The daily gazette., 1880-01-09
-1n Amendment to Mr.. Bau-
ards BiU Proposed by Mr..
Pen,IIetO7l
PennLetO1.
Special to the World.

Special TO the World.
WASHINGTON, January 7.-Mr. Pen
dletOn to-day revived the interest in the
legal-.ender question by introducing in
the Senate, as ali amendment to Mr..
Bayard's resolution, the following
"And said notes shall not be available
for any of the reserves required to be
kept by the national banks, and all such
reserves shall be kept in COIN" Inas-
much as Mr.. Pendleton's probable atti-
tude towards the Bayard resolution has
been a subject of much discussion his
action to-day has taken the proportions
almost of an event. By some il is re-
earded as showing that Mr. Pendleton
has signitied his approval of the Bayard
resolution, while others construct is
not easy TO see why-the amendment as
blow at the national banks savoring of
contraction, and designed to emharrass
the resolution which Mr.. Bayard is
struggling to get through the Senate.
Both Of these interpreta ions are wrong.
Mr.. PendletOn did not intend TO commit
himself on the Bayard resolution. He
believes, however, that if that resolution
is TO be passed this amendment should
follow it naturally and logically. Under
the present Banking law, which would
not be CHANGED by the passage of Mr..
Bayard's resolution, the national banks
are permitted to keep United States
notes as part of their reserve fund.
The theory npon which Mr.. Pendleton's
amendment is offered is that as the re-
serve fund is designed for the redemp-
ton Of the national bank notes it ought
TO consist of lawful money, with legal
tender debL-paying quality. He
| holds that there is nothing in the Bayard
resolution TO prevent national bank
from redeeming its notes in United
States notes even after the latter are de-
prived of their legal-tender quality, and
that this would violate the spirit of the
existing law which contemplates re-
demption in notes Of a legal-tender
debt-paying quality.
The main argument offered in favor of
Mr.. PendletoE's amendment to-day is
that it simply adapts the law regarding
the bank reserves to the changed condi-
tion of things that would exist after the
passage of the Bay ard resolution, and
that II would not interfere with the ma
tional banks in any respect except to
compel them to exchange the United
States notes which they now hold in re-
serve for coin; so that, instead OF being
a contraction OF the currency 1t would
put into circulation all the United
States notes now held in reserve, and
give the banks in place of those notes
coin that is not now in general circula-
ton. In this way the silver that is con.
stantly beiag coined and lying idle in
the Treasury vaults would be drawn
out by the bank. The limited amount
Of gold and silver in the country wonld
check, it is said, any extreme initiation
OF the currency by the establishment OF
new national banks or the increase OF
the circulation of those now in exist
ence. As separate measure Mr.. PEN
dleton would not have proposed this
amendment. He intends 1t only as a
couplet with the resolution of Mr.. Bay.
ard, and with tina. in view he caused lis
reference TO the Finance Committee, by
whom it will be considered in connec-
ton with the resolution at next Tues.
day meeting. 1t is understood that Mr..
Bayard, while he might not oppose the
spirit of this or other amendments,
nevertheless does not favor any altera-
tion or modification of the resolution.
believing that it should be passed upon
its own merits free from amendment
and that afterwards whatever else NAV
be meritorious in the same line should
he submitted to the same Test.