Sacramento daily record-union. [volume] (Sacramento [Calif.]) 1875-1891, 1888-10-10
MR. GRADY AND THE SURPLUS.

Government taxes the people for its sup
port is right, but all beyond that, all ac.
emulation of money to be unused and lie
in Government vaults is wrong. Mr.
Grady then drew the conclusion that the
Republican party wants to do this thing
accumulate taxes without use for them.
Let us examine into that proposition
The Republican tariff bill proposes tariff
reductions in the revenue amounting tc
about $75,000,000; the Democratic tariff
bill proposes reductions little in excess
There is, therefore, no very great differ
ence in the aggregate amount of the pro
posed reductions, and that fact conse
quently eliminates from the pending
debate a great deal of twaddle about taxing
the people. But there is very wide dis
tinction between the methods of the two
bills, by which they reach practically the
same end. The one proposes to free-list
ninety articles and lower duties upon
others, which will inevitably bring many
American industries and productions into
unequal competition with foreign produc.
tons and industries, to the injury, if moi
the destruction, of the former.
So it is question not of the amount Of
reduction, but of the means employed, OF
the avenues through which the end is to be
reached. 1t is Just there where the two
parties part company, one declaring for
retention Of the tariff that protects home
industry and production, and the other
that throws them open to the unfair and
unequal competition with foreign industry
and products, which have for their basis
ill-paid and servile labor, and condition
of the working class incompatible with the
demands upon the independent, free and
untrammeled Americans.
But, says Mr.. Grady, the tariff was
largely product of the exigency of war
the war being over, it should be greatly
reduced. Precisely; and that is just what
the Republican party proposes to do. II
need be, it will go to the extent of abolish
ing the internal revenue system also. For
that was born solely of the war. 1t is the
child of blood. 1t is the one relic of the
fratracidal strife of quarter of century
ago no, there is one other: the repression
of the right of the colored freeman at the
South.
But, asks Mr.. Grady and his party, what
will you do with the accommodating surplus
which is now and promises to remain ?
The reply is,-obey the law and redeem
United States bonds, representing the ma
tional Indebtedness, as the law commands
and as Mr.. Cleveland neglected to do, until
Congress piled him with whip and spur
1t is justifiable to conclude that his ne.
glect was purposeful, since it fostered his
political schemes and kept the surplus
swollen to be used as goblin to fright the
people.
But Mr.. Grady will respond to this, in
Common with the Philadelphia Record,
New York World, New York Star, New
York Commercial Advertiser, Macon Tele-
graph, Kansas City Times, San Francisco
Examiner and other prominent apologists
for Mr.. Cleveland's policy, If we propose
to spend the money for the bonds, that
will send them up to a high premium
figure. Now, the national bank circulation
Is based upon bonds as securities When
the premium reaches a top figure under
the stimulus Of the Government bid, these
banks, which make nothing upon their cir
citation (?), will retire the Improbable pa
per Issue, reclaim their bonds and sell
them to the Government. The result will
be to contract the currency of the country
suddenly, and there will follow panic
worse than that of 1857, and more serious
than that of 1873"
Let us see about that. As the Mime
apolis Journal forcibly puts it, the man is
worse than foolish who will not take up
his own note before it falls due and stop
the interest, or part of it, if he has the
money and no other use for it. So he
offers a premium for his notes for the priv
ilege of being allowed to take them up.
That is just what General Harrison wants
to do with the surplus, and Mr.. Cleveland
does not want to do. OF course the pre-
mium viii always be less than the interest
and principal at maturity, and the, differ
ence is the gain made by the Government.
Now then, will there be any less money
in circulation if the Governments note,
the bonds, is taken up and the coin
changes hands? But in the case Of the
banks, they have currency out that is a
medium for exchange of the products and
the results of industry. What will take
its place if it is withdrawn ?-the coin or
greenbacks which the banks receive from
the Government for the bonds. Let us
illustrate, and show that all this pretended
alarm about panic is rot. If bank has
100000 bonds put up as security for its
circulation, it is permitted to issue $4,000
of notes thereon. Let Us suppose the
bonds at maturity would be worth, prir-
cipal and interest, $4,000. Vow, if the
Government bids them up to $4,000 for
surrender prior to maturity and gets them,
it saves $4,000 of interest, and the bank
receives $4,000 in coin to be put into the
channels of trade where there was before
but 100000, a present gain TO circulation
of $4,000, and so the higher the premium
paid the greater the addition to the fund
of money moving in the arteries of COM
merce, and the farther removed the coun-
try is from any possibility of panic
As our contemporary, the Journal, puts
it, is not this surrender for a premium by
one and the purchase by the other of his
paper out of unused funds just what any
sensible business man would do? Let us
add, is it not what any sensible Admins
tration would do that did not plot to
swell the surplus for political ends?
Would not the banks, if there was con-
traction Of the currency, as Mr.. Cleveland
and the Adrertises and Star pretend to
believe. absolutely swell the medium Of