The Indiana State sentinel. [volume] (Indianapolis) 1868-1895, 1893-12-27


earnings into a form of security which,
while IL would be perfectly safe, would not
only increase In value by reason of accu-
mulating interest, but be, at all times.
available as a means Of procuring money
when needed, and the experience of this
and other countries justfes the confident
belief that such a plan would be popular
and successful. In case congress should
not consider it advisable TO authorize the
secretary TO use for the purpose Of sup
plying deficiencies in the revenues any part
of the proceeds of the bonds herein sug-
gested, 1 recommend that he be empowered
necessary, the obligations of the govern
ment, not exceeding in the aggregate S50,-
C0oOOo bearing rate of interest not greater
than per cent, and payable after one year
from date, and that he be permitted to sell
them at not less than par, or use them at
not less than par in the payment OF public
expenses to such creditors as may be will
ing TO receive them.
Condition of the Treasury.
The condition of the treasury is such
that, unless some available means are
promptly provided by law for supplying the
growing deficiency, the public service viii
be seriously impaired, and pensioners and
other creditors subjected to great delay and
Inconvenience. Congress alone has the
power to adopt such measures as will re-
lieve the present situation, and enable the
treasury to continue the punctual payment
of all legitimate demands upon 1t, and I
respectfully, but earnestly, urge that i'm
mediate attention be given to the subject.
The necessity of the extension Of the
power of the secretary to procure and
maintain a larger reserve for the redemp-
ton. of United States currency must,
given serious thought to the subject At
the date of the resumption Of specie pay
ments Jan. l. 1879, the only form of cur
rency except coin certificates, which the
government was required or authorized by
law 70 redeem in coin on presentation, was
the old legal-tender notes, then and now
70 nd
sicered by the secretary of the treasury
that a coin reserve of 500 900 would con-
stitute a sufficient basis for the mainte-
nance Of that amount of currency at par.
The correctness of this conclusion was
shown by the fact that so long as there
was no material increase in the volume of
paper redeemable by the government, the
reserve remained unimpaired. and no seri-
Gus disturbances occurred in our none
tary systems; but. under the act Of July
IA, 1890 additional treasury notes have been
issued to the amount of Sl53,93 $40, Of which
there are now outstanding sl5S3lS224 thus
making the direct government obligations
IN United States currency amount TO the
sum Of S+99, S99. 240 all Of which the secre-
tary Of the treasury is now required BY law
TO redeem I'm coin on presentation.
Besides this. there have been coined. un-
der authority of law, $fl9.3325 $50 in legal
tender silver upon which certificates have
been issued TO the amount OF 1874. lbs 30i,
and IS congress- in the act Of July IA. 1880.
declared II 10 be THE established policy or
the United States 10 maintain the two met
ais on a parity with each other upon the
present legal ratio. or such ratio as may
be provided by law" an additional reason
now exists for comforting upon the secre-
tary unquestionable authority to provide
for such contingencies as may arise. Tn
der these circumstances II Is in my opin-
Ion, necessary not only that he should be
clothed with full authority TO procure and
maintain an ample reserve in coin, but that
the PURPOSES for which the reserve is to be
held and used should be made as compre-
hensive as the duty imposed upon him by
the law The existence of such authority
in constantly available form would Of
itself inspire such confidence in the Sc
curity and stability OF our currency that
its actual exercise might never become
necessary. but the futility of declaring a
specific policy and Withholding means
which may become necessary for its execu-
ton is too apparent to require comment
The Gold Reserve.
Largely on account Of apprehensions as
10 the ability of the government under the
legislation then existing to continue the
current redemption of SITS notes in coin
and maintain the parity of the two meta1S.l
the shipments of gold from this country
during the fiscal year 1893 reached the I'M
precedented amount of Sos $50 S44. nearly
all OF which was withdrawn from the pub
lie treasury by the presentation of notes
for redemption. During the three months
next preceding the 7th day of March. 1898,
when a change occurred in the admins
tration of the treasury department. the
Withdrawals Of gold from the treasury for
export amounted to $34.146,OO0. and during
the eight months which have elapsed since
that time such Withdrawals have amounted
10 $50, 259. 600 or S2.ll3B0 more than during
the preceding period Of three months. The
amount of free gold in the treasury on the
18th day of March, 1893, S100, So, 40, or
$9S2. 40 in excess of the lawful reserve, but
by making exchanges of currency for gold
with the banks in different parts of the
country. the amount was Increased to
Sl07. 49,, 6s2 on the 25th Of that month.
Notwithstanding the most strenuous
1far1f
ed-million-dOllar reserve intact, the
presentation Of notes for redemption 10
tinued TO such an extent that. on the sec
ond day Of April, for the first time since
the fund was established, it became neces-
sary to use a part OF II, and 1t was re-
increased by exchanges Of currency for
gold so that on the 10th day. OF August
on hand Sl03. 296 i'm free gold. BY Oct
49, however, il has been diminished by re-
demptions OF currency and otherwise to
point it has ever reached.
So long as the government continues
OUTSTANDING to circulate as currency. and
undertakes TO provide for their redemption
in coin on presentation, il will be, in my
the treasury TO possess the means or to
have the clear and undOubted authority
to secure the means which may from time
TO time become necessary to enable him
TO meet such emergencies rs the one which
has recently occurred i, our financial
affairs. Under existing sgislation the
treasury department exercises to a larger
extent than all the other financial insti-
tutiOns Of the country combined, the func-
tons of a bank of issue, and while the
credit of the government is strong that
IL may not be necessary to maintain at
all times the actual coin reserve which
experience has shown 10 be requisite in
the case of ordinary banking companies,
still it would be manifestly imprudent to
say the least, not to adopt such precau-
MI a a = IL he
disturbance TO keep it's faith with the peo-
pie, who hold its notes and coins, by
protecting them against the disastrous
effects of an irredeemable and deprecated
currency.
Bound by Provisions.
While the laws have imposed upon the
treasury department all the duties and re-
sponsibilities of a bank of issue, and to a
certain extent the functions of bank of de-
posit they have not conferred upon the
secretary any part of the discretionary
powers usually possessed by the executive
heads Of institutions engaged in conduct
ing this character of financial business.
He is bound by mandatory or prohibitory
provisions IN the statutes to do, or not to
do, certain things without regard to the
circumstances which may exist at the time
he is required to act, and thus he is al
lowed no opportunity to take advantage Of
changes in the situation favorable to in
terests OF the government, to protect it's
interests from injury when threatened by
adverse events or influences He can neither
negotiate temporary loans TO meet casual
deficiencies nor retire and cancel the notes
Of the government without substituting
other currency for them when the rev.
enues are redundant OF the circulation ex-
cesstve, nor can he resort, except to a