Democratic Sentinel, Volume 1, Number 33, Rensselaer, Jasper County, 28 September 1877 — SHERMAN’S SIXTY MILLIONS. [ARTICLE]

SHERMAN’S SIXTY MILLIONS.

Judge Kelley Show* How it I* Safely and Profitably Employed by tlie Hacks. To the Editor of the Philadelphia Times : Will you permit me to respond to questions which come to me in such numbers that I am unable to reply specifically to each of the earnest men who propound them, aud to withhold reply from which is to sanction a misstatement of facts which is, in my judgment, working great evil to the suffering people of the country ? Many people believe that the world-wide depression of trade with which we are now afflicted is the result of mismanagement of the finances of this country and Germany ; that the enormous contraction by these two Goremments of the volume of money, to which the business of the world had adjusted itself, has been tlie fruitful source of all our present woes, and in the discussion of so grave a question the aim of every man should be to make known the truth, and the truth only, whether it bear for or against the theory he may advocate. Having devoted the later years of my life tef resistance to this contraction, I am by earnest men, in every section of the country, as to Lg ts ill io tliitt, if vtmliAUAiliuu bo tlio cause of our evils, money is so abundant that $60,000,000 of greenbacks are lying, unused and unproductive to their owners, in the treasury of the United States. My answer, in each personal reply I have been able to make, has been that such is not the fact. But my poor allegation is met by clippings from innumerable journals showing mo that during tho recent absence of Secretary Sherman, Assistant Secretary McCormick, in direct response to my theory, and, mentioning me by name, spoke of the “ ridiculous absurdity” of charging tho business paralysis upon the contraction of the currency, and pointed to the fact that, on the Ist of July last, $54,000,000 of greenbacks had been in the treasury, deposited by their owners without interest, and incapable of use until the certificates of deposit held in •xchange therefor should be surrendered and the notes withdrawn; and further that, though on the Ist of July the amount had been but $54,000,000, it had become, on the day the Secretary made this allegation, the 26th of July, more than $60,000,000. On his return from his trip along the coast Secretary Sherman mads haste to indorse, with much emphasis, this statement of Assistant Secretary McCormick, and to give the utmost possible publicity to his indorsement. Messrs. Sherman and McCormick have been counted among my cherished friends for more than sixteen years. I owe neither of them aught but friendship. Few men can Have held either of them in higher esteem than I, and I have, therefore, hoped that others would spare me the necessity of this communication by pointing out the glaring falsity of this statement. But the number of question* propounded to me on this subject, and the frequent reference made to these averments in the course of financial discussion, constrain me to assume the painful duty, which will raise in many minds the question: “ Can it be that the Secretary of the Treasury and his assistant are ignorant of the laws governing the treasury in its relation with the national banks and with the practical business of both ? or have these statements been deliberately made for the purpose of confounding earnest men in pursuit of a proper solution of the financial question?” The truth is that, with the exception of one and two dollar, and, perhaps, five-dollar greenbacks, which pass in the marketplace, in retail trade and in the minor uses of life, no part of the paper money of the Government is in such active and efficient circulation or Buch profitable use as that deposited in the treasury, and for which certificates of deposit are held by the national banks. The truth of my averment is known to every national banker in cities in which clearing houses have been established, and to many others, and cannot but be known to the Secretary of the Treasury, for this active, efficient and profitable use was imparted to notes so deposited expressly by an act of Congress, which received the signature of the President on the Bth of June, 1872, and the passage of which through the Senate was championed by Secretary Sherman, then Senator from Ohio. The text will be found as section 5,193, on page 1,011 of the Revised Statutes of the United States, and reads as follows: Section 5,193. The Secretary of the Treasury may receive United States notes on deposit, without interest, from any national banking association in sums of not less than SIO,OOO, and issne certificates therefor in such form as he may prescribe, in denominations of not less than $5,000, and payable on demand in United States notes at the place where the deposits were made. The notes so deposited shall not be counted as part of the lawful money reserve of the association, but the certificates issued therefor may be counted as part of its lawful money reserve, and may be accepted in the settlement of clearing-house balances at the places where the deposits therefor were made. I have said these notes are in active, efficient and profitable use. The knowledge that a bank holds certificates for such notes is a guarantee to depositors th.at it has at least part of the reserve

required by law, aud, in these days of corporate mismanagement such a palpable guarantee is of great value. But these notes circulate in the form of certificates of deposit every day on which a balance is settled at a clearing house. Prior to the passage of this act, when balances were payable in notes, it required many clerks in the clearing house to count the notes, at great expense of clerk hire and of wear and tear of notes, but now, by virtue of this act, the clerk hire and the destructive use of notes is avoided, while every note is put to the best use possible for its interest by the bank which deposited it. As one seeking truth and wishing to enable the masses of the people to comprehend the details of what is at best a complex and intricate question, I beg you to do me the favor to give this communication a place in your columns.

WM. D. KELLEY.