Year: 1873

and maintained by the United States
1. The amount of paper money in circulation
may be diminished. 3. The population and
trade of the country may so increase that the
amount OF paper currency now in use may be-
come equivalent in value to gold. 8. The pur-
chasing power, or market value, Of gold itself
may decline. This last is by no means an unrea-
sonable supposition. 1t has, in fact, been dem
onstrated that in the quarter of a century since
the opening of the mines in California and
Australia, the average price of commodities,
calculated for long periods, has risen which
is exactly the same thing as to say that the
purchasing power of gold has fallen. AS the
annual production of gold is still at the rate
of one hundred million dollars year, it is not
absurd to suppose that gold will continue
slowly to depreciate.


If we apply the foregoing principles to SEN
atOr Sherman's bill, we shall find that the prac-
teal working of that measure will be to restore
specie payments through a diminution OF the
volume of the currency, and an addition to the
commercial supply of specie. Paper money
will be paid into the Treasury for gold and
for bonds, and only so much will circulate as
will exchange freely for gold, the aggregate
being in all probability somewhat less than
the volume which now circulates at discount
of more than ten per cent. Should Senator
Sherman's bill become law, after the 3lst
day of December of the current year the
Secretary of the Treasury will be required
to redeem lega-tender notes at par III gold,
or should that be incOnvenient, to give in ex-
change for them ten-year five per cent bonds
of the United States, dollar for dollar. The
United States bonds of that description now
in the market are worth about par III gold, so
that it is extremely probable that at first there
would be considerable amounts of currency
offered for redemption. But it is also clear
that the amount of currency which could be
returned to the Treasury would be limited.
Enough would be held by the public for the
wants of trade, for the rates of interest would
be Immediately affected should any very con-
siderable sums be at once withdrawn for con-
version into bonds. The bill very properly
allows the Secretary Of the Treasury to re-
issue the notes which he may have redeemed,
either in the redemption of bonds or in pay
ment of the current expenses of the Gov
ernment.


1t may be asked how, under these circum-
stances, the volume of currency will be less
ened To this question it may be replied that
with a specie currency, or currency con-
vertble into specie, the note circulation will
generally be regulated by the magnitude OF
the payments which we may have to make to
foreign countries in the adjustment of inter-
national balances. If much gold is exported,
the Government will have more of its notes
presented for redemption, and the outstanding
volume will be diminished The Secre-
tary will require a considerable reserve
of coin, and it will also be beneficial
to have an income in excess of expenditures.
Three years ago the specie balance in the
Treasury was much larger than it is now; the
surplus income was also larger, and the pre-
MUM on gold was no higher. The TRIBUNE
then advocated a prompt resumption of specie
payments, knowing that the Treasury was
rich enough and strong enough to carry us
through VIII those who ridculed Mr.. Gree
ley's views then, and who think the present
project impracticable, give us a better plan
IL not, let us go ahead with this one.