The Breckenridge news. (Cloverport, Ky.) 1876-1955, 1894-08-15
COLD RESERVE.
How The Government May Stop The
Outflow of Gold From The
Treasury.
Carlisle is Acting Under lnstruc-
lions That He Cannot
ignore
AND HOLD HIS JOB.

A correspondent wants to know il
there isn't some method by which the
government can stop the outflow of gold
from the treasury. In reply, we would
say that there is the simplest method in
the world-the method of common sense,
the method that is employed by the
Bank of France, the method that was
employed by our own treasury until
"Calico Charley" Foster agreed to give
the New York agents of foreign bankers
an opportunity to get their hands on the
gold reserve.
lie did this by means of a treasury
policy, unheard Of until he adopted it,
by which silver notes were made re-
deemable in gold at the option of the
note holder. Foster did this under the
instructions of some of the New York
bank presidents, and it has been kept up
by Mr.. Carisle-not because Mr.. Car
Isle doesn't know better but because
Mr.. Carlisle is acting under the instruct
ions that he cannot ignore without
resigning his place.
The excuse for this policy, which flies
in the face of reason, common sense and
all banking experience, is that it is
necessary in order to keep up the "par-
ity" between silver and gold. AS a
matter of fact this parity has never been
threatened. The coined silver and its
paper representatives have circulated
among the people on an entire equality
with gold. Parity was not threatened
when Charles Foster adopted his re-
markable policy. If it had been-if
there had been the slightest doubt in
the minds of the people with respect to
the efficiency Of silver corn and silver
notes as debt-paying money, the policy
he adopted would have destroyed the
parity between the metals at once. For
the policy of redeeming silver notes in
gold is an advertisement to the public
that silver coin is not good enough for
those who hold government obligations
that there is more efficacy in gold.
We say, therefore, to our correspon-
dent, that the way-and the only way
to stop the outflow of the gold reserve,
if the government is anxious to stop it
(which is doubtful to say the least) is to
return to the policy that prevailed be-
fore the great Ohio bankrupt took
charge of the treasury. That policy was
the use of both gold and silver as the
money OF redemption, except in the case
of certificates of deposit. These were
redeemed in the coin called for by the
contract ON their face-gold certificates
in gold, and silver certificates in silver.
If the reserve is of such importance
as to justify taxing the people to keep
it intact, it is certainly important enough
to justify those who have charge OF it in
taking extra precautions to maintain it.
But that is precisely what is not done
under the policy now in vogue. The
people have to pay interest on $50,000,-
600 OF gold borrowed last February, as
we now see, purely for the accommodation
OF European bankers. II, when Herr
Ickelheimer or Monsieur Lazard saunt-
cred up TO the subtreasury counters and
called for gold they were told that they
could get it only by paying commission,
something like 4 or 5 per cent above the
par of exchange, these lively agents of
foreign bankers would walk of with
fleas in their ears.
The people may console themselves,
however. The treasury policy which
has been the means OF sending out more
than $72,000,000 OF gold since the first
OF January, will work its own cure. The
day will come, il it has not already been
reached, when no American bank will
put up its gold to be shipped abroad.
The policy leads straight to a silver
basis. The treasury will be unable to
pay out gold when it has none on hand.
Then gold will go to a premium and
disappear, and, for a time, the people will
have period OF rest and recuperation.
When gold goes to premium silver and
its paper representatives will still retain
their debt-paying power, but their pur-
chasing power will be somewhat les
sened Prices will rise, values will ex-
pand, those who are boarding money
will turn it loose, the wheels OF industry
will begin to turn, and prosperous times
will return again.-Atlanta Constitution.