The record-union., 1894-12-05

serious nature of the evils threatened by
them, have done more during the last
TWO years to impair the credit of the
government and people of the United
States at home and abroad, and to check
our industrial and commercial progress,
than all other things combined, and our
nrst and plalnest duty is TO provide, if
possible, some effective method for The
prompt and permanent relief OF the coun-
try from the consequences of the present
unwise policy.
"A brief statement of the practical and
unavoidable results of the existing legis-
latlon Will demonstrate its injurious ef-
1ects upon our financial affairs more
clearly than any argument that could be
submitted
BOND ISSUE.
The Secretary then reviews the circum-
stances leading up to the first fifty million
issue OF bonds, with view to replenish-
ing the gold reserve, including S5S,-
t6J,9l7, and increasing the free gold in the
| treasury to Sl07 ,446, ,S02. The lowest point
reached by the reserve since the resump-
| tlon OF specie payment was on the 9TH
day OF August, 1884, when, by reason OF
Withdrawals in the redemption of notes,
IT was reduced 10 S52, lS9, 700. After that
1t was slowly replenished by voluntary
exchange OF gold coin for United States
notes by the banks anu small receipts
OF gold III the payment of duties to the
Government, until the l4th of Novem-
Der, 1884, when 1t reached the sum of SOL
S13.374. In the meantime, however the
frequent presentation OF notes for re-
demption in gold by individuals and the
institutions not desiring it for export
clearly indicated the existence of feel
ing OF uneasiness in the public mind,
while foreign exchange was almost con-
Stantly at or near rate which made it
more profitable to export gold than to
purchase bills, and consequently with
drawals Tor shipment were daily threat
ened.
I'm addition to these causes of anxiety.
the vast accumulation of money at our
financial centers, and the general depres-
sion III business which prevailed in this
country. so reduced the rates of discount
that the inducements to keep funds
abroad, where better investments could
be made, were much greater in ordi-
nary times, and this, together with
the other facts stated, made it highly im-
prudent to neglect any precaution which
appeared necessary to insure the safety of
our financial position.
therefore the second issue of $50. OOO.-
QUO was decided upon. For this issue
proposals for which were issued last
month, 4S4 bids We're received amounting
to Sl1S, $50, ,050 nearly all of which were
at rates which would yield to the investor
three per cent, or less. One bid for the
Whole sum OF 500, ,000,0 upon the basis
OF 2.ISI per cent, and being the most ad-
vantageouS offer for the Government
that was made either sinelv or bv agpre-
eating the separate bids, was accepted.
and the proceeds of the sale, sos, ,53S, 800,
have nearly all been paid into the treas
ury according to the terms of the sale
The transactions justified the opinion
that Two and one-half per cent. bonds.
having reasonable time to run, could
probably have been sold at par, and cer-
talnly that three-per cent. bonds could
have been disposed of at or above that
rate.
AS to the authority to issue and sell
bondS-whlch already exists, and the
present state OF our financial legislation
compels its occasional exercise repeat
the recommendation made in my last an
nual report, that in the interest of the
Government and the people the power be
conferred upon the Secretary of the
Treasury to negotiate loans at q lower
rate OF interest and for a shorter time
than are now allowed. The existence of
such authority, instead of increasing the
probabilities OF frequent resort to that
means Of raising money, would have the
contrary effect, because when it is known
that the Secretary of the Treasury is
clothed with ample power and facilities
to procure means for the maintenance of
the reserve, public confidence in the
ability OF the Government to meet
promptly all demands upon it will be
much stronger than under present cir
cumstances. Besides, a policy of limit
ing the Government to the sale Of an an
tiquated bond bearing rate of interest
wholly consistent with the existing state
of the public credit, and having a longer
time to run than is apparently necessary
to the date of lis issue, cannot be justi-
fed upon any grounds OF expediency or
principle.
1.-The law should be so amended as to
conform to the conditions and require
mentS OF the public credit and service at
the same time, and / earnestly hope that
Congress will take early and favorable
action upon this subject.
REDEMPTION OF NOTES.
$50 long as there are in circulation un-
der the authority of the Government two
coins unequal in value, but equal in legal
tender qualities, every consideration of
good faith and sound policy requires the
prompt redemption of the notes on the
presentation iii the kind of coin demanded
10y the holder and the constant observ-
ance OF such administrative methods as
may be necessary to preserve the pur-
chasing power of the less valuable metal
This Is essential to the continued circu-
latlon of our standard silver dollars and
their paper representative at par, and
TO abandon this policy without submit
ting better one in it's place will not only
fail to cure any of the evils now existing.
but will entail upon the people OF the
country additional and greater ones.
This situation is the direct result of the
features of our currency legislation, but it
cannot be permanently avoided, or even
temporarily improved. without material
changes in our laws relating to that SUBJ
ject. These features are:
'First-The circulation of United States
Il
demption i'll coin on demand
''Second-The compulsory issue of such
notes after redemption.
"Ihird-The excessive accumulation
and coinage of silver and the issue of
notes and certificates against it upon a
ratio which greatly overyalues the
amount, as compared with the standard
unit of value in this and other principal
countries.
Frequent issues of bonds for the pur-
pose OF procuring gold, which cannot be
Kept alter it has been obtained, viii GER
talniy cause increased distrust among our
own people, as well as among the people
OF other countries, and not only swell the
volume OF our securities returned from
abroad for sale or redemption. but in
crease the withdrawal OF foreign capital
heretofore invested in our domestic en-
terprlses. Ordinarily, when there is no
dIstrust OF our currency or other dis
couraging influence, a considerable part
OF the interest and dividends earned by
foreign capital in this country is annually
or semi-annually reinvested, and this,
together with the fact that under normal
conditions the balance of trade is in our
favor, enables our people to meet their
obligations abroad without reducing
their stock of money at home. But when
distrust arises. either as to our ability to
pay or as to the value of the money with
which we intend to pay, the foreign capi-