The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1878-12-23
lance than has ever yet been accomplished
in the same period of time.

The Alleged Drawbacks to Resumption.
There are two sources of fear as to the per-
manence of specie payments-first, the law
requiring the Secretary of the Treasury to
pay out the redeemed legal tender notes and
keep them in circulation second, the con-
tinued coinage of silver dollars. Nobody
contends that either Of these will obstruct
the immediate success of resumption, which
is perfectly assured; but apprehensions are
expressed that the compulsory reissue of
the notes and the unremitting stream Of
silver may again debase our currency and
renew the premium on gold. We will at
tempt to estimate each of these supposed
impediments.
TO begin. then, with the constant reissue
Of the legal tender notes after redemption.
If the whole volume of our paper currency
consisted of greenbacks redemption would
be ridiculous pretence with any such
condition annexed as their immediate re-
Issue. But nearly one-half of our paper
circulation consists of national bank notes,
and this part Of it may be contracted to any
extent necessary for keeping the whole vol
ume of paper at par with gold. The green
backs alone are insufficient as a circulating
medium, and the deficiency is sup
piled by the expansible circulation
of the national banks. So long as
the paper currency consists of two parts.
one of which is fixed in amount and the
other elastic, the variations in the elastic
portion will be sufficient for every practi-
cal purpose. The business Of the country
will always need a great deal more paper
than the fixed amount of legal tender
notes, however fully these may be kept in
circulation, and if the bank notes expand
or contract in proportion to the real wants
of business no evil can result from the per-
petual reissue of the legal tender notes.
The Treasury will always have both the
motive and the means Of restraining the
bank note circulation within proper limits.
Bank notes being receivable for inter-
nal taxes the government will always have
more or less Of them in its possession from
this source BY sending these home for re-
demption it may keep down the bank cir
culation when it threatens to be redundant.
As soon as it is seen that the Treasury is
pursuing this policy the banks of New York
city will Immediately begin TO send in the
country bank notes which they are daily re-
ceiving for redemption out Of the five per
cent fund and the paper circulation will be
quickly curtailed to any requisite extent
This can be done as securely by operating
on the elastic half of it as it could be by
operating on the whole of it. There will
be no difficulty in keeping our paper
circulation within bounds notwithstand-
ing the perpetual reissue of the re-
deemed legal tender notes. But if the
whole paper currency consisted of green
backs the law which requires them
to be constantly reissued and kept in cir
culation would completely annul the Re-
sumption act and make it stupid farce.
Even the law which arrested the contrac-
ton Of the legal tender notes Mt $346, 600, 600,
instead of allowing them to sink to
$500, 900, 600, as contemplated by the Re-
sumption act, is not likely to do any harm.
There is still wide enough margin left for
regulating the amount of currency by the
expansion and contraction Of the bank note
circulation. Resumption is bringing with
it 50 many unexpected uses for greenbacks
that the present amount cannot be
deemed excessive. The owners Of gold
coin will continue to deposit it in
the sub-treasuries for safe keeping as here
tofore but instead of receiving coin certif-
they will receive greenbacks of high de-
nominations, every greenback being virtu-
ally coin certificate after resumption.
This will absorb between thirty and forty
million dollars Of legal tender notes.
Then, again, greenbacks are to be received
for customs and to be paid to the public
creditors for interest on their bonds, which
is another new use that will have the same
practical effect as a reduction Of their
amount Moreover, the law forbids the
issue Of any bank notes below the denomi-
nation of FIVE dollars after resumption, and
the small note circulation Of the banks will
be replaced by legal tender notes Of small
denominations. All these new uses,
taken together, will be equivalent to re-
duction of the greenbacks considerably
below the limit originally fixed in the Re-
sumption act We conclude, therefore,
that the fears founded on the perpetual re-
issue of the greenbacks are chimerical.
The danger from the continued coinage
Of silver dollars is real, though distant.
For the next year silver coins can be main
tanned at par with gold, but unless the coin
age is arrested in time not only the silver
dollars, but our whole paper currency, will
sink to the bullion value Of silver, and gold
will be again demonetized.