The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1886-08-21
THE TREASURY BOND CALLS
The Acting Secretary Says that They Are
of an Experimental Character,
The Object Being to Ascertain How Much
Money the People Will Absorb-lndians
Preparing Themselves for Citizenship.
THE BOND CALLS.


An Explanation. by Acting Secretary Fair
child-Mr. Morrison's Mistake.
Nyecisl to the Indianapolis journal
WAsHrN GToN Aug 20.-The Star this even
ing publishes an interview with Acting Secretary
of the Treasury Fairchild on the subject of bond
calls. When asked IL the frequent calls of late
did not indicate change of policy on the part of
the administration with respect to bond calls, he
replied: mo, it is not change of policy. The
receipts are unusually large just at this time.
Silver is being absorbed by the people pretty
rapidly, and the conditions generally are quite
favorable for such call at this time. The call
does not affect the money market enough to
make the tight market motive, the bonds
are mostly held by the national banks, but what
little effect it has is helpful and the public may
as well get the benefit of it."
To a suggestion that it looked like following
out the Morrison resolution, the Secretary said,
with smile that it went beyond that He de-
MED that the calls were made for political effect
The reason Secretary Manning has not made
such calls was that the conditions were not
favorable. The thing had been overdone when
be assumed control Of the department., and Mr..
McCulloch was in doubt about the result when
he went out Secretary Manning had to wait
until the condition of the Treasury would war
rant further reduction of the debt. To havc
gone on calling bonas, with the Treasury in the
condition 1t was, might have reduced the money
70 the single silver standard. It was not safe to
call more bonds at that time, if the two metals,
gold and silver, were to be kept on an
equality. I'm substance" he said, "the
situation is just this: The government has
gold, silver and paper money, the fractional
currency and silver certificates. In paying out
st must allow the payee the option to select
which he prefers; which ever he wants-gold,
silver or paper-he can have. The one is as
good as the other, and he will take that which is
most convenient for his use. But if scarcity
OF one of these moneys precludes this selection
lii the government hands out silver, for in
stance, and says: Here, You must take this-it
Is the only money / have'-the condition is
changed For instance, say the government
pays q man in this way hundred thousand
dollars in silver. He has no use for more than
$4,000. He cannot use more than that In his
business, or distribute it among the people. He
has the other $50 600 on his hands. He must do
one Of two things with it-buy prop
erty or put 1t on the market If he
buys property the man he buys of
does not want the silver any more than he does
He must. therefore, pay more for the property
In that money; but it is most likely that he will
put the money on the market. The public has
absorbed all it can, so there is no demand for
silver 1t must go at discount say, of per
cent but it doesn't stop there. This discount
runs through all the silver in circulation and all
there is in the Treasury. We then have de-
precIated currency So, you see we cannot run
the risk Of this. The Treasury must be the
reservoir in which is held all the money that
cannot be absorbed by business and by the
people. The natural condition of eouality be-
tween the moneys must be preserved The
coinage OF two million silver dollars per month
was unnatural condition, made by statutory
action To balance this, the Treasury surplus
had to be increased so as to provide for that
which could not be used. Even if there
is no more silver than the people
want, 1t takes time to distribute
It. and it must be held in the Treasury and let
put to meet the demand. 1t must he let out just
rs fast as the people will absorb it, no faster
The department had to wait before making large
bond calls, until the condition of the Treasury
was such as to allow the choice Of money. Now
that the receipts of the government are large,
the people are taking the silver pretty WE'LL
The calls are by way of experiment. We will
eall as much as We can Thus far the calls have
amounted, since the lst of July, to $37. .000 000
The probability is that the calls during the year
will very far exceed the amount necessary for
the sinking fund. They will be made as often as
the condition of the Treasury will admit There
Is no fixed limit No one can tell three months
ahead what can be done iu the wav of bond
sails. The trouble with the Morrison resolution
was, az said in Congress. that it made it oblig-
atory to eall just so much This cannot be
aone."