Year: 1878

| passed over the Presidents veto the HERALD


ceased to denounce it and determined to


treat it with the respect due to law of the


land which is not likely to be repealed


until practical experience of its i'll effects
opinion. We said again and again, all
through the protractcd debate in the SEN
ate, that the immediate effects of the
amended bill would be harmless, and that
| it was only its remote effects we dreaded,


except in single particular. We did
fear that il would work immediate
injury to the national credit; but in
other respects we thought quite period
must elapse before it could cause any prac-
| tical mischief The reasons for this opin-
| ion, which we kept stating in advance, still
seem to us valid. Silver cannot initiate the
currency until silver shall have been
coined. Inasmuch as legal tender notes
are not receivable for customs duties will
continue to be collected in gold until there
is silver coin for that use. Meanwhile silver
coin will be very nearly at par with gold
coin, Notwithstanding the difference in the
value Of the bullion of which the two kinds
of coin are composed. In the ten remain
ing months of the present year it is not
possible that more than forty million silver
dollars can be turned out from the mints,
and if we resume specie payments on the
1st of January, according to law, there will
be sufficient contraction of greenbacks to
bring them to par. The silver coin which
:,,t., o,~ in, o1o nc ,ofi irod
greenbacks will be at par with the outstand-
ing legal tender notes. If paper currency
of no intrinsic value can be brought to par
by diminution Of its quantity, silver
money, which has intrinsic value, can easily
be maintained at par by limiting the guam
tity in circulation. as is done in France and
the other States of the Latin Union. We
have, therefore, never feared the immediate
effect of the Silver bill, except on
the public credit. We did not expect fall
in the price of our bonds, for reasons which
we stated in detail more than month ago.


We did not expect any material change in
the price Of gold, for the premium on gold
merely expresses the relation of gold to
legal tender notes, and unless the Resump-
ton law is repealed the value of the legal
tender notes tends to increase and to reach
par before the close Of the year. We are
not surprised, therefore, at the London
quotations Of our bonds yesterday nor at
the gold quotations in our own market.


1t is in the power of the administration,
as we have all along maintained, to post
pone the evil consequences Of the amended
Silver bill for at least two years, with the
exception that its passage ends all hope of
refunding the public debt at four per cent
and compels the government to pay six per
cent on large portion of its bonds for a
long period to come. The refunding Of the
national debt is effectually arrested, but in
most other respects the President and Sec
retary of the Treasury retain pretty COM
plete control of the currency for the
present. Besides the amendments en-
grated on the Bland bill in the Sem
ate, amendments which we have never un-
dervalued, we think it one of the best Of
the relieving features of the bill that it
allows the Secretary of the Treasury so wide
discretion in its administration. 1t imposes
upon him no restraint and gives him no
directions as to what he shall do with the
silver dollars when they are coined. Ulti-
mately he will be obliged to use them for
all the purposes for which gold and green
backs are now employed; but for the first
year or two he can pay them out in large or
small quantities as he may think expedi-
ent. The perfect liberty which the law
allows him would be of no avail were it not
for the large gold reserve in the Treasury,
which he is also free to use according to his
own discretion. He could sell it for green
backs and use them for current expenses,
and pay out no silver at all until
the gold reserve is exhausted /; which
would be equivalent to exchanging
the gold reserve for silver re-
serve OF course he will not do this,
but the fact that he has legal power to do it
shows how complete is his command of the
immediate situation. On the other hand,
he might, if he chose, pay out all the silver
as fast as it is coined, and pay it out in the
seaboard cities, where it would ut once find
its way into the hands of the importing
merchants, and very soon prevent the pay
ment of any more gold for customs. Secre-
tary Sherman is as little likely to go to this
extreme as to the other, but the fact that he
possesses so wide discretion shows that
if he should err on one side or the other he
could apply an immediate remedy. We
suppose he will set out with some definite
policy, but it will probably be n
tentative and flexible policy, and
if in watching its operation he finds that it
is producing too much contraction or too
much expansion he will apply the check
which will always be in his hands.


1t is understood to be the purpose of the
Secretary of the Treasury to put the new
silver dollars in circulation as fast as they
come from the mints, and as he will doubtless