The Lafayette gazette. [volume] (Lafayette, La.) 1893-1921, 1893-06-17
THE GOLD CERTIFICATES.
Significant Departure In the Manage
noent OF the Treasury.

a Significant Departure in the Mama Sc
naent OF the Treasury.
The order of Secretary Carlisle sus-
pending the issue of gold certificates
was not a discretionary act The statute
compcls him to take that step when the
gold in the treasury, outside Of that
represented by gddd certificates in
acknowledgements SIG, 900, 900
at present-has fallen to 800, 600, 600
reserved to secure the redemption of
the grcenbacl<s. 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 grccnol if gold GER
tifcates cannot be had. by this process
the government would increase its
holdings of gold, whi4 MT increasing
directly the outstan n hy demands upon
it. Thus the government neither gains
nor loses lin 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 tho 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 =
minimum of 800, O0o, 900. Every green
back the government can exchange fog
gold is thus an increase in the apparen:
gold strength of the treasury. OK
course, the Erecnbacl>s are ultimately
redeemablc in gold, but the gold over
800, 900, 900 is s'frec gold,'' not required
to secure redemption, the theory of tho
law being that the faith of the United
States is a 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
;vIa fa1
below it, many believed. Secretary
Foster borrowed from certain banks
about IS, 200 900 in gold to keep his re-
serve good BY this process the treas
ury was put under obligations t" 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 dlb not
first consult New York bankers" We
believe that this is the very strength OF
his position. Instead of making ori-
vatc arrangements, for which incvi-
tably sooner or later some correspond
ing favor from the GOvcrnrn cnt woreld
be asked. he has taken the action PIE
scribed by the statute. Even as q
measure of cxpediency. is not that ~
wise? Those banks or individuals that
deem it prudent to aid III maintaining
the trcasurys gold reserve can do so by
dcpositing gold and taking legal ter
dcrs i'll return. All citizens are th,>s
treated with absolute equality under
the law by the secretary Of the treasury
lie could have avcrtel the situatiosa
only by accepting. favcrs from a few.
We welcome the divorce Of the treae.
ury from the money market if such k~'
the meaning of the sccretary's act. Ecr
years the treasury has been coming u
the relief of the money market ana
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 inculcatc false
notions Of the functions Of government
Some rcadjustment of prevalent ideas
will be involved. if we interpret cor
rectlv the secretary's motive. as was in
dicatcd recently in these columns when
state bank notes were curSorily con-
sltlercd, but safer ideas will be cstab-
lishcd in their stcad.--Albany Argus
a REPuRl iCAN LEGACY.