THE danger to the Treasury's redemption fund lay, as every one understood, in possible gold exports. As it happened, there was no gold movement in progress at the time of specie resumption; but foreign exchange was only a trifle below the normal gold-exporting point, and no spring season for eighteen years had passed without gold shipments. In the first half of 1877, nearly twenty millions gold had been exported from New York, chiefly obtained from the city banks. On January 1, 1879, these New York banks held in specie only $19,781,400, but they held twice as much in legaltender notes redeemable at the Treasury in gold. Supposing, then, a further rise in exchange and a heavy export of gold, there was not the least doubt over what would happen to the Treasury reserve.
Now it is true that every bank of issue is confronted continually with this possibility. In 1878 and 1879, while gold exports from London were in progress, the exporters carried their Bank of England notes to the Bank as a matter of course for redemption in gold, and shipped the gold. What was true