Pittsburg dispatch. [volume] (Pittsburg [Pa.]) 1880-1923, 1892-06-27
CALLING In THE CASH
In Order to Make a Respectable Show
ing at the End of the Year.
UNCLE SAM is PAYING NO BILLS
And Demanding Everything Due Him. 50
His Books Will Balance.
DAY OF SETTLEMENT ONLY POSTPONED

which reads as follows:
BY dint of calling in every dollar due to
1t and of putting off the payment of every
dollar of debt possible, the National Treas
ury will show at the end of its fiscal year,
next Thursday, a tolerably respectable cash
balance. The so-called sl00, 600 600 gold re-
serve for the redemption of the greenbacks
will not only not be impaired, but it will be
buttressed by margin of from Sl4, 900 OO0 to
s15, ,OOO0 900 in gold, and there will probably be
on hand besides enough silver and legal ten
ders to make a total of between Sl25, 600 600
and $3.50. 900 600.
1t is only after July Is real trouble will be-
gin. lnnumerable postponed claims will
then press for payment with not enough
funds on hand to meet them the arrears of
the skiing fund. which compute at $50 0O0, :
oOl, will have to be provided for, and the
ever-swelling pension list will resume Its de-
pleting work.
IN this emergency the Treasury may either
90 ahead and boldly draw upon its gold re-
serve, trusting to future income receipts to
replenlsh it. or it may borrow money by
selling new bonds. The Indications are that
both measures are contemplated. The gold
reserve will first be used, and If it cannot
otherwise be replenished, bonds will be sold
iOr gold to accomplish the purpose. In this
way the borrowing OF money to meet the
disguised under the appearance OF borrow
Ing money to maintain the credit Of our cur
rency and the odium Of financial misman-
Limitations Under the Law.
The question whether the secretary has
power under the redemption act of 1875 to
sell bonds for gold without additional legis-
tiou has already been submitted to the
House Judiciary Committee, and a favor
able report from it is confidently expected.
As have frequently pointed out, the main
tcnance Of specific reserve of gold in the
Treasury for the redemption of the legal
tender notes, either to the extent of $780,
100000 or to any other amount, is nowhere
required by law. 1t is true that about $685.
100000 in gold was procured from the sale of
bonds by Secretary Sherman in ISIS for re-
bllity in contendfng that the diversion of
this S95 COO 900 to Other purposes would be a
breach Of good faith toward the creditors of
the nation.
nobody accepts the legal tenders because of
the existence OF the gold reserve, but be-
cause Of their utility in the payment of
debts. Beside, in case of sudden distrust
IN their value. nothing short of gold enough
TO redeem the entire issue of $546, ,000, 900
would keep them at par with gold, since any
smaller amount would quickly be eX-
hausted. Still, the public has been so long
accustomed to look upon the 500 900 900 gold
fund in tho Treasury as sort OF palladium
@ financial safety, shat even its partial dis
credit the administration in popular esti-
nation. As yet the demands for gold for
shipment to Europe seem to have been met
without drawing largely upon the Treasury.
hut this immunity cannot be expected to
last much longer
A Growing Feeling Of Unessiness.
A feeling Of uneasiness is growing among
the officers of banks and the managers of
private banking firms over these gold ship
ments, which will very soon lead them to
refuse to pay out gold in large amounts and
to divert the drain from their vaults to
those of the Government. This they can do
by rendering greenbacks or bullion notes in
payment of checks and compelling their
customers TO apply tor gold to the Treasury.
II the Treasury hOnors the drafts thus made
upon 1t, its stock of free gold will speedily
tall below 500 OO0 600 and if it does not, but
tenders only silver dollars, as it clearly has
the night to DO, the long-dreaded suspension
OF gold payments will have begun, and gold
coin will go to a premium. The probability,
as have said, Is that the Treasury will pay
out gold. for little while at least, from its
slO0, ,0O0 600 reserve and If it cannot otherwise
replace it, it will sell bonds for gold under
the resumption act.
1t is essential, however, to the success of
this eXpedlent, that the volume of legal
tenders and of bullion notes now in circula-
ton shall be diminished somewhat and
herein lies possibility that the exigency of
the Government on this occasion may re-
suit IN a contraction of the currency instead
OF the expansion which similar exigencies
produced during the war. The demand for
gold to send abroad, and the alarm which it
creates in Wall street, proceed from the fact
that the volume of our currency is danger
ously near the limit at which it can be
main tatned Mt par in gold, and that the issue
1890 is continually carrying 1t nearer to that
limit.
A Palliation, Not Cure. \
The natural check, to a redundancy Of y
currency is the outflow of gold which we
see, but this at present is only a palliation
and cannot be cure, so long as the Treas
Ury printing press is pouring out more
paper money day by day. The next step
Will he for our own citizens to follow the
example Of those of Europe and demand
gold for the na ational promises topay dollars.
IL the demand is met, it will like wise only
pailiate the evil, since the paper notes, after |
are still reasonable, and when |
re1ssued they can be used TO repeat the |
withdra wal of gold If gold payments are |
to be maintained by the sale Of bonds for |
gold. the further imitation of the currency |
must be stopped. and possibly its volume |
will have to be contracted.
To illustrate the point more fully. Sun.
pose that during the coming fiscal year the |
national revenues fall as much short of the |
demands uDon them as they have this year. |
and tE&t. in order to meet both the new de-
hciency and that which will be carried over |
Tor this year, the Government temporarily /
pays ont SO much gold as to leave it with /
say only $50, 100000 on hand. Seeing this, the |
gold in their vaults, and to pay out, as far as |
possible. only legal tenders and silver Them
as is very likely to happen, a re.
le~ed demand arises for gold to send /
abroad. Either the reserve fund will have
70 be still further depleted, or an issue of /
bonds will have to be made, which can be
shipped in lieu OF gold, or for which gold /
VIII be paid here at home.
Currency as a Commodity
The sale of bonds abroad may indeed stop
ha oil
re issued to meet the demand here for the
exemption of legal tenders and bullion
otes will fail to accomplish their purpose
nless the paper money taken in exchange
or them is locked up or destroyed. If it is
aid out again as fast as it is received, it
viii only have to be redeemed over again,
nj the process will go on until, between
he receipts from the sale of bonds and the
eTUlar income Of the Government from
currency of the country remains in the
reasury vaults as it did three years ago, |
M thus IN a roundabout way we shall ar
I've at the result of substituting in the |
lands of the public interest-bearing bonds |
place OF non-interest-bearinr currency
so much Is said about the function OF the
urreucy as measure of value and a me-
lu1n ioE the exchange of commodities that |
re are prone TO forget its quality of being |
.self a commodity, and its subjection to |
he laws o. supply and demand, like other |
|
lst year, for instance, resulted in such |
DwHring Of its eXchangeable value that |
hree pounds of ii will hardly buy as much |
other articles as two pounds of il did a |
ear ago The worlds production o. wheat, |
n the other hand, was SO much less last year |
han usual that our fortunate farmers, who |
ad good crop, have been able to procure |
18th it considerably more of other COM
lodities than they did with that of the year
efOrc. |
So 1t is with every other product of human
ldustry. An increased supply of corn, |
lbaccO. sugar, coal, iron, copper, and even |
gold and silver, dfminishes their power of