New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1879-08-05
THE A B c OF FINANCE.
CAN RESUMPTION BE MAINTAINEDi

fail With strange faith in human folly they ask
men to believe that all the ills which were to how
from resumption are vet to come from its failure.
But what is this which Is to fail Ii Is the payment
Of al notes that are offered for payment As long
as that goes on those notes which men do not offer,
but choose 20 hold viii be rs good as gold. mus
far few holders offer the notes. and the means OF the
Government grow larger Before payment can falI'
there must first be a great change in the mlnds OF
men as 10 the holding and use OF tue notes.
and next. a great exhaustion Of the means which
the Government holds. Before sensible men believe
that the Mississippi is going to dry, they must
know some cause for the failure 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 viii be
seen that the Treasury has full power TO avoid any
danger that can come from that quarter. The pres
ent question is simple: Can the Treasury continue
70 get gold enough TO pay every note for which the
holder may ask gold
The treasury is like a lake in a deep valley. TO
which waters from a thousand springs dow because
they can 90 nowhere else. The mines pour out
millions of cold each year. According TO Wells,
Fargo q Coz who move nearly all the gold that Is
p-aduced S37. 672 $50 was the yield Of that metal
in 1873 Less than 81 OO0 900 yearly finds use j n
the arts and for ornament The loss and wear are
insignificant because so little gold Is in daily hand
ling. The Pacific states and the Territories have
more than they can use these are ponds that
are ALWAYS full to the brlm. Somewhere
The gold must go 10 get used. All that
flows to the east must go o. into use as
coin, or % into private boards, or l3 into the
banks. or a. into the Treasury, or l5l out OF the
country The people Of this country will not use
coin LARGELY so long as they can get good notes.
That has been the National character for century,
Il.
and 1t 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 tai
ents in a napkin. Their long familiarity with
banks, slvings- banks and other places of deposit
aud loan has formed fixed habits.
The banks themselves will not take the risk Of
holding. and the cost Of guarding and moving
specie so long as they can keep 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 expected great drain of gold from the treas
urv BY the banks. But they have put their gold
into the Treasury, and taken out large notes IN
stead. Under the law they can the notes IN
place of eold can pay their own notes with United
States notes and can refuse, as the banks IN the
chief cities do to keep special accounts to be paid
IN com only All who want gold can get 1t from
the Government and the banks save themselves the
their stOre-hOuse.
So long as exports Of goods greatly exceed I'M
ports gold does not 90 abroad The goods sold by US
more than paw for the goods bought by us, so that
If gold goes either way it must come to rs in pay
ment. The excess Of goods sold was S26f,G36G02
during the year just closed, which far exceeds any
sum due for interest for freights or spent abroad
by travellers. Interest due abroad on the public
debt has been cut down to less than o10,OOOOOO
yearly; interest on the other debt has been greatly
reduced and a 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 buv abroad because the cost of raising wheat and
corn cotton and tobacco, and OF producing CATTLE
provisions and petroleum, Is lower here than IN
other countries. 4 change in the relative cost of
producing such staples in different countries cannot
be quickly made so great a change as to overcome
the vast excess Of exports hardly occur for
many years.
Gold has no other outlet, then, and runs into the
Treasury Just as water from rains and springs
gathers in a closed lake. There is no other place
in the country whereit 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
se 10 any day at will and vet has risk IN guard
ing or hiding IT, Hence a 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-render People need them. and would pass
them and take them, just as they need and use re-
celpts for wheat in warehouse. There Is no rea-
son 70 believe that anv smaller amount Of notes
would now be wanted if they not legal-tender,
nor is there any reason to believe that TIE 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 paying notes offered
have increased m the six months since resumption
began and still increase It had then, and has now.
larger ratio Of cash in hand to notes afoat than
the Bank Of ENGLAND deems perfectly safe In
strictest theory the cash balance available July
was S14s,473, 563 % in reality 1t was much
larger. This, to protect S3466s1,0 ole in notes, Of
which about 81 100 900 were then In the Treas
ury. not represented by outstanding certificates.
Moreover the banks are obliged to keep on hand
about one-tbird Of the United States notes re-
naming as their reserve. unless they hold
gold which they choose not 10 do. Nir-
tuailv. the Treasury has a growing stock of
over 81 so 900 900 in specie TO protect about 5000.
COO 600 in notes not now in the Treasury re-
ouired by the banks But if at any time il should
need more gold. it has power in the Resumption Act
10 borrow any needed sum. The actual sale of more
than 5000 600 900 of four per cent bonds within the
single month Of April proves that il borrow, #
need should ARISE gold enough to pay everYnote re-
naming. But as long it keeps faith. it viii have
no cause to borrow.
The people viii not fail TO paw their notes unless
they are false to themselves. If party hostile 20
the public faith should gain control, there would
be fear. Holders might then want gold in place of
notes The danger would come, not in naked
proposal to repudiate, but in some scheme to stop
redemption Of notes, to cut down revenues below
the necessities Of the Government so that its cash
should be exhausted, 70 make such change in
the state of foreign trade that imports should ex-