The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1878-04-03


trate his purpose to resume specie pay
ments on the lst of January, 1879, according
to law One of these sets of directors con-
sists OF the soft money men, who deprecate
resumption i'll every shape and prefer
permanent currency OF irredeemable paper.
The other set Of DIRECTORS consists Of repre-
sentatives of the banking interest. who
profess to desire resumption, but hope
to defeat it in any form which would
not retire and cancel all the legal tender
notes. These two sets OF directors, who
totally differ in principle, are just now
playing into each others hands for the COM
mon purpose OF defeating resumption at the
time fixed by law. The banking interest
desires 10 force all the greenbacks out OF
circulation in order that the national banks
may supply the whole paper currency OF
the country without competition. The
motive Of the bankers may be more honor
able but it is not less interested than
that Of the infationists who repu-
date the idea of specie payments
alike in theory and in practice. Secretary
Sherman is confident of his ability to exc
cute the Resumption act in spite OF the
conjoint opposition Of the infiationists and
the bankers
In Mondays conference between the Sec
rotary and the House Committee on Bank
ing and Currency he disposed OF the most
formidable argument that has been urged
against the practicability of his plans.
That argument has often been presented,
but never with so much emphasis and vigor
as by certain New York bankers in their
recent meeting in this city with the visit
ing b-committee. The statements made
by the bankers in that interview seemed. as
reported, to have an mir of menace. although
that could not have been intended. The
sum OF what those rather hysterical bankers
said was that the whole stock OF coin in the
Treasury would be exhausted on the first
day Of resumption by the eager demand Of
the banks for the immediate redemption of
all the legal tender notes in their possession.
1t was asserted that the privilege Of stand
ing hrst in the line on that day would be
worth at least fifty thousand dollars to
the fortunate bank whose cashier
should secure the most advanced place in
the general scramble tor the government
coin. 1t was assumed thnt the banks could
and would accumulate greenbacks enough
to enable them to transfer in single day
the whole coin reserve of the government
into their own vaults, and, having stripped
the Treasury bare on the LIST Of January, to
force it into suspension again on the I'd day
Of the month.
The published expressions Of some Of the
bankers were SO impetuous that Secretary
Sherman was perhaps justified in treating
them as threat and replying in q tone
of defiance. He made it plain enough that
this menaced game is one which two can
play at. The banks have a larger amount Of
paper in circulation than the government.
Their liability to redeem their notes will
not begin on the 1st of January, but exists
now md is OF perpetual obligation. The
government could easily retort upon them
their own sharp practice by pouring their
own notes back upon them for redemption.
I. could ut once withdraw all of its own de-
posts from the banks and then force them to
redeem their notes ut such q rate as would
bring them speedily to their senses If
eminent in the manner threatened it could
easily buy up their own notes with the
returned greenbacks, and, by presenting
them at once for payment, recover the coin
into which they had converted their re-
serves. The government possesses too
formidable a power over the banks for them
to think Of making such IN experiment
after rejecting on the situation. We re-
joice that Secretary Sherman has, once for
oil. exploded this implied threat by ex-
posing its hollowness and showing
what destructive boomerang il
would prove to the banks If they
should attempt to execute it. If the banks
understand their true interest they will CO.
operate with the Secretary Of the Treasury
and foreyo all attempts to thwart him.
The hubbnb which fastidious financial
purists are trying to get up respecting the
retention Of part Of the grecnbacks in gen.
eral circulation Is of no consequence. For
some time after resumption the greenbacks
may play useful part in the general cnr-
rency Of the country. Their Office will be
very similar to that Of the notes OF the Bank
Of Englond, which are q legal tender every
where except by the bank itself at its
own counters. This arrangement permits
great economy in the use of gold. In Eng
land there is but one gold reserve in the
country, and yet no country in the world
has soundcr currency. Our whole paper
currency will be kept at par in coin when
the greenbacks come to be redeemed in
coin. II would be as absurd for the banks
that hold them to rush them into the
Treasury for redemption as it wculd be for
the banking institutions Of England to
make run on the national bank for the
purpose Of draining away its gold re-
serve. In England everybody who needs