New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1882-02-06
RESERVE FUND AND GOLD CERTIFICATES

tBY TELEGRAPH TO TIE TRIBUNE.l
WASHINGTON, Feb. 5.-Scrator AllisOn's bill TO
provide d reserve fund for the redemption OF United
States notes Is attracting the attention of fnanciers
III Congress- offering at least partial solution OF
the problem which must soon be solved in regard to
the retirement Of National bank circulation.
The National banks own $241 100000 of the
"Windoms" which are held as the security for cir
culation. Within seven or eight years. at the
farthcst II is to be expected that these bonds Will
be redeemed. aud the banks will be forced to re-
place them with 4l2 or per cent bonds II
they continue to maintain their present volume oil
circulation. The former become redeemable
il 1891, only nine years hence; and thus
do not offer much advantage over the
"Windoms' for the purposes of the banks
The Is are largely held by trust and insurance
companies and other institutions OF a similar char
actor and will he difficult to obtain by the time the
banks will require them. Under these circumstances
il is to be expected that many of the banks will
prefer to retire portion of their circulation rather
than pay the premium upon the high rate bonds
and that a gradual, though slow contraction of the
currency viii begin to take place within the next
two or three years from this cause.
Mr.. AiisonS pan is based upon the theory that
there is gold enough III the country, and Will con-
tinue to be- to fill the could it be given that
propertv of transportabIlity possessed alone by
papcr money. He. therefore, proposes TO authorize
anv holder OF gold to deposit in the Treasury and
receive therefor gold certificates i'll denominations
Of not less than $50 each, the gold being
held .1r the redemption Of the certificates being
available for that purpose only.
But here difficulty presents itself. Once before
cold certiG Gates were issued under SIMILAR terms
aud it vas found that in order to get them the
holders of greenbacks presented them in large
i,av ~ al 1ruN
cold from the resumption fund, tn rned about de-
posted the gold and drew gold certificates In this
way preenbacks were convertible into gold GER
tidcatcs while the resumption fund was rapidly
depleted and would have been speedily exhausted
had not Secretary Sherman put stop TO the further
issuance Of gold certificates. To make this impossi-
Die Of recurrence MIR. Allsons bill provides that
\ maximum reserve fund of not less than
Sl2O 600 600 shall be set apart in the Treasury for
the sole purpose Of redeeming United States notes,
the entire fund he in coin of standard value and
whenever this fund gets below $120,000,000 it
shall be unlawful to Issue any more gold or silver
certificates until the deficit is restored.
This feature Of the bill might at first glance, as
well as from the title of the bill itself be thought
10 have some resemblance TO the Plumb amendment
10 the sherman Refunding bill but il has none 1t
establishes maximum sum which shall be set apart
forresumpion purposes, but II does not require the
Secretary to cxpend the III the redemption OF
bonds nor does il prohibit The retention OF as much
money aside from the resumption fund, as the Sec
Ictary in his judgment may think proper 1t
does not decide this question one way or the other,
but leaves il in abeyance be settled by the Sec
rotary or by Congress in other ways.
1t is provided that three-fourths of the resump-
ticn fund shall consist of gold com, the remainder
20 lie Of standard silver dollars. This provision is
intended as an additional safeguard TO resumption
IL Is to be expected that greenbacks viii continue
10 be redeemed IN gold, but if the combination"
10 defeat resumption. which some financieTs have
60 often alluded to as among the probabilities
should ever take place, it Will be IN the power of
the Secretary TO put out few cart-lOads of silver
III exchange for greenbacks leaving his gold re-
serve untouched
Ii was developed IN the recent discussions i'll the
Senate, TO the apparent surprise of many Senator'S
that the Treasury held specific resumption fund.
aud that the amount held for the purpose OF secur-
ing the greenbacks was largely discretionary with
The Secretary Of the Treasury. Several of the
soundest hnanciers of the Senate expressed the