The Daily bulletin. [volume] (Honolulu [Hawaii]) 1882-1895, 1892-10-03

I'd States. As matter of fact, these
notes are treated as gold notes.
There are in excess of one hundred
millions of these notes in circula-
ton, and they are being turned out
at the rate of about 100000 day.
The effect, however, and the inevita-
BILE effect under the Gresham law, is
that these notes have steadily de-
pleted the United States Treasury
of its gold, while adding to the sill
yer hoard, as the Treasury state
ments issued every ten days conclu
sively show.
In January, 1882 the net gold
balance in the United States Treas
ury was Sl94655, 264. That was be-
fore the new paper issue of course
On January 81, 1891, nearly seven
months after their first issue, the
net gold balance had fallen to SILL
9S2,946; and on July 30, 1892, after
two years of active circulation in
daily increasing volume, the net gold
balance stood at Sl10,444,391, against
which there was outstanding SlO5,-
500, 176 of the Treasury notes of 1880,
redeemable in gold. Thus the gold
balance really available had been re-
duced to I,S7S,221 at the close of
last month.
While this gradual disappearance
of gold was taking place, the silver
coin kept piling up in the Treasury
vaults because the paper money
greenbacks and Treasury notes OF
lS90-supplanted it as circulating
medium; and when silver ceased to
perform its functions as money (for
il is not the medium of redemption),
as a matter of course it steadily fell
in value as a mere commodity, until
India, which is on silver basis, be-
came so depressed that it recently
petitioned for stoppage of silver
coinage and the adoption of gold
standard. Meanwhile our gold re-
serves are being transferred to Eu-
rope, while our liabilities in gold re-
main and go on steadily increasing
Austria will soon be on gold basis
at our expense without an effort on
her part apparently. This is why
gold is leaving us for Europe stead
lily, despite our enormous exports
and favorable trade balance and ex-
change. We must speedily come
back to a coin basis or pay the pen
atty.
Senator Sherman saw the effect oil
his Silver Bill, and attempted to have
a repeating Act passed last session
but the House did not pass it, be-
cause it made no provision for the
redemption of the outstanding
Treasury notes issued under it, anG
would have stopped the purchase OF
gold. This would only have intensi-
fed the evil; and the fact that it was
proposed to have an unlimited free
coinage of silver, on demand OF
private owners of silver bullion, with,
out any safeguards whatever, was in
itself enough to condemn the Bill.
From what has been written it
follows that paper money!" unless
secured by, or based upon, coin
reserve sufficient for that purpose
must ultimately drive gold and silver
out of circulation. 1t may temper,
arily initiate values, but all initiation
ultimately results in lowering o.
values: as witness our "boom towns
: in California, the condition of Mel
, bourne and generally of all the Aus
: tralian Colonies.
: ''Fiat money" has been a cost,
9 and wasteful experiment in tn
: United States, and we have not ye
2 paid the uttermost farthing which i
: due upon that experiment. Tn,
: English Banking system is faulty
and the Bank Charter Act is respon
sible for the frequent monetary anC
financial crises in England. But
great and rich countries like the
United States and England may
afford to risk serious errors in theil
monetary laws, while weak and re
latively poor country like Hawai-
cannot. A bill like the one under
consideration should not be enter
tanned. Its discussion even must dc
; harm.
The second section reads like
huge joke, considering the state o
Hawaiian finance. The 9th section
, adds percent to the interest pay
able on percent bonds. But Their
is no need to analyse the bill b,
: sections, it is so loosely drawn. VIII,
convert the Post Office into Bank
: ing house? If there is to be a Stat
Bank the Finance Department SHOULD
Y do the work. You have only to pas
$ the Horner Bill, and grant a fran
y chise to the Louisiana Lottery, t.
J, finish Hawaii politically, financially
t and morally.
! RoBT. j. CREIGHTON.
$ San Francisco, August 20, 1892.
"