The New York herald., 1879-12-08
Secretary Sherman on the
Legal Tender Clause.
LEGISLATIVE ACTION DESIRABLE.
The Three and a Half Per Cent Fund
Ing Plan Impracticable.
MORE POLITICAL EMIGRATION SCHEMES.
Appropriation Bills Awaiting Supreme
Court Decisions.

Court Decisions.
FROM OUR SPECIAL CORRESPONDENT.
WASHINGTON. Dec. z. 1879.
THE LEGAL TENDER CLAUSE AND MIR. WOODS
THREE AND HALF PER CENT FUNDING
sCHEME-vIEws OF SECRETARY SHERMAN.
Secretary Sherman is OF the opinion that it would
be better for Congress to repeal the Legal Tender
act than leave 1t to the Supreme Court to do. The
reports circulated here some days ago that he had
expressed some doubts about the advisability OF
withdrawing the legal tender quality at all are OF
course absurd. Mr.. Sherman said to your corre-
spondent IN conversation on the question Of legal
tender last evening that in his judgment simple de-
c8on by the Supreme Court in the of Chttenden
against Butler that to make paper money legal
tender in time of peace is unconstitutional. might
cause some Inconvenience and possible disturbance
in the finances; that he thought it more advisable
that tho legal tender quality Of the United states
notes should be abrogated by Congress. which IN
doing could at the same time adopt certain pre-
cautionary measures and guards which would OBJ
viate any public inconvenience. such proviso
that all contracts made after the repeal should be
held to call for lawful money, unless gold silver
was specified. Such q proviso would be needed to
protect the banks as we'll as business men in
general The repeal Of the legal tender quality will
not he adds affect the Of United States for
redemption purposes by the banks, they
'swful money under tho statute. He does not be-
leve that any inconvenience need necessarily arise
from the repeal Of the legal tender clause.
Mr.. Sherman was asked by your correspondent
what he thought Of Mr.. Fernando Woods propo-
sition. developed in conversation with Mr.. Wood
reported in last Thursdays HERALD. to issue three
and a half per cent bond for refunding purposes.
The Secretary replied that nothing could make him
happier than to be able to refund in three and half
per cents. and that if Mr.. Wood would bring him
the offer Of responsible bankers in New York that
they would take such bond he would be very glad
indeed to support Mr.. Woods proposition. but
without such assurance which he himself had not
been able to get, he thought 1t questionable. He
thought there was but one thing better than Mr..
Woods three and . half per cents. and that would
be three per cent bond IL market could be found
for 1t. Up to the present time. however.
his information led him to believe that nothing
lower than four per cent bond would find mar
ket at par. But he is by no means obstinate, and
whenever Mr.. Wood produces responsible bankers
to take three per cent bond Off his hands at par
tine Secretary will be found in happy and receptive
frame Of mind.
Concerning another project Of Mr.. Woods. de-
veloped in tho same interview in the HERALD, to
use $1OO.OOO.OOO of the Treasury gold to buy
in outstanding bonds. Mr.. sherman remarked
that this would sweep away the whole Of
the gold now held for redemption pur-
poses. The Treasury has In store q large
quantity OF gold not owned by it, but il has the
property of the government. only about 500
with about $45.000000 Of silver. aud Mr. Woods
project would leave him nothing except silver to
redeem United States notes In. For this reason he
thought 1t inexpedient and unwiso. It will be re-
membered that Mr.. Sherman in his annual report
recommends the passage of law specifically defn-
ing tho resumption fund. and that this fund be
.set apart for the redemption Of tho United
States notes. and that the notes redeemed shall
only be issued in exchange for Or purchase Of coin
or bullion" This would Of course make it impossi-
BILE to it as Mr.. Wood proposes for the purchase
Of bonds. 1t is hoped that Congress will speedily
enact sach law, because the hoard of gold in the
Treasury is at present and already at the last
session o temptation to q number of enterpr1sing
Congressman. who cannot SEQ the use of hundred
millions in tho Treasury while there remains so
much unimproved slack water navigation. To urge
that it is a sacred fund to be kept to pay of
deem the greenbacks. seems to these worthless mere
nonsense. and unless it is made secure it will be at
tackled from more quarters than ono.
MB. BUCKNER, CHAIRMAN OF THE BANKING
AND CURRENCY COMMITTEE, ON PAPER
MoNEY-opposITIoN TO THE OLD STATE
BANKS.
1t has been reported here that Mr.. Buckner chair
man Of the banking and Currency Committee. IA
vors q project to repeal the tax on State banks.
which is desired by some Southern and Western
a1l;
old State bank system. from which the people sui.
fercd SO much and constant loss before tho
war. The report is false. Mr.. Buckner
does not favor the repeal OF the tax. On
the contrary. he is opposed to the revival Of the
State banks His belief is that the national
banks ought to be extingushed and that tho govern
ment should be the exclusive issuer of paper money
in the shape of the present Treasury notes. which,
however, he holds ought not to DO n legal tender.
He holds that the issue of paper money ought not
to bc permitted to private persons corporations
under any circumstances. but that tho government
alone should supply the demands OF tho coun-
try In this matter; that its notes should
be redeemablo in coin at all times
on demand, aud that nothing but gold andlsilver
should be a legal tender. Mr.. Buckner would prob
ably DO found to agreo with the reference to local
made by Mr.. Raum. Commissioner of
Internal Revenue. in his last report. Mr.. Raum
says:-
During the past two years assessments amounting
to $685. i43.05j have beon made against various
porations and individuals upon circulating notes
issued in dcrogaton OF sections 3,412 and 3,413
United States Revised Statutes. and sections 10 and
70 of the act of February 3. 1875. There
to be q growing disposition in many parts of
the country upon the part of individuals orpora
tons to issue to bo used local circ ulatio
payable either in money or trade. Experience has
shown that such issues deusive and pernicious
substitute Tor cash. The laws In question to
be the only protection the people have against a
Hood of these and dangerous notes. and. In
my opinion. thoy should not bc repealed.
FROM OUR REGULAR CORRESPONDENT