Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1879-08-11
The \. IL. L. of Finance.

CAN RESUMPTION BE MAINT,INED?
The notes of the United States are as good
as gold can they be kept so? Those who
say that it will fail. With strange faith in
human folly, they ask men to believe that all
the ills which were to flow from resumption
are yet to come from its failure But what
is this which is to fail? Ii is the payment of
all notes that are offered for payment. As
long as that goes on, those notes which men
do not offer, but choose to hold will be as
good as gold. Thus far, few holders offer the
notes. and the means of the government grow
larger. Before payment can fail, there must
first be great change in the minds of men
as to the holding and use of the notes, and
next, a great exhaustion of the means which
the government holds. Before sensible men
believe that the Mississippi is going to run
drv. they must know some cause for the fail
ure of the rains and springs which have kept
it full enough to float many vessels. Silver
coins, and doubts about their effect. will be
spoken of hereafter, and it will be seen that
the Treasury has full power to avoid any dam
ger that can come from that quarter The
present question is simple: Can the Treas
note for which the holder may ask gold?
The Treasury is like \ lake in a deep val
ley, to which waters from a thousand springs
flow because they can 30 nowhere else. The
mines pour ont millions of gold each year
According to Wells, Fargo Co. who move
nearly all the gold that is produced, S37 ,612.-
$50 was the Weld of that metal in 1873
Less than 81 900 900 yearly finds use in the
arts and for ornament The loss and wear
are insignificant. because so little gold is in
daily handling. The Pacifr States and Ter
ritories have more than they can use; these
are ponds that are always full to the brim
Somewhere the gold must go to get used.
All that flows to the east must go Cd into
use as coin, or (2) into private boards, or (3)
into the banks, or o. into the Treasury. or
90 out of the country. The people of this
country will not use coin largely as long a.
they can get good notes. That has been the
National character for century, and il is not
changing and could change but slowly. Nor
do the people hoard much. That is another
fact of the National character and such traits
last long. The people are too practical to
hide many idle talents in a napkin Their
long familiarity with banks, savings-banks
and other places of deposit and loan has
formed fixed habits
The banks themselves will not take the risk
Ss
moving specie, 50 long as they can keep in
place of it notes on which the gold can be
drawn at will This has been proved this
year, to the surprise of many who had ex-
rected great drain of gold from the Treas
ury by the banks But they have put their
gold into the Treasury, and taken out large
notes instead. Under the law they can use
the notes in place of gold can pay their own
notes with United States notes; and can re-
fuse, the banks in the chief cities do, to
keep special accounts to be paid in coin only
All who want gold can get it from the Gov
eminent. and the banks save themselves the
risk and cost of keeping il bv making the
Treasury their storehouse.
SO long as exports of goods greatly exceed
imports, gold does not go abroad. The goods
sold by us more than pay for the goods bought
by us, so that, if gold goes either way it must
come to US in payment. The excess of goods
sold was S26i $50, COZ during the year lust
closed which far exceeds any sum due for in
tcrest for freights, or spent abroad by trav-
eIlers. Interest due abroad on the public
debt has been cut down to less than $40 ,O0O,-
600 yearly; interest on the other debt has
been greatly reduced, and larger amount of
foreign capital is invested here each year
when the people pay their debts and the land
prospers. We sell more than we buy abroad
because the cost of raising wheat aud corn,
cotton and tobacco, and of producing cattle
provisions and petroleum. is lower here than
in other countries. A change in the relative
cost of producing such staples in different
countries cannot be quickly made; so great
change as to overcome the vast excess of ex-
ports can hardly occur for many years
Gold has no other outlet, then, and runs in
to the Treasury just as water from rains and
springs gathers in a closed lake. There is
no other place IN the country where it can be
kept in large amount, without cost or risk to
the owner and yet be used by him at will in
the form of notes. He who holds note
owns part of the reserve in the Treasury; can
use it any day at will and yet has no risk in
guarding or hiding it. Hence great number
of such notes will at all times be used so long
as the law permits, and would be used if the
notes were not legal-tender. People need
them, and would pass them and take them.
just as they need and use receipts for wheat
in n warehouse. There is no reason to be-
lieve that any smaller amount of notes would
now be wanted if they were not legal tender
nor Is there any reason to believe that
the amount needed and kept in use will grow
smaller as long as the Treasury keeps faith
with the people.
The means of the Treasury for paving notes
offered have increased in the six months since
resumption began. and still increase. 1t had