Evening star. [volume] (Washington, D.C.) 1854-1972, 1893-12-20
NATIONAL FINANCES.
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Continued from First Page.l
the bonds herein suggested, I recommend
that he be empowered to execute from time
to time, as may be necessary, the obliga-
tons Of the government, not exceeding in
the aggregate $50,0oo.000. bearing q rate of
interest not greater than 3 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 willing to receive them.
The condition of the treasury Is such that
unless some available means are promptly
provided by law for supplying the growing
denciency, the public service will be serious
ly impaired and pensioners and other cred
ftors subjected to great delay and incon-
Venience. Congress alone has the power to
adopt such measures as will relieve the
present situation and enable the treasury
10 continue the punctual payment of all
legltlmate demands upon Ii, and respect
fully but earnestly urge that immediate at
tention be given to the subject.
The necessity for the extension of the
power OF the secretary to procure and MAIN
tam larger reserve for the redemption of
Oaiteu states currency must. l think. be
evident to everyone who has given serious
tnought TO the subject. At the date of the
resumption OF specie payments, January l.
IoIo: the only form of currency except coin
ceruhcates, which the government was re-
CURED or authorized by law to redeem i'm
com on presentation, was the old legal-ten-
ger notes. then and now amounting to
SSoto.ooi.Oio. and 1t was considered by the
secretary OF the Treasury that coin re-
serve of s1OO.OO0.O00 would constitute a suffi-
cient basis for the maintenance of that
amount or currency at par. The correct
ness or this conclusion was shown nv the
fact that, so long as there WAS no material
increase In the volume of paper redeema bic
oy the government, the reserve remained
unimpaired and no serious disturbances oc-
CURED in our monetary system: but under
the act or July Ia, 1890, additional trea snrv
notes nave been issued to the amount Of
$ioo'95o,94O, of which there are now OUT
seanulng sioS3iS224. thus making the direct
government obligations in use as currency
amount to the sum of $4y3 800 24O. ali of
Which the Secretary of the Treasury is now
requreo by law to redeem in coin on pre-
coinad 'o ,ra BESIDES this, there have been
IN iegal-tender silver, upon which certifi-
Gates have been Issued to the amount Of
S, ,s,s l9so9a; and as Congress. in the act of
3 1y ~, ds9o, declared it to be the estab-
lshed policy of the United States TO main.
Tam the TWO metals on a parity with each
otner upon the present legal ratio. or such
,auo as may De provided by law" an addi-
.tohaI reason now exists for comforting upon
tne secretary UNREASONABLE authorize ia
provide for such contingencies a NAV
arise. may
Under these circumstances II is in NV
Spihlon, necessary not only that he Should
oe clotned with full authority to procure
ana maintain an ample reserve in coin. bur
.nat the purposes for which such reserve Is
nrsn ms,u ana used should be made as COM
pehsnsiVe as the duty imposed upon him by
tne law. The existence Of such AUTHORITY
IN constantly available form would ~
.,sei! inspire such confidence in the security
ana stability Of our currency that its Actual
exercise might never become necessary. hut
tne iutility OF declaring a specific policy ana
withholding the means which NAV become
,o r'ay Ior us execution is too apparent
10 require comment. Largely on account ~
apprenensfons as to the ability of the Pow
eminent under the legislation then existing
70 continue the current redemption of It's
| notes IN coin and maintain the par,tv ~
me two metals. the shipments of gold from
TINS country during the fiscal wear 1SD3
reached, as already stated In this renort
the unprecedented amount of s1Os. $50. st4
| nearly al or which was withdrawn from the
public treasury by the presentation of notes
Tor redemption. Notwithstanding the most
strenuous EFFORTS by the department tn
,nalntaln the hundred million dollar reserve
| ihtact, the presentation of notes for re-
oenption to procure gold for shipment
eproad continued to such an extent that on
the 22d day of April. for the first time since
tne Iund was established It became neces-
sary 10 use part OF 1t. and 1t was reduced
to s3 2,s57: but II was afterward in
| creased by exchanges of currency for gold
so that on the 10th day Of August It had
been fuliv restored. and there was on hand
s103. 6Ss. 300 IN free gold. Nv Octoher 10
however It had been diminished by raaenn.
tors OF CURRENCY and otherwise to the sum
| VI ",,.''i,aN'' which Is the lowest point Il
has ever reached
An Unwise Policy.
| So long as the government continues tha
unwise policy of keeping its own notes out
standing to circulate as currency, and I'M
dertakes to provide for their redemption I'm
| coin on presen tation, II will be- In my opin-
Ion, essential for the Secretary Of the Treas
ury 10 possess the means, or to have the
ciear ana undoubted authority to secure the
| means, which may from time to time be-
come necessary to enable him to meet such
emergencies as the one which has recently
occurred in our financial affairs Under ex-
| listing legislation the Treasury Department
exercises to larger extent than all the
other financial institutions of the country
combined the functions Of a bank of issue
ana while the credit Of the government is
so strong that 1t may not be necessary TO
maintain at all times the actual coin re-
| serve which experience has shown to be
requisite In the case Of ordinary banking
! companies. still it would be manifestly i'm
prudent. to say the least. not to adopt such
precautionary measures as would enable
the government In times Of unusual mon
etary disturbance to keep its faith with the
people who hold its notes and coins by pro-
tecting them against the disastrous effects
or an irredeemable and deprecated cur
| rency
Whatever objections may be urged against
the maintenance Of a large coin reserve
procured by the sale Of Understanding
course
cannot be safely avoided unless the govern
ment abandons the policy OF issuing its own
notes for circulation and limits the func-
tons Of the Treasury Department to the
collection and disbursement Of the public
revenues for purely public purposes, and to
| the performance Of such other adrinistra-
| tive duties as may be appropriate to the
character Of It's organization as a branch of
| the executive authority. To the extent that
| II ia required by law to receive money on
| deposit. and repay 1t. or to issue notes
| and redeem them on demand, 1t Is ENGAGED
lfn business which cannot be conducted
without having at all times the ability to
comply PROMPTLY with its obligations Its
operations necessarily affect benefrtally or
otherwise, the private financial AFFAIRS of
| all the people. and they have right to he
| assured by appropriate legislation that their
confidence in the integrity and mower of the
| government has not heen rrtsnlaced
Currency Legislation.
| The recent repeal of so much Of the act
Of July IA, 1890. as required the Secretary
Of the Treasury to purchase silver bullion
and issue treasury notes in payment for it,
makes such radical change in the policy
of the government respecting the currency
| of the country that, until it's effects are
more fully developed, do not consider 1t
| advisable to recommend further specific
legislation upon that subject.
AS already shown in this report. the