The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1878-04-12


about which there has been 50 much vain
speculation, has resulted very well. He
Yesterday concluded written contract with
the members of the late Syndicate for the
ssle of $50, O0O, 900 of 1-2 per cent bonds,
the gold receivable for these bonds to be
made part of the reserve for redemption
purposes. The Syndicate has such solid
extensive financial connections and so vast
nm amount Of capital that it's purchase OF
this heavy amount of bonds, at this
time, is an Endorsement of the government
almost as valuable and helpful as the large
addition it brings to the coin reserve OF
the Treasury. Among the leading MEM
bers of the Syndicate are August Belmont
4 Co., representing themselves and the
Rothschilds Morton, Bliss Co., repre-
senting themselves and Morton, Rose q
| Co., Of London j. & w. Seligman. repre-
senting themselves and Seligman Brothers,
of London, and Drexel, Morgan Co.,
| representing themselves and J. 5. Morgan
| 4 Co., OF London. 1t is not merely the
we'll known ability of these great firms to
fulfil their engagements that is reassuring,
but the fact that these keen and
far-sighted fnanciers, even after the
drawbacks of the Silver bill, have
sufficient confidence in the government to
make this large purchase OF bonds, and to
be willing to come forward and lend their
powerful assistance in restoring our cur
rency to sound basis. The moral and
financial value of this signal expression of
confidence is too apparent to require any
elucidation.
We are now able to estimate, with close
approach to accuracy, the resources of the
Treasury for resumption on the LIST OF Janu-
ary next. The conditions of the new loan
are the immediate payment of $4,000, 900.
and then $1,000, 900 per month until the
total of $50, 600 shall have been paid
The Treasury has already 500, 100000 OF coin
and bullion available Tor resumption; and
rs silver is to be coined at the rate of
81, DOC, 900 per month it will have $50, 000, 600
Of silver at the date Of resumption. The
coin reserve OF the Treasury will therefore
consist, on the LIST of January, of these
sums:-
Proceeds OF The now loap o. 600 700
silver coin... S2,oooooo
Total. sl72, 600, 600
Secretary ShermaIfs estimate of the avail
able coin now in the Treasury at $780, 600, 900
is not excessive, although the amount
against which there are no demands is only
ST., 900, 600. He stated in his conference
with the Finance Committee of the Senate
that there is constant average bal
ance OF $40 OO0. 600 Of outstanding drafts
and the called bonds and interest due,
and unpaid though due" He may as
safely count on this as bank does on the
average amount Of its uncalled-for deposits.
There is also constantly in the Treasury an
average OF about $50, 600, 600 tor gold certii-
Gates, some part of which will be practi-
cally available for resumption il he chooses
to use it tor that purpose, because the law
authorizes him to issue gold certificates
twenty per cent in excess OF the deposited
gold--a privilege, however, Of which the
Treasury has never yet availed itself These
explanations, which we reproduce from
Secretary Sherman's interview with the
Senate committee, make it apparent that the
foregoing table does not overestimate. but
underestimates, the coin reserve which will
be in the Treasury on the 1st Of January
next With S172, 1000, 900 CT coin, and no
obligation to use it for any other purpose
than the redemption of the then outstanding
greenbacks, there is hardly possibility that
the experiment Of resumption can mis-
carry.
Ii the position of the greenbacks in the
general circulation were similar to that Of
bank notes the expected reserve would no
doubt be inadequate. But the Resumption
act Of 1875. which Mr.. Sherman is preparing
to execute, explicitly contcmplates the re-
tention of $500. 000,000 Of greenbacks in
circulation, with their legal tender function
unimpaired. This makes them precisely as
good us coin for all domestic uses. The ma
tional banks can keep their reserves in
them rs substitute for gold. They will be
inst Us good for rcdeeming bank notes. pay
ing bank depositors, meeting clearing house
balances and discharging private debts as
gold itself would be. The continued reten-
ton OF their legal tender quality will per-
nit large economy in the use Of the pre-
cious metals. Without this resource every
bank would have to keep q reserve in coin
equal to its present legal reserve in green
backs. But inasmuch as $500, 900, 600 Of
the greenbacks are to be retained in
use, with their legal tender quality
unimpaired, they dispense the national
banks from maintaining the usual specie
reserve. and will perform the same Office
MS coin in the domestic transactions of the
country. They will do duty as a substitute
for $500, 000,0 600 Of specie. Being at par
with coin after resumption by the govern
ment, thoy will DO received for duties at
the custom houses, and equally with gold
and silver will be adequate for every none
tary function except the payment of for