New Ulm weekly review. [volume] (New Ulm, Minn.) 1878-1892, 1879-12-10
The total annual reduction Of interest unoe,

The total annual reduction Of interest under
these reminding operations since March, 1877,
has been Sl4,N,l17, while the saving on this
present year alone, is nearly nine millions
tSS,S(H. iO1, and the total annual saving in all
the refunding operations of the Government
since 1871 is nearly tw enty millions ($ ,6UT)
The refunding of the National debt COM
menced in 1871, ut which time the National
banks held nearly four hundred millions of
the tive and six per cent bonds, and from that
date to the present time they have held nor
than One-fifth of the Understanding debt OF
the United States. A large portion of the
bonds held by them in 1871 bore interest Mt the
rate of six per cent. This class Of bonds has
since been greatly reduced, and is now less
than one-sixth of all the bonds pledged for cir
whole amount consists of bonds bearing inter-
est ut four per cent.
The Government has still outstanding $er3.
csnss ali Of which 1ha Wi ina
ture in 1881. The refunding Of these bonds
into four per cents will save $40, 4.3,G O) in in
ment is now. such that it is not Improbable
that long before its maturity the present debt
may be refunded into three and a half per
cent ponds which ~ is onehaf per cent
Ing to the Government large additional
amount of interest.
The act Of Jan. IA, 1875, required the secre-
tary of the Treasury. to redeem "in coin the
United States legaitender notes then out
standing, on their presentation for redemp-
ton at the office OF the Assistant Treasurer
York, In sums of not less than fifty dollars
on and after Jan. l, 1879. At the time of the
passage Of this. act the leading industries
and general business of the country were very
much depressed. The agricultural classes
were largely in debt, and the failures of mer-
camille establishments and manufacturing
resented more than $500, 1000 During, the
succeeding years an era of economy super.
vened, agricultural products greatly increased,
and the balance of trade was turned largely in
our favor, the excess Of exports over imports
for the fiscal year 1876 being more than sew
enty-nine millions, In 1877 more than one hum
dred and ffty-one millions, in 1878 exceeding
the year ending September 30 last more than
two hundred and ninety-four millions. For
1878 the excess was, it will be seen. more than
than two-thirds greater than that of 1877.
The Resumption act not only fixed the day
OF resumption, but authorized the Secretary.
in order to prepare and provide therefor, to
propriated, and to issue. sell and dispose Of, ut
not less than par In coin. any Of the bonds OF
the United States described in the act of July
II, 1870 Under this act, the Secretary in 1877
sold ut par in coin SIS COO Of four and halfs
and COO Of fOurs, ana in April, 1879, So
100000 Of four and half per cents at a PFC
MUM Of one and a half per cent. The coin in
the Treasury continually increased, so that on
the day of resumption the Secretary held one
hundred and thirty-five millions t$l35,3s 65y
Of gold coin and bullion. and, in addition, over
thirty millions $50 557, $3.50 in silver coin, the
gold coin alone being equal to more than forty
per cent of the United States notes then out
standing.
The banks Of the country at the date of re-
sumption held more than one-third Of the out
standing Treasury notes; but they had SO
much confidence in the ability of the Secretary
to maintain resumption that none were pre-
sented by them for redemption. The people
also, who held more than three hundred mill
ions of the issues Of the National banks,
which issues were based upon the bonds of the
Nation, preferred such notes to coin itself.
There was, therefore, no demand for payment
of the notes OF the Government, and the gold
hundred and thirty-fvc millions on the day of
resumption, increased more than thirty-six
millions in the next ten months, the amount
held on the first of November, 1879. exceeding
one hundred and scventy-one millions.
During the last fifteen years gold coin has
been used by the banks in comparatively
small amounts as reserve, and by the people
the purchase of foreign exchange. II it was
used for other home purposes, it was first con-
vertcd into paper money; but since the dayof
tonal-bank note have been generally prefer
red in business transactions to coin itself.
The amount OF coin and currency In actual
circulation at the present time is believed to
be not greatly in excess of the average amount
during the five preceding years.
It Is manifest that at no time since tho date
OF suspension SO large an amount OF currency
has been needed for the legitimate purposes
OF business as during the present year. The
harvests have been unprecedentcdly large,
while the value of agricultural products, Ow-
consequent demand for our products abroad,
has greatly increased. There has also been
continual rise in wages, in the value of manu-
featured goods, in provisions, and in the price
OF iron and other commodities.
If this statement Is correct, It will explain
the scarcity Of currency in the City of New
York during the last two months, and the con-
scquent demand for additional issues, the
amount of NatiOnalbank notes issued during
September and October being nearly six and
one-half millions, which is nearly equal to the
amount issued for the whole ten months pre-
ceding. 1t will also explain why the banks in
New York have grudgingly presented for pay
ment their legal-tender certificates, and been
Obliged to designate one of their number as a
depository for gold, upon which Clearing
House certificates are issued and used in set
ting their exchanges.
Notwithstanding the large increase of specie
in the country during the past year, the
amount held by the banks has by no means III
creased in proportion. The amount held on
Oct. l, 1873 was 81 ,6ss, 6O6; on the LIST day Of
January, 1879, $4l 499,757; and on the I'd of
October last, $42, l.3 132-showing an increase
on that day of less than seven hundred thou
sand dollars since resumption-day. The more
banks in the City Of New York to the Clearing
House, for the week ending November Is,
show further increase of $2l ,239,4OO. The
HLlOuuC u CdSH TcScFSC now required be
held by all of the banks is less than ninety-four
millions. s... =
The banks outside Of the large cities held
on October 2, $l1 ,474,9N of specie, which
nearly equals three-fourths of the full amount
of cash reserve which they are required to
hold, while the banks in New York and in
the other principal cities held in specie con.
siderably less than one-haf of their legal
cash reserve. es.
The addition of coin to the circu' alton
should have the effect to reduce the amount
of paper money, If in excess Of the wants Of
business, and send homeward for redemption
notes. If the lexa]-tender notes accumu-
late in the Treasury, they cannot again
be issued, except upon acquisitions of the
Government; and the accumulation of such
notes has q tendency to induce extravagant
appropriations and expenditures by Congress.
The law, as it now stands, requires that the
Secretary shall keep in circulation the legal
tender notes, which is not practicable, and
their accumulation by him will lead to con-
among the people, which discussions will en-
courage speculation, and disturb the current
OF legitimate business. With the influx of
specie it is important that such paper cur
rency shall be in circulation as can easily be
retired, if in excess. A currency is needed
which will act automatically, and as reg,l-
latOr, like the governor in machinery, or the
balance wheel in the chronometer. The best
currency is that one which will most readily
adapt itself to the needs of business, and its
relative cost should not be taken into consid-
Grafton; for the best money is always tue
cheapest in the end.
Commissioner Ranmsa Animal Ran..yA