Year: 1875

/ Tue great IeaLure oil THIS eXcelieuI uOcu-
ment is its clear discussion Of the question of
specie payments and its judicious recon-
mendations relating to that subject Wewill
begin at once with the most important thing
in this important part of the report-that is
l to say, the recommendations Assuming
that the act of last winter, requiring resump-
tion on the 1st of January, 1879, is pledge
which binds the faith of the government,
two questions arise-frst, whether the
means and machinery provided by that act
are sufficient; and if they are not,
a second question is presented as to
what means would prove adequate. Mr.
Bristow considers the provision for resump-
ton authorized by the act of last winter as
entirely insufficient to accomplish the pur-
pose. In point of fact, it provides no re-
sources whatever beyond the sale of bonds
to accumulate stock of gold in the Treasury,
and it restricts such sales to the par value
of the bonds in gold. Now it is quite GER
tain that without a change in the market
value of bonds this provision is nugatory.
The five per cent bonds which the Secretary
was authorized to use are barely at par, and
they have all been disposed of The four per
cent and the four and half per cent bonds
which alone remain to be employed for this
purpose, cannot be sold at par in gold, and
there is no likelihood that they will rise
to par before the date fixed for re-
sumption. Now as no other means have
been provided by Congress, and as this re
source is not available by reason of the pro-
hibition to sell the bonds for less than their
par value in gold, the legislation of last
winter is utterly worthless unless reinforced
| by new and more efficient measures 1t re-
| quires the Secretary of the Treasury to re-
deem the legal tender notes, on and after
January l, 1879, without providing any means
that can be called into use for that pur-
pose.


| This is the actual situation which Secre-
tary Bristow asks Congress to face, and the
suggestions which he offers for their guidance
go so directly to the pith of the matter, and
evince so much financial wisdom, as to deserve
the most respectful consideration One OF
Secretary Bristow's recommendations, and
the most important of them all, is the pas
sage by Congress of an act authorizing him to
fund the outstanding greenbacks in four per
cent bonds. This method would work,
whereas the sale of four per cent bonds at
par to accumulate stock of gold will not
work. and the law authorizing it is dead
letter. With a premium of fourteen per
cent on gold (this was about the rate yester-
day. there would be vast difference be-
tween offering the bonds at their face value
in gold and offering them at their face value
in greenbacks. The funding is possible, but
the sale of the bonds at par in gold is i'm
possible.


The steady funding of the greenbacks
during the ensuing three years would save
the necessity of vast accumulation of gold
(even if a sufficient accumulation were prac-
ticable) to begin resumption in 1879. BY
Withdrawing the legal tender notes gradually
from circulation their amount would be SO
reduced as to prevent great amount of them
being poured upon the Treasury for redemp-
ton when the date arrives for their payment.
BY this process their value would probably
be advanced to par with gold before 1879,
precluding q great run upon the Treasury
and sudden convulsion in the business
of the country. Such precautionary meas
ure would be wise, even if it were per-
fectly easy to accumulate great stock of
gold to meet the exigency of q fixed date for
resumption. But vast accumulation of
gold for that purpose is not easy. Mr.. Bris-
tow states two reasons why 1t is inexpedient
to attempt to manage resumption in that
q 0Ii
minor one-is the loss of interest on large
amount Of gold lying idle in the Treasury.
The necessity for losing interest in that way
would be, to great extent, obviated by
withdrawal of the greenbacks by funding and
dispensing with stock of gold to redeem
them. The other objection which Mr..
Bristow makes to accumulating a great
hoard of gold to be paid out for le-
gal tender notes all Of sud
den in January, 1879, is the motive
it would create to obstruct our policy by for
eign nations. They would jealously guard
their stock of gold from SO great drain,
which would derange and unsettle the com
merce of the world. 1t might be in their
power to prevent resumption in this coun-
try, if attempted by method which would
require a vast amount of gold to be with
drawn from the circulation of the world and
locked up in the Treasury of the United
States BY the process of funding which
Secretary Bristow recommends sufficient
amount of greenbacks could be withdrawn
to bring the residue of the greenbacks to
par without disturbing the money markets
of the world by a great drain Of gold, to lie
idle in our Treasury.


Another excellent recommendation Of Mr..
Bristow is the repeal of the Legal Tender act,
to take effect January, 1877, two years in ad-
vance Of resumption. He would have such