The Madison daily leader. [volume] (Madison, S.D.) 1890-current, 1894-12-04
REPLENIsHING THE, RESERVE.
A New Law For h Issuing OF Bond
mi Should he Passed.

A New Law For the Issuing Of Bonds
a. Should he Passed.
During the last month the gold reserved
fnthetreasury for the purpose of redeem.
ing the notes of the government circulate
ing now In the hands of the people
became so reduced, and its further deple-
tion in the near future seemed so certain,
that in the exercise of proper care for the
public welfare IL became necessary to re-
plenish the r. :erve and thus maintain op-
ular faith in the ability and determination
of the government to meet, as agreed, its
pecuniary obligations.
It would have been well If in this emer-
gency authority had existed to issue the
bonds of the government bearing
q low rate Of interest and matur-
ing within a short period,
but the congress having failed to confer
such authority, resort was necessarily had
to the resumption act of 1875, and pursu-
ant to its provisions, bonds were issued
drawing interestAt the rate of 5 per cent
per annum and maturing ten years after
their issue, that being the shortest time
authorized by the act. / am glad to say,
however, that on the sale of these, bonds
the premium received operated TO reduce
the rate of interest to be paid by the gov
eminent to less than 8 per cent.
Nothing Could be Worse
or further removed from sensible finance
than the relation existing between the
currency the government has issued, the
gold held for its redemption and the
means which must be resorted to for the
purpose of replenishing such redemption
fund when impaired. Even if the claims
upon this fund were confined to the obli-
cations originally intended, and If the
redemption of these obligations mean
their cancellation, the fund would be very
small. But these obligations when re-
ceived and redeemed i'm gold are not can
celled, but are reissued, and may do duty
many times by way of drawing gold from
the treasury. Thus we have an endless
chain in operation,
Constantly Depicting the Treasury's Gold
and never near the final rest. AS lie this
were not bad enough. we have a statutory
declaration that it is the policy OF the gov
ernment to maintain the parity between
gold and silver, aided the force and mo-
mentAm Of this exhausting process and
added largely TO the currency obligations
claiming this peculiar gold redemption.
Our small gold reserve is thus subject to
drain from every side. The demands that
increase danger also increase the me-
eessity Of protecting this reserve against
depletion, and it is most unsatisfactory to
know that the protection afforded is only
. temporary ~palliation.
Only Ono Way.
Tt ia perfectly and palpably plain that
the only way under present conditions by
which this reserve when dangerously de-
rleted can be replenished, Is through the
issue and sale Of the bonds of the govern
ment Tor gold; and yet congress has not
only thus tar declined to authorize the is
sue OF bonds best suited to such o pur-
pose, but there seems o disposition In
some quarters 70 deny both the necessity
and power for the issue 0f bonds at all.
IcaAnot Tor b moment believe that any
Of ou citizens are deliberately willing that
their government should default in its
pecnniary obligations or that its financial
operations should be reduced to q silver
basis. At any rate / should not feel that
my duty was done IL / omitted any effort
! could makety avert such o calamity. As
long, therefore, as no provision il made
for final redemption Of the putting aside
of the currency obligation now used TO re-
peatedly and constantly draw from the
government iIS gold. and ~ long as no
haftar authority for bond issues is allowed
8MM NI