Rensselaer Union, Volume 10, Number 28, Rensselaer, Jasper County, 28 March 1878 — Sec'y Sherman's Financial Views. [ARTICLE]

Sec'y Sherman's Financial Views.

Secretary-of-thc-Trejuury Sherman recently had a consultation with the Finance Committee of the United States Senate, in which he took occasion to give his views at considerable length upon what lie believed to be the proper course to be pursuod in regard to financial allairs, and especially the duty of Congress in respect to specie resumption. Mr. Sherman prefaced his remark* by tbe statement that the Treasury held in gold and •liver, freo from all liabilities, the sum of $71,775,860.56, and added: We nave in process of preparation for resumption reduced the volume of United States notes. The amount was $382,000,000 at tbe time of the passage of the Resumption act, anil the amount now is $848,618,024. Again, the amount of outstanding bank uotos has been reduced. On Dec. 81, 1875, the amount was $346,479,756; on Dec. 3L 1877, $321,672,505, and on Feb. 28, 1878, the amount of bank-notes outstanding was $821,989,991. But the amount of bank-notes of banks in existence not in process of liquidation was $299,540,475, and the difference between these two sums Is the amount of the uotes of banks in process of liquidation, although the notes are In circulation, yet an equal amount of greenbacks are In tiie treasury as a special deposit to redeem them. If you count the whole greenbacks as outstanding there would be $299,000,000 of National Bank notes. Then ltmust be remembered that the United States notes have been In circulation since 1862 and the bank-notes since 1864, and that large sums are lost or destroyed. He estimated that the aggregate of banknotes and greenbacks and fractional-currency outstanding at that time, deducting for those lost or destroyed and those held for outstanding bank-notes of banks In process of liquidation, was about $643,000,000. He said, speaking of preparations for resumption, “we have already practically abolished the premlnm on fold. We have reduced the amount of United tates notes and the amount of National Bank notes outstanding. We have paid off, practically, the fractional-currency, and now we have a very remarkable circumstance In our favor. The balance of trade is in oltr favor to the amount of $160,000,000 a year, bringing silver and gold and bonds back to us. In the last three years the balance of trade In onr favor has been $414,034,606.” To a number of questions asked, Sec’y Sherman replied: “Wc have got both gold and silver from England, but we must do it, as Lincoln said, unbeknownst to them, it must come by the natural currents of trade. To attempt to bring by any artificial movement a large sum of gold to this country would create alarm. All last summer and fall the accumulation waajfrom $5,000,000 to $8,000,000 each month. Some of that came from our own mines, and some of it from abroad, but. we accumulated It without any possible injury to anybody. Now, I do express my opinion officially and personally, that for the reasons I have given we can resume on the Ist of January next, under the basis of the existing law.” The Secretary stated that the passage of the Silver bill had not created all the bad results he had anticipated, although it bad stopped refunding operations, and also stopped the accumulation of coin. Another bad effect was that it had caused the return of bonds held in Europe. Referring to its undoubted good effects, Mr. Sherman said: “In the first place, tbe Silver bill satisfied a strong public demand for a bi-metallic money, and that demand is no doubt largely sectional. No doubt there Is a difference of opinion between the West and South and East ou this subject, hut the delire for the remonetization of silver was almost universal. In a Government like ours it is always good to obey tbe popular current, and that has been done, I think, by tbe passage of the Silver bill. Resumption can be maintained more easily upon a double standard than upon a single standard. The bulky character of silver would prevent payments in it, while gold, being more portable, would be more freely demanded, and I think resumption can be maintained with a less amount oi stiver than of gold alone. I think it can be main-

tained better upon a bi-metallic or alternative standard than upon a single, and with less accumulation of gold. In this way the remonetization of silver would rather aid resumption. The bonds that have been returned from Europe have been readily absortied —remarkably so. Tiie recent returns in New York show that the amount of bonds absorbed in this country is at least a million and a quarter a day. This shows the confidence of the people in our securities and their rapid absorptleft will tend to eheek the European scare. The demand for bonds extends to the West and to the banks. I have no doubt we can sell the 4% per cents., and I think within a month we can sell all we want of 4-per-cent-, bonds to carry out the Resumption law, for I would not accumulate more than $5,000,000 a month, and that largely In sliver and gold bullion. There is no special necessity to force the bond market in order to maintain resumption. We now have from $71,000,000 to $90,000,OPO on hand, and every one can measure how much more will be necessary to maintain resumption. If the sale of bonds was ever so free, I would not accumulate more than $5,000,000 a month of both metals, and all sales beyond that should be applied for refunding 6-per-cent, bonds.” Upon being asked what could be done to aid him in specie resumption, Sherman said: “ I am very willing to answer that, although I think it is a legislative question. I think that you can aid resumption very much if yon will allow me to receive United State notes in payment of bonds. If I could sell 4-per-cent, bonds for currency and then re-issue the currency in purchase nf 6-per-cent, bonds it would be an aid to resumption. All I would have to do would be to pay the difference between greenbacks and gold, but that would only be paying ,1 per cent, premium. I have a right to call bonds, and I could URe currency in their payment by giving 101 for the bonds in currency, the difference between currency and gold at the present time. I think another aid to resumption is also very desirable. If yon could-make it clear by a legislative enactment that the Secretary has power to reissue United States notes after the first of January to the amount of $300,000,000, it would relieve the people and relieve the whole country from the fear which they have that the greenback currency is to be entirely destroyed. If we are to attempt on the first of January to pav off all these greenbacks as presented and to destroy them, I have .my doubts of our ability. I think the law is perfectly clear now as to the power to reissue up to $300,000,000 of currency. Another thing I would recommend: I would, on the Ist of October next, receive United Btatcs notes in payment for duties, and yet provide for interest on the bonds in coin. In other words, I would assume, on the Ist of October next, that our notes were as good as gold and silver, and would receive them as such.” He said he did not believe that specie payments could be maintained without power to reissue United States notes.