The Daily bulletin., 1892-10-08

ed States. As matter of fact, these
notes are treated as gold notes.
There are in excess of one hundred
of these notes in circula-
ton, and they are being turned out
at the rate of about Sl60,0O0 a 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, 1889, the net gold
balance in the United States Treas
ury was Sl9l,655,264. 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 S14l,-
9S2,946; and on July 30, 1892, after
two years of active circulation in
daily increasing volume, the net gold
balance stood at S1l0,444,391, against
which there was outstanding S105,-
566,176 of the Treasury notes of 1890,
redeemable in gold. Thus, the gold
balance really available had been re-
duced to I,S7S,22l 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
1s9O-supplanted it as circulating
mediums; and when silver ceased to
perform its functions as money (for
it 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 a 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 coin basis or pay the pen
atty.
Senator Sherman saw the effect of
his Silver Bill, and attempted to have
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, and
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
t 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, a coin
reserve sufficient for that purpose
5 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 costl.
e and wasteful experiment in tn
g United States, and we have not ye
e paid the uttermost farthing which
= due upon that experiment. Th
= English Banking system is faulty
4 and the Bank Charter Act is respon
3 sible for the frequent monetary ant
|, financial crises in England. Blu
l great and rich countries like tn
4 United States and England ma
e afford to risk serious errors in thei
s monetary laws, while weak and re
S latively poor country like Hawai-
a cannot. A bill like the one unde
S consideration should not be enter
n tanned. Its discussion even must d.
t harm.
y The second section reads like
9 huge joke, considering the state O
t Hawaiian finance. The 9th section
), adds ] percent to the interest pay
S able on 6 percent bonds. But ther
t is no need to analyse the bill b
: sections, it is SO loosely drawn. VIII
y convert the Post Office into Bank
g ing house? If there is to be Stat
: Bank the Finance Department shoul
y do the work. You have only to pas
s the Horner Bill, and grant frar
y chise to the Louisiana Lottery, t
5, finish Hawaii politically, financial,
It and morally.
/ RoBT. j. CREIGHTON.
IS San Francisco, August 20, 1892.
d