Year: 1869




The impression gains ground every
DAY, in Wall street, that at compara-
lively early day, the Supreme Court will
declare the legal tender act unconstltu-
tionai. We huu IL diIiicull 10 Judge now
lar the expectation Is Uaseu upon ade-
quate authority and discover lIllle to
countenance it beyond a well authenti-
Gated statement that u gentleman very
closely connected with Mi. Chase, III
the original framing OF the act, has de-
clared his belief that such decision
will ultimately be rendered. As, how
ever, the impression has 50 lar taken
mold of the mind of Wall street as To
have become really serious element, III
calculations extending into the future,
it seems desirable To inquire into some
of the bearings of such a decison.


We take it Tor granted that, in view
of the Important relation OF such a de-
eision to the public finances, the Court,
before announcing its conclusions, would
acquaint the Government with its puf-
pose, so as to afford due oporLunlty Tor
the Secretary of the Treasury making
suitable recommendations to Congress.
And under such an exigency it seems
inevitable that Congress should author
ize the experiment of resuming specie
payments; for otherwise, Congress
would drive the treasury and the country
to the use Of q currency not only de-
preclated, but also, according TO the
highest tribunal of the lanL, unauthOr-
lied. Whatever misgivings, therefore,
might be entertained, 10y some, as TO the
success OF the experiment, the trial would
seem to be unavoidable.


What would be the prospect of success,
in the event of the Government declar-
ing its readiness 10 make payments in
specie or its equivalent upon all oblIga-
tiOns, ,greenbaeks included? Much woLld
depend upon The action of the hanks,
and especially those of New York
They would then be required to conduct
their business upon specie basis, all
their debts being payable in coin or its
representatives, and all obligations due
to them being payable in the same form.
The banks would be holding say S2O,-
000, 900 of United States nOles, which
they could present at the Sub-Treasury
for instant payment. Were they to take
that course, the general public would
follow their example, and greenbacks
would come ruSning in from all quarters
for redemption, causing general alarm
and possibly going on to the extent of
draining the Treasury OF gold. The
banks, by this means, might succeed in
securing large amount OF gold as the
basis of their operations but it would
be at the risk OF compelling the Govern
ment to suspend upon its demand OBJ
legations, and thereby rendering green
backs unavailable as currency. But, on
the other hand, the Government would
have it in its power to take back and
hoard the gold thus taken out of its
vaults, through the medium of its GUS
toms receipts-a TACT that would make
the banks rs much dependent upon the
consideration of the Government, as
the Government would be dependent
upon the fOrbcarance and corporation
of the banks.


Would the banks be disposed to take
a course SO inimical to the return TO a
sound monetary basis, to the good credit
of the Government and to the safety of
their owIfibasis sOfoperations? We think
not. On the contrary, there is the strong
est probability that alike upon grounds
of patriotism and of sound financial pol
icy, the banks would unanimously re-
solve, upon the Government resuming
gold payments, to send in no greenbacks
for redemption but rather to hold them,
first as representing 50 much gold In the
Treasury at their instant command, and
next as far more convenient for hand
ling than coin, intending, perhaps, sub
sequently to increase somewhat their
gold reserve. In the event of the banks
taking this course, the general public
would take confidence, and the demand
upon the Treasury for the redemption
of greenbacks would be confined to a
few small holders more timoIOus than
sagacious, who, finding that their gold
WaS worth no moro than urpanhackS
and much less convenient, would soon
become ashamed of having done the lit
tie within their power to drive the Gov
ernment into perpetual SUSPENSION.


We anticipate, then, that in the event
of the Government resuming specie pay
meDts, as the sequel ofsuch decision
of the Supreme Court as runIor predicts.
the banks would continue to bank upon
United States notes, taking them into
the Treasury for reduction when they
speedily needed gold, and holding them
when they did not; that they would ac-
cept them in payments and tender them
in payments, accommodating captious
objectors to such tender with gold.-
Under such course of affairs resump-
ton need be attended with no banking
arrangements.


In some quarters there is "a loud outcry
against the injury that would result to
the "debtor class" who, it is said, would
have to pay in gold, or its equivalent,
debts contracted in dep. eciated cur
rency. There is unquestiOnably, an in
justice in this; the inevitable counter
part of that incurred upon suspension
and one which cannot be avoided. But,
il must be remembered that as rule
banks, bankers, merchants, traders, and
indeed all classes, have obligations ow-
ing to them to about the same extent as
they are owing to others so that their
receipts in gold currency would pro-
vide for their payments in gold cur
rency. That there could be no extensive
injury to the exceptional few who owe
more than they have due to them is to
be inferred from the fact that, when the
Government suspended payments in
specie, and the creditor class had to re-
ceive deprecated currency in settle
ment of contracts made on the gold ba
sis, there were no failures, and no indi-
cations of serious suffering; indeed, it
was a rule, through all the wide fiuctua-
tions in the value of the currency during
the war, that there was no visible result
ing injury to either one class or another.
For these, among many reasons which
might be assigned, we are not disposed
to regard decision adverse to the con-
of the Legal Tender act as
likely to involve any general financial
confusion or any serious injury to busi-
ness interests on the contrary, we should
: lew it as the introduction of an era of
solid prosperity.


Tnead.u,s Eparftnna