New-York tribune., 1879-12-22
WAsHIxGToy. Dec. Y. is'
Hon. n. McCULnCH.

Hon. II. McCULIocH.
DEAR >lR: should have ACKNOWLEDGED the rr-
cept OF your kind favor OF the 9th inst before this
but for engagements usually very eIactlng at the
commencement OF the sessions Of Congress.
The object IN requiring the National banks
to hold gold and silver as part OF
their lawful money reserves Is To make
both coins play part In the circulation Of the
country and to relieve the Treasury of ifs accumn-
lations. Ii IL a step IN the direction indicated by
you-nOt so decided and rashca, perhaps, as that
recommended ID your esteemed favors; but
necessary fOrerUnner Of n. We must famlllarize
the puhc with the sight and use OF coin before
they viii consent to surrender tire small notes 10
which they have heccme attached from their supe-
rOr convenience ami from TIE force ~ haDlt. Inc
people Of the Pacific STATES manifested great Tepug
nance to the notes of the tu Banks when first paid
and II required some .me before they couid be IN
tr0luced into general circulation. / coinciie with
yOu IN the opinion hat liver dollars VIII not obtain
general diffusion IN the channels OF circulation until
the forty odd millions Of one aud two dollar NOES
are wit1draWn. - cA ilt.cu il1scii dt me tAlld
session i'm some remarks on rhe Warner Silver biH,
and complained % Secretary sherman, "A few days
SiIrr. that he cad not followed up the views of Mr..
Knox i'm his last report with "A favorable recon-
mendatiOn Indeed, see no reason why the small
notes of the banks are not now Withdrawn as last
a. hcy are paid into the Treasury SuCh is the ndi-
rect spr, and intention 0i the Banking Ac, II not
SO provided IN express terms. And III order
to accumulate a store OF coin-goid as well
as sIvpr-fOr any financial emergency that
may arse. we must follow tie example and
practice OF other commercial IailOns maintaining
q coin bass. and prohht the circulation OF notes
under NlU. But IL VIII require liLts lallfhcf am
courage 90 accomplish these absolutely essential
results. n we would be prepared Tor an "UnlayoT-
able condition OF tine foreign cXchanges.'
/ cannot say that concur with you m the opinion
that silver cannot have permanent equiyaiency
with gold without the cooperation Of other com
msrcIal nations. That the advance of silver IN its
god price would be- greatly enhanced by the favor
able action of European Governments cannot be
questioned. but / am not sure that the advent Of
prosperity in China and the East indies would a0'
of Itself accomplish this desired result well on
account of It's value as prOdEctOn Of labor for
It's monetary Importance to the commerce of the
world We cannot. and ought not. 10 wait upon
the action OF other Governments. much as their CO.
operation II to be desired But have apprehen-
SION that present coinage OF silver land there
DO probability Of It's beng increased within the
next two or three years. will for several years
tend to drive our gold abroad, especially If We
are wise enough to make q place for the silver dol
lar IN the channels of circulation, which II has not
now. We are IN much greater peril and more I'M
mediate, from excessive Issue of bank notes than
from the coinage of silver In the last three months
bank paper has increased much more rapidly than
the silver dollar. and shall be most agreeaby sur
prised if this state of things does not continue unil
a financial explosion occurs. Paper initiation has
been the rock on which financial bark has
been wrecked IN the past. and there are
weli-grounded appTehensiOns that a similar
fate awaits Us IN the future under the
operation of free banking have lhe honor to be
OOur Obedent servant, "A. IL. BJcKNkR.