The times. [volume] (Richmond, Va.) 1890-1903, 1895-12-04

not remain stationary and tho absurd
spectacle nil ht be presented of dealer
selling gold TO the government. ana with
United States notes or Treasury notes IN
his hand Immediately clamoilng TOT lls
T.'u ", ana rcsalc a. h a n'sn a,a revent.
and redunds Mt receipts might idNolAniy
AFFECT the situation under dtscusslo- ~
anording an opportunity OF retdiiilns
these notes in the treasury when rectlN-
ed and thus preventing their presentation
for gold Such retention TO be us,iui
ought to be al least measurabiy lesina-
mont. and this rs precisely what y pro-
hibited so FAR a. United states notes are
concerned. by the law OF ls.s, iorDiunlns
their further retirement. The statute IN
so many words provides that these notes
when received into the treasury and be-
longing to the United States shall De
paid out again and Kept in circulation
TO MAINTAIN THE PARITY.
II viii. moreover. be readily seen that
the government could not refuse 10 pay
out United States notes ana treasury
notes in current transactions when de-
marded. and insist on paying cur sliVer
alone. and still maintain the parity De-
tween that metal and the currency repre-
scnting gold. Besides. the accumulation
in the treasury OF currency OF any hlhh
exactcd from the people through taSallon
Is justly regarded a. an esli' a'u J., ,''ii
not proceed far without vigorous protest
against an unjustifable retention OF mon
ey from the business OF the country ana
a denunciation Of any scheme OF taxation
which proves itself TO De unjust Nneh
II takes from the earnings and income
of the citizen, money so mucn IN excess
Of the needs Of government support lhat
large sums can be gathered ana heDt III
the treasury. Such a COndluOn mas mere
toforc. in times of surplus revenue, leo
the government 10 restore currency 10
the people by the purchase OF It's unha-
tured bonds az a large premium, ahn by
a large increase in its deposits in ma
tiOnal banks. and we easily remember mat
the abuse OF Treasury accumulation mas
furnished a most persuasive argument IN
favor Of legislation radically reducing
our tariff taxation.
NOT A QUESTION or SOINENCY-
Perhaps 10 Is supposed that suInclehs
revenue receipts would in a sentimental
way improve the situation, IN inspiring
confidence in our solyency. ana ahayinz
the fear OF pecuuiary exhaustion. ANA
yet through all our struggles 10 MAINTAIN
our gold reserve. ther" never has been any
apprehension as to orr ready ability 10
pay our way with such money as we hads
and the question whether or not our cur
rent receipts met our current expenses,
has not entered into the estimate OF oar
solvency OF course the general state of
our funds exclusive Of gold was entirely
immeterial 10 the foreign creditor and in
weston. His debt could only be paid in
gold and his only concern was our Dill
~ 10 keep on hand that kind Of money.
only July ], 1892 more than year and
q half before the first bonds were issued
net balance in the treasury exclusive of
such ieserN g. Of less than Sl3WJ,OD. but
the gold reserve amounted 10 more than
Sil4.NOp.OO. which was the quoting Yea
ture Of the situation. II was when the
stock Of gold began rapidly 10 fall that
fright supervcned. and our securities held
abroad were returned for sale and debts
OWED abroad were pressed for pay mtnt
IN the mean time. extensive shipments Of
gold and ether unfaNOrable indications
caused restlessress and fright among
our people at home.
WITHDRAWAL FOR BOARDING.
Thereupon, the general state OF our
funds, exclusive of gold. became also i'm
material 10 them and they too. drew
gold from the Treasury Tor boarding
against all CONTINGENCIES This is plain
~ shown by the large increase IN the
proportion Of gold wthirawn which was
retained by our own people as time ana
threatening Incidents progressed. During
the fiscal year ending June 30. 1891. near
IS 81. 900 i'm gold was withdrawn from
the Treasury and about >N.w"Ow was
sent abroad while during ne fscal year
ending June 90. 1895. over Sl110O.oOc was
drawn out Of which only about Sijw0oJ
was shipped, leaving the large balance
of such Withdrawals 90 be accounted for
by domestic boarding.
lnasmuch as the Withdrawal % our
gold has resulted largely from fright
there rs nothing apparent that Will pre-
vent It's continuance Of recurrence with
its natural consequences except such a
change in our financial methods as Will
reassure the frightened and make the
desire for gold less intense. II is not
clear how an Increase il revenue. unless
IL be in gold. can satisfy those whose only
anxiety IL is to gain gold from the gov
ernments store.
1t cannot. therefore be safe TO rely
uDOn increased revenues as a cure for
our present troubles
ONLY ISSUED TO SUSTAIN CREDIT
1t is possible that the suggestion Of in
creased revenue as remedy Tor the DIFF
nculties We are considering may nave
originated I'm an intimatiOn or distinct al
legation that the bonds, which have been
issued Ostcnsibly TO rcplcnish our gold re-
serve, were really issued 10 supply iusul-
ncicnt revenue. Nothing can he further
from the truth. Bonds were issued to
obtsin gold tor the maintenance OF our
national - edit. As has been shown, the
gold thus obtained has been drawn again
from the Treasury upon United states
notes and Treasury notes.
This operation would have been prompt
ly prevented II pc ssible, but those notes
having thus hcen passed 10 the Treasury.
they became the money of the govern
incnt. IKE any other ordinary government
funds and there was nothing 10 do but
TO use them In paying government eA-
Jcnses when needed.
AT no time when bonds have been is
sued has there been any cOasi ierl'iOn II
the question of paying the expense OF
government with their proceeds. There
was no necessity TO consider that gues-
ton AT the time of each bond issue we
had a safe surplus I'm the treasury iOl
ordinary operations, exclusive OF the gold
i'm our reserve. In February, 1928, when
the first issue OF bonds was made, such
surplus amounted 10 over SlN.uONO, IN
November. when the second issue was
made. IL amounted 10 more than Sl2,w1OtV,
and in February, 1899. when bonds iof
the third time were issued such surplus
amounted TO more than SlD,oWoO0. IT
now amounts To- $sS,O.2 i2O.30
Besides all this, the Secretary OF the
Treasury had no authority whatever to
enu-s or pay current expenses.
EFFECT OF THE BOND ISSUES.
cannot but think there has been some
confusion of ideas regarding the encN.
of the issue OF bonds and the results OF
the Withdrawal Of gold. II was the lat
ter process and not the former that by
substituting i'm the Treasury United States
notes and Treasury notes for gold increds-
ed by their amount the money which
was In the first instance subject TO or
binary government expenditures.
Although the law compelling an lncrcds-
ed purchase OF silver by the government
was passed on the lith day OF July. 1890,
the withdrawal of gold from the Treasury
upOn the notes given in payment on such
purchases did not begin until October
1891
Immediately following that date. the
Withdrawals upon both these notes and
United States notes increased very large
w. and have continued 10 such an extent
that since the passage of that law there
has been more than thirteen times as
much gold taken out of the treasury upon
United States notes and Treasury notes
issued for silver purchases as was thus
Withdrawn during the eleven and a half
years Immediately prior thereto, and after
the LIST day of January, 1919, when specie
payments were resumed.
Ii II neither unfair nor unjust To charge
large share of our present financial
perpleXities and dangers TO the opera