The New York herald., 1878-03-02
A Form liable Peril-A0w 1t May BE
AVerted.

Silver act will depend on the manner in
which it is administered by the Secretary
Of the Treasury. He may so administer it
as to bring distress and ruin within the
ensuing twelve months, but on the other
hand it is in his power to administer it in
such way that its operation will be per-
| fectly harmless for at least a year. Further
opposition to the law being futile the
trained business sagacity of the country
should aid Secretary Sherman by sugges-
| tions as to the best methods of escaping
the great perils with which all interests are
| threatened.
No debate was allowed on the passage of
the Silver bill over the veto, but in the
| House permission was given to members TO
publish in the Record such remarks as they
had prepared to deliver on the occasion.
We have received printed slip OF MIR.
Hewitts remarks in advance of their publi-
cation, and we are not prepared to say that
the hideous prediction he makes OF the
practical operation of the bill would not be
fulfilled if it is administered in the manner
he supposes. He af1irms that it viii! con-
tract the legal tender circulation at the rate
of at least five million dollars o month,
or more than sixty millions within
the first year. Now, as the loans
and discounts based on the legal ten
ders are in the PROPORTION OF four to one,
Mr.. Hewitt argues that the inevitable ef-
feet of the Silver law will be to contract
loans to the enormous extent of two hun
dred and forty million dollars during the
first year Of it's operation, which would be
such quitting on of the screws" that the
tottering business of the country could not
survive it. "rhe business of the country"
exclaims Mr. Hewitt, 'swill find itself in the
relentless grasp Of passionless machine
which. like the iron woman of Nuremberg,
will crush the victim in the ever-contract-
ing embrace of death"
The reasoning by which Mr.. Hewitt
reaches this fearful conclusion is quite
simple. He maintains that the amount Of
gold in the Treasury will barely suffice to
pay the coin interest on the public debt for
one year. In three or four months silver
enough will have been coined for paying
customs duties, and thereafter no gold will
source. The annual revenue being equal
to the ANIMAL expenditures the reserve
in the Treasury will remain undi-
minished, but it will consist Of green
backs instead of gold. In the course
Of year the gold will be all paid out for
interest. 1t will be replaced by greenbacks,
because there can be nothing else to take
its place. After four months only silver
will be paid for customs, SO no more gold
can get into the Treasury from that source,
and greenbacks will continue to be paid for
internal taxes. The whole revenue Of the
government will therefore consist Of silver
and greenbacks. AS only thirty-six millions
Of silver can be coined in year,
and as twelve of the thirty-six mill
ions will remain in the hands of
the merchants for paying duties, the
Treasury cannot have more than twenty
four millions Of silver at the end Of the
first year. The balance of the present gold
reserve, amounting to sixty-three millions,
so Mr. Hewitt maintains, will necessarily
consist of greenbacks withdrawn from cir
culation to keep up the reserve Now, if
this should be the actual operation Of the
Silver law, if it should contract the cur
rency steadily and relentlessly at the rate
of more than sixty million dollars year,
and loans and discounts more than four
times that amount, the strain on the busi-
ness of the country might indeed be enor-
nous, although we think that Mr.. Hewitt
has overdrawn the picture.
But there is no real necessity for adj
ministering the Silver law in such a way as
to cause O rapid contraction of greenbacks,
and consequently of loans and discounts.
1t is quite in the power of Secretary Sher-
man, if he SO chooses, to prevent any con-
traction of the legal tender notes at all. He
has only to retain in the Treasury all the
silver dollars that are coined, and he
will prevent the new law from having
any effect on business for q much
longer period than Mr.. Hewitt takes
into his calculations. If he pays out
no silver dollars the merchants can get
none for paying duties, and the customs
revenue will continue to be received in
gold, until the whole gold reserve of the
government shall have been transmitted
into silver reserve--a process that would
require more than two years. We do not
suppose the Secretary of the Treasury will
90 to either extreme. But it being clearly
in his power to prevent the Silver law from
having any effect at all on business for the
first two years it will be easy enough for
him to falsify the gloomy predictions of
Mr.. Hewitt
The South Carolina Infamy.