The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1885-07-20
THOSE TREASURY CERTIFICATES.
How They were Issued, and Why Their
Legality Was Questioned.
Washington Special.

Washington Special.
The circumstances which led to the recent con-
ference in New York with Treasurer Jordan and
other government officials, have not been fully
explained. 1t appears that in the course of last
month the United States Treasurer, on two sue
cessive days, used in the payment of clearing
house balances, at New York city, a peculiar
form of currency certificate 1t was of the ordic
nary form of currency or legal-tender certif-
cate except that there was added, after the
clause as to the payment in legal-tender notes,
the phrase 'or any lawful money" The additional
clause was stamped upon the usual form of cur
rency certificate in red ink Certificates in this
form amounting to $500, 900 were used on the first
day, and $400, 600 on the second. At this second
payment one of the bankers to whom the certi6-
Gates were offered refused to accept them and
consulted an attorney to ascertain whether cur
rencv certificates in such form were legal
tender and he could be required to take them
and whether there was any legal authority to
authorize their USE The attorney advised the
banker to refuse to accept this exceptional form
Of certificate. This led to general private dis
cussion of the situation among the New York
bankers, which resulted in tho conference Of
Monday afternoon.
AT that meeting this form Of certificate was
NASNUoSNNi
moving cause of the meeting Some OBJ
Jected to their use. Others thought it was
a convenient form of voucher upon which
gold could be loaned to the government and the
resolution which was adopted had direct refer
ence to its use in the phrase, Cor for such other
currency as the clearinghouse committee may
approve" But, in view of the action of the
banks as to the acceptance of silver in exchange
for gold and of the doubts which might be
raised as to the authority to issue the redletter
certificates it is not the purpose of the Treasury
to issue any more of them, even if it shall
be deemed expedient to borrow gold from the
banks. Should the Treasury borrow gold the
process will be to request the banks through the
clearing house to accept fractional silver, to be
divided pro rata among the banks which make
the loan.
The fact that the redetter certificates had
been issued was not generally known at the
Treasury until yesterday, and the report excited
much discussion The older officials were unan-
imously Of the opinion that there was no legal
authority for their issue, as they were form of
currency. 1t was claimed, on the other hand,
that as the United States Treasurer clearly has
the right to pay clearing house balances in what
ever form of money he pleases, he may also claim
the rightto give a promise to pay in any kind of
money which the bankers will receive. But
there is nowhere any claim that there is any ex-
press warrant of law for the use of these certh-
Gates The only question that may be raised is
whether there is any law which would prevent
their issue. This form Of certificate was pri-
vate arrangement between the hanks and the
Treasury. Some of the New York bankers, in
fact are said to have preferred them to fraction
al silver; but at the conference there were such
strong arguments presented against their use
that it was decided that the acceptance of frac-
tlonal silver as collateral, If it may be so called,
was to be preferred. There certainly could be
no doubt as to the legal status of the fractional
silver, while the question had already been
raised as to the right to issue the certificates.
The banks, if they lend gold to the Treasury,
do not contemplate removing the fractional
silver from the New York sub-treasury, but
would accept from the Sub-treasurer a receipt
for the amount of the minor coin which they
propose to receive. Under such an arrange
ment they could withdraw the amount needed,
and the certificate would always be redeemable
in legal tender, and would, therefore, be practi-
cally as good as the doubtful form of certificate
which was at first proposed, 1t is understood
that, prior to the meeting of the bankers, a
number of them were opposed not only to the
receipt of the proposed new form of certificate
but to the suggestion that they should lend
gold to the government The prevalent opinion
at the conference was that, if the banks should
refuse to agree to lend gold in case of necessity
the result might be financially disastrous and
consequently the resolutions were adopted.
The statement has been published in New
York that United States Treasurer Jordan mis-
represented at the conference the condition Of
the Treasury gold fund. This insnuation is
sented at the Treasury Department. 1t is adj
mitted that the Treasury statements show o
gradual increase Of the gold fund during June
from $ll4 000 900 to $11S 000 000 and there is an
apparent discrepancy between this and the
Treasurer's statement that the gold balances
were steadily declining, but during the same
period of this seeming gain of four millions, it is
explained that the legal tenders held by the
Treasury steadily declined from 500, 900, 600 to
3d. 900, 600. and that the effort was made to quiet
the alarm caused by the low point reached by
the gold fund early in June by turning into gold
as many as possible of the legal tenders In
this way the apparent gold balance increased
slowly, while the legal tender fund decreased
much more rapidly and the aggregate gold and
legal tender was decidedly lower at the end Of
June than at the commencement of that month,
and was steadily declining.
Treasurer Jordans position, asst was stated to
the New York bankers, In summary, IS SUBJ
stantially this: That the New York bankers
held the key to the situation that they can de-
termine the kind of currency which the govern
ment shall use in the payment of clearing house
give to the government in payment of du.
ties at the custom house. If the New
York banks choose to hoard their gold,
and to pay the customs dues in silver. the
government will be Obliged to pay its clearing
house balances in silver. If, on the other hand,
the banks will consent to pay a fair proportion
of customs dues in gold, the government can
meet it's obligations in gold. Should, however,
the banks continue to hoard gold, and pay sill
yer to the government, the government Will be
compelled to borrow gold, or to pay silver to the
banks.
Congressman Warner, of Ohio, the champion
of the silver dollar agitation called upon Treas
urer Jordan yesterday and informed him that the
House would not sustain his views of the silver
question.
Miss Clayalaud,s