Iron County register. [volume] (Ironton, Iron County, Mo.) 1867-1965, 1893-05-04
cARLlsLE.s FINANclERlNo.

& -
Significant Departure In the Manage
ment OF the Treasury.
The order of Secretary. Carlisle sus-
pending the issue of gold certificates
was not discretionary act. The statute
compels him to take that step when the
gold in the treasury, outside of that
represented by gold certificates in
circulation-approximately SIG, OOo, 900
at present-has fallen to 500, O00, 900
reserved to secure the redemption of
the greenbacks- 1t has virtually. If not
literally. reached that point The pro-
vision Of the law rests on the belief
that for many business transactions
paper currency is preferred to gold, and
that deposits of gold will be made in
exchange for greenbacks, if gold GER
tifcates cannot be had. BY this process
the government would increase its
holdings of gold, while not increasing
directly the outstanding demands upon
it. Thus the government neither gains
nor loses in strength by the exchange
of gold certificates for gold. Every
dollar of gold received by it In ex-
change for a gold certificate must be
retained in the treasury to meet that
specific outstanding obligation. 1t is
not so with legal tenders. Their
amount is fixed and the gold reserve
for their redemption is also fixed at a
minimum of 500, 600, 900. Every green
back the government can exchange for
gold is thus an increase in the apparent
gold strength of the treasury. OF
course, the greenbacks are ultimately
redeemable in gold, but the gold over
500, 00O, 900 is free gold" not required
to secure redemption, the theory of the
law being that the faith of the United
States is sufficient guarantee.
What is significant about this order
is the departure it marks from the Gus
tom of the Harrison administration.
In February the gold reserve fell close
to 500, OOO, 900, if indeed it did not fall
below it, as many believed. Secretary
Foster borrowed from certain banks
about 100000 in gold to keep his re-
serve good. BY this process the treas
ury was put under obligations to those
| banks. The treasury and the bankers
were brought into relations more init
mate than those which should exist be-
| tween the government and the people
| Secretary Carlisle places his reliance
absolutely upon the law. He has not
sought favors for the government from
certain banks, and his action is already
criticised on the ground that he did not
first Consult New York bankers" We
! believe that this is the very strength of
/ his position. Instead of making pri-
vate arrangements, for which inevi-
| tably sooner or later some correspond
ing favor from the government would
be asked, he has taken the action pre-
scribed by the statute. Even as a
measure of eXpediency, is not that as
wise? Those banks or individuals that
deem it prudent to aid in maintaining
the treasury's gold reserve can do SO by
depositing gold and taking legal ten
ders in return. All citizens are thus
treated with absolute equality under
the law by the secretary of the treasury.
He could have averted the situation
only by accepting favors from few.
We welcome the divorce of the treas
ury from the money market, if such be
the meaning of the secretary's act. For
years the treasury has been coming to
the relief of the money market" and
the banks have been coming to the re-
lief of the treasury" The language inn
plies relations which ought not to exist
between the two. which cannot exist
without imposing improper obligations
on the treasury, which iuculcate false
notions of the functions of government.
Some readjustment of prevalent ideas
will be involved, if we interpret cor
rectly the secretary's motive, as was in
dictated recently in these columns when
state bank notes were cursorily con-
| sldered, but safer ideas will be estab
lished in their stead.-Albany Argus