Year: 1879

the decision Of the Supreme Court is made. for IL
that should be adverse to the legal tender clause
serious embarrassments might be created.
which Congress in law repeating thai
clause could provide against. did not feel at
liberty as public officer to consider the bearings
Of the political question. What had to do in the
report was to express my opinions. leaving Con-
gress to determine when. IL ever, they should be
acted upon favorably.


ConnEspoxDEsr-wha in your opinion. would be
the effect of the repeal of the legal tender clauseg


sEcRErARY-I think it would be beneficial to all
branches Of business. The notes would circulate as
now and would be gladly received in preference to
gold or silver. Many people who might hesitate to
invest great enterprises requiring long Credits
fear the standard Of payment would be deprecated,
would delay no longer


HOW THE NEW SYSTEM MIGHT WORK.


CoRnEsPoNDENr-Youd do not believe that any harm
could come to any legitimate interest in rhe country
by the repeal Of the legal tender clause? .o


SEcRErARY-None at all. with the provisions as to
contracts which Congress would naturally add to the
repeating clause. and which have suggested in my
report. The banks. heretofore under existing
law would redeem their circulating notes in United
States notes. all existing contracts would be en-
forced United States notes contracts hereafter
made would. in practical effect, be paid as now in
United States notes. stipulation to pay
either gold or silver or lawful money would
be enforced by tho courts wo would then
have sound financial system based upon coin.
but so arranged that the amount Of coin In the
country would be utilized to the utmost extent Of
safety As I said to you. national bank system
pure and simple could not do this because the coin
reserve would be distributed among two thousand
banks and instead OF great reservoir accessible to
all would have only - great number of little
ponds. On the other hand circulation Of treasury
notes alone would hamper Industrial enterprise by
lack of tho elasticity which free
banking system judiciously and safely secures
Combine tho two as have suggested and
you have stability. elasticity and safety united,
and the possibility of unsafe imitation is pre-
vented by the fact that Treasury notes being no
longer o legal tender. there can be no imitation Of
them. because. whom redundant they would flow in
for redemption in coin. Tho limit OF $500 900 900
fixed by the Resumption act consider to be per-
fectly safo. But If the present amount should be
retained it would be maintained at par with the
present reserve. II more currency is needed the
banks can supply it. If the amount too great it
will be presented for redemption. There can be no
undue contraction Of the currency under the system
have suggested N ~


ConnEspoNDENr-Do you think your policy will
be adopted by this Coneressa 4a e,


sEcRRrARY-I cannot tell; but hope So Whether
1t receives the favor of this Congress or not have
done my duty in recommending 1t. have hope that
the republican party. which has always been the
supporter of sound currency. will give it's sup
port to this policy. More than this do not care to
say to you now except to express the belief that If
not in Congress now, then within short time not
only the republicans. but all wise and well meaning
democrets will stand in favor Of the repeal Of the
legal tender clause. especially in time of peace, Of
surplus revenue and OF great plenty. A~
WHAT THE PEOPLE PREFER.


Here the conversation ended. 1t will be seen that
the Secretary has in mind definite financial system
which he believes to have more Of the clements Of
stability and to offer greater safeguards against in
fation the one hand and against sudden crises
and financial panics on the other than system
based entirely either Treasury notes. as many
democrats desire, or on national bank notes, as
many republicans prefer. He believes that the
stock OF coin of tho country can be better MAIN
in the Treasury than in the vaults nu.
merous and scattered banks. But at tho bottom of
his thoughts probably Ne s<rSsiief thxt the people
of this country have become thoroughly sccus-
toned to the Of paper money. that they
prefer It, and will continue to prefer it to coin az
more convenient in every way. and that 1t is the
duty Of statesmen therefore. not to combat this
preference. but to accept the fact and make it their
particular cafe surround paper currency with
such safeguards will make it always at once re-
deemable in coin on demand. This. Mr.. Sherman
plainly thinks be done most effectively by the
government holding the coin Of the country in o
great reservoir he and it will be observed
that in his report he regards the power under tho
Resumption act to sell bonds for to be an i'm
portant force In this direction be used
t1n
or to check drain. securitythat paper money
shall always be redce mable in coin on demand is Of
course. OF the first importance. and that Mr. Sher-
mans plan amply provides.


COIN FOUNDATION SHOULD RE SECURED


The we;sk spot in the plan would seem to be that
SO long as tho government issues any part OF tho
paper money Of the country. so long demagogues.
ignoramuses and spectators likely to move Con-
gross to increase or diminish, for moro or less
plausible reasons, volume of the treasury notes.
The Secretary believes that with the repeal of the
legal tender clause such agitation would cease
because when treasury notes longer legal
tender for private debts increase in their volume
would only cause them to be sent homo for redemp-
tion. and that the public. knowing this. would not
be made uneasy ut any movements In Congress.
But, whatever faults may be found with MIR.
Sherman's plan. the Important matter is that
it is based the repeal OF the legal
tender clause and In this at least all the supporters
of q sound and constitutional currency-Senator
Bayard and Senator Hampton. Senator Morrill, and
General Hawley--can stand together. whether they
agree further net The abrogation Of legal tender
will at set natural laws in operation In tho
financial system Of the country. 1t will save from
another and wilder imitation. 1t will disarm the
grecnbackers. and leave tho country and Congress at
liberty to discuss tho finances honest basis.
with the certainty that whatever system shall pre-
vail, whether that which tho Secretary thinks tho
safest other. it will have in any case q coin
foundation.


FROM OUR REGULAR CORRESPONDENT.