Year: 1873

Secretary Richardson Declines to Loan
Greenbacks Gold Deposited in the
Bank of England. and Gives His
Reasons.


WASHINGTON, Sept. 80, 1873.
The Secretary OF the Treasury has addressed the
following letter to Franklin Edison, Esq, President
OF the New York Produce Exchange, New York;


TREASURY DEPARTMENT.


WASHINGTON, Sept. 30, 1873.
SIR-Your letter OF the goth inst covering two
resolutions OF the New York Produce Exchange
has been received and the subject matter lully
considered.


The resolutions are as follows:-


Whereas the critical condition Of the commercial in
ss
Resolved That we respectfully suggest to the secre
tary Of the Treasury the following plans relief in this
Fsrss-Ihat currency be Immediately issued to banks
or upon EVIDENCE that gold has been
their corTespondens in London TO the credit Of the
United states to be used solely in
seoThat the President of the United States and the
OF order M the q ne outstanding loan
While the government is desirous of doing all in
its power to relieve the present unsettled condi
ton OF business a1airs-as has already been an
nounced by the Presidential is constrained in all
its to keep within the letter and spirit OF the
laws which the officers Of the government are
sworn to support, and they cannot go beyond the
authority which Congress has conferred upon
them Your first resolution presents difficulties
which cannnt be overcome. 1t is not supposed
that you desire to exchange coin in England for
United States notes IN New York at par. If your
proposition Is for the government to purchase
gold in England, to be paid for in United States
notes at the current market rate IN New York, it
would involve the government in the business
Of importing and specuIatlng IN gold Since the
receipts, and would be obliged to sell
the coin purchased at a price greater or less
the Treasury Department to loan United States
notes to banks In New York upon the pledge and
deposit in London OF gold, IL Is asking the Secre-
tary OF the Trcatasy 10 loan the money OF the
there Is no authority In law. II the secretary OF
the Treasury can loan notes upon pledge or coin
he can loan them upon pledge OF other
property in his discretion as he has recently
requested to do, which would be an extraordinary
power as well as most dangerous business 10 en-
gage in, and which my judgment would deter me
might not find it absolutely prohibited by
law. The objections already mentioned to
your first resolution are SO insuperable
refer to the many practical dl1iculeS which would
arise If an attempt should be made to comply with
your request. Your second resolution calls ior the
payment at OF the loan OF 1858, or the bonds
commonly called 'Flves OF 187l.' Upon a thorough
investigation am OF opinion that Congress has
not conferred upon the Secretary OF the Treasury
power to comp with your request in tnat particu-
lar, and in this opinion the law officers OF the gov
ernment concur. Under these circumstances you
will perceive that, while have great respect for
the gentlemen comprising the New York Produce
Exchange, am compelled, by my views OF the law
ana OF my duty, to respectfully decline 10 adopt
the measure which your resolutions propose.


have the honor to be very respectfully,


WILLIAM A. RICHARDSON,


Secretary OF the Treasury.