The Hawaiian gazette., 1884-12-24

melted down in San Francisco, and not
sold there for re-importation.
1t is not our desire to treat this question
of the gold deficit in way tending to
cause unnecessary alarm. We are aware
that in the opinion of few, there is no
danger in relying upon the present supply
in the Treasury, as long as silver enough
is kept there to represent, at its bullion
value the amount of gold for which the
certificates call. Those who entertain that
opinion base it upon the fact that banks
of issue are not expected to hold. and
usually do not hold, at any one time
enough gold to redeem all their outstand-
ing notes, and that Governments do not us
ually keep on hand gold enough to pay all
This argument is unsound and eminently
unsafe. Banks authorized to issue paper
money make their profits largely because
the law permits them to issue notes with
q specie basis less in amount than the vol
ume of their notes Such banks are re.
quired to give securities or hold property
OF value equivalent to all their notes, their
officers are to some extent liable, and the
banks themselves, as corporate bodies, are
| liable to the suits of individuals, and to be
placed in a receivers hands if their notes
are not paid on demand.
But a government cannot be so treated
1t has no securities for its obligations, ex-
cept the good faith of its officials, and their
answering obedience to the law of the
land. These certificates of deposit are not
bonds payable at a future date, they are
not given for money lent, but are simply
the certificates of the deposit in the Treas
ury Of the sums of money, as stated in
them. payable on demand In other words,
the Treasury is a trustee of such
money. it is the money of the de
positor Such deposit is not made for the
benefit of the Treasury, but solely for the
convenience of the depositors, it is their
money to which they are entitled when
ever they ask for it.
If individuals, or if the bank of Bishop
and Co see fit to let their money lie on
deposit, or to make special agreements
with the Treasury to leave it there, and to
keep their certificates, that is well enough.
But such AN arrangement certainly ought
TO be made, if the Treasury proposes to go
along without the kind and amount OF
coin which the law and the certificates de
mand
The result of doing otherwise will, we
are confident, be to make gold scarcer and
dearer, and to make silver cheaper The
Treasury already announces the latter re
suit, namely, the cheapening Of silver
The gold famine will come more slowly
but no less surely.
A further drop in sugar, falling off il
the amount or value of our exported crops
would make gold rush out of the country
so rapidly that the consequences would be
at once disastrous. But the slow and
steady withdrawing of gold from circula
ton is a necessary incident of a short sup
ply A knowledge of the differential cal
culus is not required to enable one to cal
culate this. The simplest rules which con
troll mems actions, the plainest dictates o.
common sense, point to what is coming
if the gold shall not soon be obtained fol
payment of all those certificates behint
which the law declares that there must bc
| United States gold