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


public debt and second to the sinking fund
Secretary sHEKNAS--i only say 10 you that
established custom as well as the theory OF our gov
eminent would seem 10 require that any sinking
fund provided for the cxtinguishment or the
debt cannot be applied until alter AL current
demands upon our revenues are paid. Otherwise
the Treasury would be bankrupt whenever there was
Temporary falling on IN the revenue. For instance.
the law which you read to me and which helped 10
frame lthe Law OF 1881 providing for tho sinking
Iund sets aside the receipts from customs 10 pay
per con. Of the debt. Now, although tha. was tho
law, Just as mandatory have road Ii requiring
the sinking fund 10 be main aned at ono per cent?,
inc sinking fund was never opened nor could II be,
during the war. The pledge was never carried out
until the old floating debt mainly refunded.
nj. Ewlsa-rnat was covered By tho blanket OF
Secretary saKRMAS-Not at all That matter was
presented 10 Congress frequently, ground that
y was Impossible 10 maintain sinking land until
there was an excess Of expenditure,
50 Il continued until myself complained Of il alter
the war was over insisting that, while right
We therefore carried through Congress- provision Tor
the sinking fund so that The money might DO applied
&c, Of February. ises. sua 50 " con.,nn osS
TO DO carried out until tho revenues fell below
tho expenditures, 50 as TO make Il impossible
10 pay the current expenses Of shc government and
TO pay the sinking fund at the Same time Thus from
the necessity the cass Secretary Of the Treasury
revenue bciore he paid the sinking iund Just o. the
manager OF railroad would be bound 10 pay hts hands
ami urpieh tho uei 10 biz motives before c
would pay tho interest on the nrss bonded debt.
NJ Ewise--was not the public deb. being reduced
Secretary SaERxAS-Up TO tho panic or 1873 Il vas
being reduced all the timc, ana We pad during
all those years than the law required what cali
the sinking fund-that IS the redemption OF the debt
MT. PHLLPs-From what source did the payments
Conner
Secretary SHgRMAx--From surplus rsvenuss and
so II continued until 1878 Thcn all ~ once lhere
was deficiency Of $40, COO COO Wcll tho Secretary
Q, mo Irssasury as matter Q. course, would 60 gu
any deficiency he would report that deficiency 10
Congress, and II there was any fault about Il II
Inn tnR Tar fsoslA
uJditiopn revenues TO keep up the sinking lund or
else should rcaucc appropriations Mr.. Richardson
rs took place. inc .3.o. ssnd.os
Of tho Treasury was gwen two mouths after
The c paalc ana no on ny . every Secretary, and
iuliy. Congress myself at the limo and take
my share of he responsibility " levy taxos
Acieucy IN the sinking fund was allowed 10 contiuuo
from year 10 year unit now and presume that u
make good tho sinking fund would like II very much.
But do not think Congress will do so.
Mr. EwlNG-I guess not
Secretary SHgRxAs-Becauso DO not think that the
people would sustain Congress IN II. So do thin
the sinking fund the actual deficiency In revenue be-
cause any secretary OF the Treasury who would
take to refuse TO pay the current expenses OF tho
erDment, and who would At tho same timo pay IN
whole amount Of this technical sinking fund 10 tho
purchase and payment OF The debt would DO over
hauled very quickly.
now NEXT DRAIN OF GOLD.
Alter the exhaustion OF this point In the conference
Mr. Ewing put this question ihs Secretary: case
OF q drain OF gold from tho Treasury what measure
would you resort 10 10 order TO check IT, mean inter
resumptionf
strong that the thing would check itself You can
scarcely imagine in tho probabilities of business that
with no outstanding liabilities that covered by
actual cash in hand, except $500 600 Of legal
tender notes, the drain upon the government would
DO SO great as 10 exhaust the reserve OF $120 600
That proposition is all based, upon the fact
that 1920, 0OO. 600 would pay $500, o00 00O-wo oil
know that Ii not so-but upon the that II IL I'M
possible TO gather together United States notes and 10
present thcm in such ana such a continuous
sreafn, aud that tho effort 10 do would raise
tho value United States notes Thor couvcn,sncc
10 90 great and tho necessity for them so apparent
that sucn an effort would nj once bring thcm up 70
par In gold. thnl that drain Of ave, ten niteen
value OF grcenbacks until they at par in gold
an then there would be no object At al 10 drawing
MT EwxG-after resumption tho grecnback mus,
remain ut par in gold - long rs tho Treasury
tains resumption.
Secretary snExmAs Certainly, and while tbsv are
at par IN gold they VIII not be presented TO any
siderable extent 4,N
Mr. EwISo--Oi course, II there was an established
dnerenee Of one per cent or half Of ono DER C. al be-
twosa soiu snd grsenbacks the Treasury would 10
broken pretty quick.
Secretary SHERMAN-Ycs. sir. or a quarter OF ono
per cent; therc Is no doubt about that
Mr. EwixG-Thcrefore, after resumption, green
backs must necessarily be nj with gold long "a
tho Secretary rs ablc to maintain resumption. Now
] am suppostng case OF drain Of gold from tho
action oil IOrcicn CrcdtOr8 or from other cause
aud want TO kn~w what means you would resort TO o
check II.
Secretary sHERxAs-I do not think that Il would DO
necessary 70 resort TO sny means; but n IL were me-
cessary to dew some means would resort 10 such
have been adopted Ia other countrics-tho tempo.
rary suspe osion Of specie paymon'. That Is qucs.
ton for Congress Tue British Bank act which is so
often quoted as tho standard makes provision Tor
suspension. There Is no legal suspension OF payment
IN England, nor does GU: law mako any provision Tor
H. II the government should meet such an adverse
state of circumstances ~ to mako suspension rbso-
lntely necessary tho government would necessarily
hnvo 10 take the responsibility OF H. esvn g Congress
10 determine whether tho circumstances justified It,
That has always been 30.
Mr.. PmrLLIrs-Then do you think tina, the Score
tary Of tho Treasury has power 70 suspend specie
payment?
Secretary SngRxAS-No sir; Blu. II demands wcro
made upon tho Treasury which tho Secretary could
not pay unless no was to pay them out OF his own
pocket he would have 10 stop paying That Is all that
Mr. EwrSc-when short OF tho point OF Jour actual
inability 10 go farther would you feel at liberty
stop2
Secretary sHERMAS-rhat cannot state. That will
not occur 10 my time " you give such Q reserve
or 10 my time In my Judgment. But We cannot
tcpate what the future will bring forth We do not
know but that We may DO involved in which
would compel suspension Of payment md wc do not
know what might be too effect OF war IN Europe
sFPgcr or WAR ~ ErRorE.
point Would 10, general war in Eusonc result NJ, -
raising the price Of gold?
Secretary saKnmAs -w,so men differ very much
uron that ltnink that general wsr IN Europe
would give snch demand for our agricultural pro.
ducts and Tor everything that produce and soil
y would probably inspire conndcnce and there womb
Mr. Pnitips--Nieht u not raise the prico Of gold as
Tue CHAnsMAx-Dsr might 10 not have tho e1ccs OF
Secretary sHKRsAS-we arc not bound 10 pay for
our bonds unless thoy arc due.
Mr. EwisG--But banks ana Others that hold gold
would DO tempted 10 buy bonds md tho gold would 90
Secretary Suruw,y-I do pot mink so 7 bavc