New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1893-04-20
A D1NGEROTS STEP.

It is reiterated from Washington, through
journals likely to have early information OF the
purposes of n Democratic Administrator, that
the Treasury will soon refuse to redeem new
Treasury notes in gold and will thereafter pay
only silver coin on such notes. This would
make those notes virtually irredeemable though
still receivable for public dues and full legal
tenders in settlement of private debts. 1t is
said the Administration actually believes that
this is a mode of preserving the parity CT
silver. a painful experience may teach
it the contrary.
The business world is 10th to believe that the
Administration intends at once to abandon the
gold redemption of Pant of the lcsal-tendcr
notes without any serious effort 10 MAINTAIN
them at par in gold Whether DepocratS or
Republicans men Of financial cxpcricncc and
knowledge see that the reported order would
instantly create two kinds OF currency. one re-
dccnabe in gold and the other in silver The
refusal Of the Treasury to pay gold for the
new lcgal-tcndcr Treasury notes would in the
most direct and effective way discriminate
against those notes and against silver com, and
in consequence the public and the banks would
he forced t. discriminate also. The new Treas
uiy notes are receivable for customs, and Gov
crnmcnt would have to receive plenty of them.
The old legal tenders, or United States notes,
would be carefully kept cut of circulation as
far a, possible, just as gold certificates have
bccn because gold could be obtained for them.
Thus the actual circulation would consist of
1852 100000 silver paper ION Tuesday SGD
600, 900 new Treasury notes and SOB, 900.
600 silver ccrtiiicatcS), besides S17O, 900 000
bank notes and S12O. 600. 900 silver CONS, large
and small. II would be natural 10 expect that
the S11O. 600 900 gold certificates and 1884.
600, 900 gold legal tenders outstanding on that
day would no longer go b the Treasury or into
general circulation except in exchange for gold.
The Administration and the public ought to
observe another phase Ct this matter The
bank notes arc properly rcdeemabe in old legal
tender notes but the Treasury is now the
agent of redemption for the notes and would
bc compelled TO decide instantly whether it
would force banks and tho public TO receive
new Treasury notes or other silver paper in
stead of paper rcdecmablc in gold. There
would be no more palrablc disregard of the
letter CT the intent Of the law in refusing United
States notes for bank notes redeemed than
there is in refusing gold for the new Treasury
notes. and Secretary Carlisle might with equal
reason persuade himself that such step had
become necessary in order 10 guard his gold
reserve. In that case the bank notes would
also become a form Of silver paper, and the
currency available for general use would be
$4,000. 900, all redeemablc in silver coin
only and that means practically not redeem
able AZ all.
Should the Treasury Try t. keep the bank
notes at par in gold these could be sent i'll for
redemption in large amount and gold at once
drawn out for the legal tenders paid. In that
case there would be, including gold certificates,
old legal tender, and bank notes, SCI ( 900. 900
Of paper with which gold could be drawn. and
S452, 100000 of paper redccmabe only in
silver Naturally the Treasury would get the
liver paper ard nothing clS'. But banks cou'd
not afford TO have such paper deposited with
the right TO draw cut for it gold or paper re-
deomablc in gold II the Treasury discrim
mates. they will be forced to, and the differ
cncc between the two kinds Of money could
hardly fail T. find speedy expression in
premium on gold. Once started. that premium
would inevitably tend 10 accord with the differ
cncc between gold and silver in market value
that is. the silver paper would tend to b. worth
in gold only what the silver bullion is worth
This fnghtfu disturbance Of the monetary
basis on which all trade, all industry. and all
the prosperity Ct the country rests would be
n mos. diScrcdablc result for the first quarter
Of n Democratic Administration. II could not
be claimed with the slightest reason that it
was unavoidable because the Administration
has not made any trial # the provision orgi
nally made for maintaining lcgal-tendcr notes
at par by paying ont the bullion reserve ere
atcd fer their redemption. Neither has it made
any attempt to obtain gold by sale Of bends
The public judgment would surely be that it
had failed neXrusably to Use the powers it has
for avcring disaster if it should now refuse
gold redemption for part Of the lcgal-tcnder
rotes in use.