Year: 1873

the Secretary OF the Treasury Assistant
treasurer Hillhouse at New York paid
| out national bank notes, whenever parties would
accept; so the constantly increasing currency bal
ance was, with the exception OF a few hundred


thousand dollars composed OF legal tender notes.
So confident WAS the head OF the Treasury


OF large expectations and rapid decline
In the premium in gold, that he re-


marked to a prominent Official the day before
the decline began In Wall street that he expected


to see gold even lower than in December, 1871,
when toward the end OF shat month 1t nuctuated
between eight and half and nine per cent. He
had ayailed himself OF the time TO sell when he
could get the most for it, and, with his ac-
cumuated legal tenders would in the fall,
buy bonds for the Sinking Fund, as required
by law. These purchases during July and August
amounted to only $223, $50. SO certain was he OF
what the condition OF the market would be in Sep
tember that ne had determined not to issue the
usual programme for the sale OF gold in October.
All his expectations have been more than realized.
The panic came before he intended to make his
bond purchases and exhausted his entire currency
balance. Gold is now drug in the market, and It
is doubtful, say Treasury officials, whether offers
Tor sale wonld meet with any response. Orders for
importatons have been countermanded, goods ar
irving are placed In bond, internal revenue re-
ceipts do not show any marked Improvement,


while the expenses OF the government continue
at about $17,000,00o per month. Should cold


weather set in early, and compel the suspension OF
work on Notifications and public buildings, it
would be some help to the Treasury, but the pros
pect is regarded as very poor. Meanwhile the Sec
retary has nothing to do but draw on the Forty
four Million Reserve, 1t is called, and possess his
soul In patience until such time the demand for
gold will justify his Offering it Tor sale and with
the accumulated currency balance reduce the out
standing legal tender circulation to $685. 000, 600;
and II in the course OF a lew days the announce
ment OF the daily Treasury balance should show q
currency balance of $50. 0000O0 or $22 900, 600,


and apparent increase in the circulation of legal
tenders the public need not be alarmed; for Secre


tary Richardson holds that he has the right to place


the whole, or any portion. OF the S44,OoOooO
to his cash credit, and announce, as usual, the


exact amount of legal tenders outstanding. But


the question involved Is, how will he be able to


bring the greenback circulation back to the mini


mum II foreign gold continues to pour into the


country and the balance OF trade In favor OF the
United States The Secretary himself says that
he cannot at present predict the time, and while
so much Is being said and printed about the gov


ernment resuming specie payment, people forget


that the interest on the public debt must be paid


in hard coin, aud the customs revenue does not
yield too much for the protection OF
this part OF the government Indebtedness. Under


these circumstances it is believed the convening
OF Congress will find the legal tender circulation


necessarily increased, and the issue Will be
squarey made between that body and the admin


istration. Secretary Richardson says


~ would as strenuousy oppose bill for per-


manently increasing the legal tender circulation
above the present standard as would bill for
permanently fixing 1t at $685. 000, 900. One OF two


thngs-the Secretary OF the Treasury must at all


times be able to pay the appropriations OF Con-
gress. or suspend payment until he can accumu-
late currency for that purpose. If the limit was
fixed as contended by prominent Senators last
winter, then the department would have been


obliged to suspend payment on all war
rants when the currency balance was ex.


hausted. Nor can the argument be maintained


against the department for boarding legal
| tenders during the summer and causing, directly


or indirectly. the present trouble. The fact that
| the business community were ready to receive
| national bank notes would show there was no


stringency at the time. 1t might be alleged that


the course pursued would inevitably compel me to


draw on the reserve. I am not responsible for the
condition Of things which compelled the step.
Congress makes the appropriations; it is the duty
OF the Treasury Department to see that the reve-
nues are faithfully collected and the moneys re-
ceived and legally disbursed. And / do not
believe there is member Of Congress who
would risk his good name as Secretary
of the Treasury for q day If he knew be had not
a reserve upon which to depend in cases OF
emergency. Where would the government be now
II Senator Sherman's theory had been carried out
do not remember OF a time since the beginning OF
this administration when the currency balance
was as large as at the beginning OF the present


financial trouble. 1t has been said / should have
held the currency and not purchased the bonds
|


most favorable price is imperative, and not OF my
making; and 1t is my duty to carry out the laws


governing the Treasury Department regardless OF
public criticism II Congress should enact that the
legal tender circulation shall not exceed the pres
ent minimum, then it would be the duty OF the


Secretary of the Treasury to make reserve large


enough out OF the $780, oooo 900 for any emergency;
and that would contract the volume per-


haps $25,0000OO or $50, ,O00, 900. / have not


the least doubt but s10,0OO,000 or SIS, 100000 OF
the government issue has been destroyed or mis-
laid since legal tenders were first crcuated so it
cannot be said there Is in circulation the amount
supposed. Add this to the reserve the Secretary
would be compelled to keep on hand, as cash
balance, and the result to the country, with its in


creasing prosperity, can readily be perceived No,
think the present standard, with the s44,o0o,ooO
reserve, as good the country DIS, as it has
pTOVeu Ou LOIc lHdu OHe oCCdslOu. AS salu De-
FORE do not believe in expansion OF the currency.
My mind Is fully made up on that
question:; but l do believe the credit OF
the nation demands the Secretary OF the
Treasury should always have at his command
the means for paying its Indebtedness. No legisla-
tion can regulate the amount within few millions
OF dollars any more than legislation can avert
financial panics When the time comes to sell gold
and accumulate currency it will be done, and any
excess in the legal tender circulation over
$3.50, ooc viii be restored to the reserve TO the
last dollar. AS long as the government owes
money, and it is necessary to draw on the reserve
to pay current Indebtedness, it will be done with
out hesitation or limitation, but for other pur-
pose.n


These views OF Secretary Richardson are under
stood TO be most heartily endorsed by the Pres