretary snsamas-rho banks can pay their do
tender.
Mr.. hAnrzsLL- How could they when there only
ABOUT t220, 600 900 ~ them IN circuationf
/ Secretary STANDARDIZATION, " they cannot ges them,
how can they present ihom 10 US for rsdemptlenS
Mr. EwiyG-lhcy have SO. ooo, 00o which they can
secrc,Drv sHgRxss--How c,n they bring
| $4,000, DOOR The national banks In Ns~ York,
where tho largest accumulation OF grccnbacks 10,
have only got $f1 0O0V0v shink II is sufficient 10
say that Mr. H,r,zeIls suppostion Is an imprsctics
bic one-nrst. because the banks could have no do
sro to 90 such nng aud rocond, bee iuss II could
nos be done. IL would havc to be very slow
ton and With of 900 90 tl&0 000, 900
oven that extreme danger could be mel.
| Mr. BgL.-spppose tho ercsnbacks were 10 obtain
nm equality 10 val no with gold; how wouid.th repeal
| OF tho Assumption act then affect rssumptionr
| Secretary Summarizing repent OF tho Resumption
act would prevent me from maintainID g resumption
by the saIs oi banda That would DO the nvss thing.
Thon the Resumption net 10 the only provision OF Law
which requires me 10 redeem United states notes In
| coin.
Mr. iEwnts--But y,u are NJ fbersy 10 do 80. If the
Resumption act wcroorepcaicd you might maintain
equivaloncy Of paper ana coin.
| secretary SnERMAS-No. IL 10 perfectly clear that
have no right TO exchange one form OF moocy Tor
another
Mr.. EwrSo-Rut you could pay ous gold and silver
Secretary SHERMAE-Ycs
Mr.. EwiSc--And you could thus maintain an
equality of coin and upon your theory, which
10. that rs soon as paper coin equal, nothing
will DO likely ~ occur 10 disturb tho eqnaI zsion
Secretary sHERMAy-rbcrc viii be nue.