New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1893-06-04
THE OUTFLOW or GOLD.
RUMORS OF THE ISSUE OF NEW GREEN
BACKS TAKING DEFINITE SHAPE.
THE sECRETARYS POWERS UNDER THE ACT OF
1sas-AN IMPORTANT CABINET MEET

THE sEcRErARYs POWERS UNDER THE ACT OF
1saa-Ax IMPORTANT CABINET MEET
ING EXPECTED.
(BY TELEGRAPH TO THE TRIBuxRf
Washington, June 3.-The steady depleuon OF uie
gold reserve, which has fallen below $Sooooooo'
naturally excites considerable comment ana some uh-
easiness In Washington. despite the daly assurances
that 9Tressury officials feel msgtvings on ac-
count OF the outflow Of gold. which Is expected soon
to cease" The fact that both the President and the
secretary of the Treasury absent from Washing
ton on pleasure excursions Is pointed TO as evidence
that neither OF them feels disturbed on account Of
the financial situation, and therefore that there Is
no cause fer uneasiness And yet men who have had
great deal of experience inclined to the opinion
that some ucton will have to be taken by the
Government soon to maintain specie payments unless
the drain on the gold reserve shall cease.
They call attention to the fact that National
banks are required by law to maintain
lawful reserve Of 25 per cent, and say that
the Government cannot afford to do less The
amount Of legal.tender notes authorized by law Is
little less than s47 900 600, 20 per cent OF which, III
round numbers is $s6,75OO 900. and 1t is argued that
the Secretary the Treasury cannot safely allow the
cold reserve TO fall much below that amount
This would seem to be sensible view OF the case.
and yet for several days past In the absence OF
Secretary Carlisle, rumors which can be traced 10
the Treasury Department have been In circulation u
the effect that he seriously contemplated issuing ne"
greenbacks IN order to purchase gold NO alteh'ioh
was paid these stories at first, because the PROPOSE
ton seemed absurd to who are familiar with
the history and status Of the egaltender notes. but
they have now assumed form which seems to de-
mand that they shul receive attention, ecause II Is
known that the original suggestion, ike that 1er 'he
redemption OF Treasury notes an silver emaha'eu
from the Treasury d. parment 1t may have been'
ana probably wss originally put out as "feeer' u
see how 1t would be received and 1t has assumed
form something like this: The President, Secretary
Carlisle and other members of the Cabinet have De-
come convinced after an examination OF the statutes
that there are several ways to obtain gold witho"
issuing bonds. One Of them Is to use the authority
granted By an act passed In 1oG2 winch says '"a'
the secretary Of the Treasury "may purchase COIN
with any of the bonds notes OF the United e'a'c'
authorized by law at such rates and upon such terms
Is he may deem most advantageous to the puphe
interests."
Now In Secretary Carlisles absence 1t is asserted
that he has no doubt that under this provision ne
has the power to purchase gold coin by the issue VI
legal-tender notes. The question was hrst raiseu
whether the gold could be purchased without paying
premium which would bring about the very result
that 1t Is desired to avoid The Secretary oehe'es
however that the banks which hold considerable
Quantities of gold win be willing transfer to the
Government at par in return for legaltender notes.
These notes can be counted as part OF the DanA
reserve and will be substantially the representatives
OF gold COIN They will be as good as the goio GER
tincotes SO far as their redemption in gold Is con-
cerned but their will not tie up the gold pro-
cured for them, Is the with the issue OF goid
certificates The gold will belong to the general iuhd
OF the Government just like the gold reserves Oh inc
Bank OF England and the Bank OF France, out every
dollar issued in legaltenders will have go1 dollar
behind It, Secretary Carlisle has seriously considered
the exercise of this power and there is no doubt that
- thu
point of safety There is apparently no limit 10 the
amount he Is authorized to issue in legaender notes
In exchange for gold coin.'
II is further asserted that there Is statute
which prohibits the issue of legaenders for the pur
pose specified, and that further issues OF legal
tenders for deposits OF gold would be per-
fec,ly secured and would not 90 beyond $1,000
600 or go, 600 900 make up the gold reserve
They would have the advantage OF increasing the
volume Of outstanding paper currency, ana, while
they would replace gold which had been exported,
they would substantially increase the circulation,
because the gold has for the most part been boarded
instead Of being in active circulation. Pie Seere-
ta.y Is determined that no combination OF spectators
shall force him TO Increase the bonded debt Of the
country. and thinks that a slight increase IN the
ss SS gold
reserve"
Of the secretary Of the Treasury from Washington,
cannot be otherwise than damaging to him, and
not enlanate frCm sources which supposed 10 be
the head Of the Treasury Department. OF
course, the secretary OF the treasury cannot issue
any Obligation Of the (iovcrnment-whehcr interest
bearing or nOnintercst bearDg-withOut authority Of
law.
Abe act Of June 20. 1874, fixing the amount of
United states notes provides that the amount OF such
notes outstanding and TO be used part Of the
circulating medium shall not exceed the sum Of
S39g. 900 ,OOO' The Resumption net provided for
the redemption OF United states notes In excess
only OF $500 100000 Under this act the maximum
amount outstanding was reduced to s?47 900 in
ptarc he net AFT aV9 1aTS at.1
so much OF the Rcsumpton act as provided for the
secretary Of the Treasury 10 retire
sSyds, The the sc United If this 's sc, wo Legal
outstanding at the time OF the passage Of the act.
and that amount cannot be increased diminished
without the authority Of an act OF Congress.
II Is expected that special meeting OF the Cab
met will be held on Monday TO consider the situation
and decide upon the course to be pursued II is
be ready to give opinion 10 the authority OF
the secretary of the Treasury TO issue bonds without
action BY Congress- and Ii Is understood that the
opinion, II given. will be In harmony with the ono
given by Attorney General Miller the subject
laX winter. in this relation II may be remembered
Representative held that IL the duty Of the
Secretary Of the Treasury 10 sell bonds II necessary
IN order to prevent the impairment OF the gold
serve 10 extent that would be unsafe. Mr.. Car
Isle. who was then senator, expressed the same
opinion after II announced that he the com
ing secretary OF the Treasury ana his utterance
settled the fate OF the bill 10 repeal the Silver Pur-
chase law in the House OF Representatives.
Mondays Cabinet meeting will undoubtedly be one
OF unusual importance and interest.