Daily Kennebec journal., 1878-04-08

very point. Would not q general war in Europe
result in raising the price Of gold
Mr.. Sherman--Wise men differ very much up
on that. | think . general war in Europe would
give such demand for our agricultural products,
and for every thing that we produce aud SELL that
il would probably inspire confidence, and there
would be less danger.
Mr.. Phillips-Might it not raise the price of gold
Is compared with curTencyf
The Chairmsn-Or might it not have the effect
Of sending our bonds here.
Mr.. Shermsp-We are not bound to pay our
bonds unless they are due.
Mr.. Ewing-But banks and others that hold
gold would be tempted to buy bonds, ana the gold
would go out.
Mr.. Sherman-I do not ink so. have shown
you now in these figures that with reserve as
mentioned the government of the United States
is stronger for resumption than the Bank of
England.
Mr.. Ewing-Is it powi
Mr.. Shermsn-No / say it will be if you give
us the reserve mention. 1t will be stronger than
the Bank of England. | think it is now, but
say that before the first of January, with an sddi-
tonal reserve of $50 900 900, and If you will pro-
v ide enough means TO caIiy on the current ex-
penses of the government. with or without regard
10 the sinking fund, we will be stronger than the
Bank of England. If you would make good the
sinking fund we would be better, but if you do
not make 1t good il does not affect the question of
resumption. With that $50, 900, 900 additional
(making our reserve Sl30 900 900 or $40 900 000)
with the fact that our noies are of universal credit
and distributed throug hout this great extent of
the country, and among forty millions OF people.
with the TACT that so 600, 900 OF our notes are now
in the treasury not likely TO be called upon, and
with the fact tnst the banks have to take care of
$50 900 more which they cannot run in upon
us, without subjectiDg themselves to violation OF
the law of their creation with their notes abso-
lutely secured by United States notes., if we
cannot ma aintain specie payment then it is impos
slble to MAINTAIN specie pay ment on paper eircu
lation.
The Chsirmsn--That is on the theory all the
time that paper and gold are equivalent
Mr.. Shermsn-Certainiy spt Gle payment means
the equivslency OF gold aud paper. 1t is on the
theory that the one per cent. difference between
gold and paper will disappear before the first OF
January, or else | would not commence specie
payment. But suppose | sm mistaken; suppose
your fears are well grounded and that | Am
sanguine, NJ some people say | am, still Congress
will meet 10 December, and then the question will
be SO spI aren't TO every man, that If the Resump-
tion act cannot be carried out will come to Con-
gress al u say lshave not been able to accumulate
this reserve, or that AN adverse state OF circum-
stances has arist n, and | am not able to do what
the Resumption act requires me to do.
Tne next question considered was that of the
National Banks, and Mr.. Hartzell asked if il,
should appear that tho safety and security of the
National Banks demanded II, could they not unite
aud ge, together such securities and present them
to the Treasury wouid drain the Treasury of all
the gold it has aud thus absolutely prevent, BY
their combination, the Secretary from carrying
out the propositions of the Resumption awi
Mr.. Shermsn-I do not think, 10 the first place,
they would attempt to make such y combination
against the government, and in the second place
think if they did it would be very easily met. 1t
is not possible with the amount of legal tender
they hold (seveDty miliions) that they could take
the whole of them and present them to the Treas
ury. Such q thing is not possible, because the
banks could not be brought into anything like CO.
operation Of that kind, nor could they keep up
continuous stream of the demand on the Treas
ury. and then, besides, the Treasury has ample
power to cause the banks to redeem their notes.
Mr.. Ewlng-ln legal tender notes
Secretary Sherman-Yes; in legal tender notes
Mr.. Ewing-Or in silver or godi
MIR. Sherman-Yes, that would throw the gold
back on the Treasury. Some Of the papers thought
that in my remarks the other day thre atened the
banks. did not threaten them, but there is no
doubt about il that the Treasury would be strong
er than the banks in such contest. There is no
danger that the national banks are going to COM
bine 10 present their legal tender notes to the
Treasury.
The conference lasted over three hours, the
Secretary showing no abatement of his confidence
in the ability Of the government to maintsin re-
sumption.