Eagle River Democrat. [volume] (Eagle River, Vilas County, Wis.) 1893-1896, 1895-12-09

y.
effects, fall far short of curing the monetary
evils from which we suffer as result OF
long indulgence in ill-advised hnanclal ex-
pedients
The currency denomnated United States
notes, and commonly known as greenpaeRs,
was issued in large volume during the late
Civil war and was intended originally to
meet the exigencies Of that period. 1t VIII
Congress at the time the laws were passed
authorizing the issue of these notes, tnas
their advocates declared they were INTENDED
for only temporary use and to meet the
emergency of war. In almost if not in all
the laws relating to them some provision
was made contemplating their voluntary or
compulsory retirement A large quantity of
them however, were kept on foot and min
gled with the currency of the country, SO
amounted to 1881 ,999,073
Immediately after that date, and in Jan
uary, 1875, law passed providing for
the resumption of specie payments by which
the secretary of the treasury was required,
whenever additional circulation was issued
to National banks, to retire United States
notes equal in amount to 80 per cent. OF
such additional National bank circulation IN
til such notes were reduced to $780, 600, 000
This law further provided that on and after
the LIST of January, 1879, the United States
notes then on nding should be redeemed
in coin, and in der to provide and pTcpare
for such redemption the secretary of the
treasury was authorized not only to use any
issue bonds of the United States and dispose
OF them for coin and to use the pro-aedS for
the purposes contemplated by the statute.
In May, 1878, and before the date thus ap-
pointed for the redemption and retirement of
these notes, another statute was passed for
bidding their further cancellation and retire
nent Some of them had, however, been pre-
Viously redeemed and cancelled upon the is
sue of additional national bank circulation
as permitted by the law of 1875, SO that the
amount outstanding at the time of the pas
sage Of the act forbidding their further re-
tirement was 1916, 6S1, 016.
The law of 1878 did not stop at distinct
prohibition, but contained, in addition, the
following. express provision: And when any
of said notes may be redeemed or be received
into the treasury under any law from any
source whatever and shall belong to the
United States they shall not be retired, can
celled or destroyed, but they shall be reis-
sued and paid out again and kept in cifcula-
ton
day Of January, 1879 which had been fixed
up four years before as the date for
tering upon the redemption and retirement
of all these notes and for which abundant
means had been provided The government
was put in the anomalous situation Of owing
to the holders of its notes debts payable in
gold on demand which could neither be re-
tired by receiving such notes in discharge of
obligations due the government nor cancelled
by actual payment in gold. 1t was forced to
redeem without redemption and to pay with
out acquittance.
The Gold Reserve.
81 There had been issued and sold sos, 500 900
of the bonds authorized by the resumption
act Of 1875, the proceeds of which, together
with other gold in the treasury, created
gold fund deemed sufficient to meet the de-
lnands which might be made on it for the re-
demption Of the outstanding United States
notes. This fund, together with such other
gold as might be from time to time in the
treasury available for the same purpose, has
been since called out gold reserve and
the $100,0O0,000 has been regarded as
its Object This fu FUND amounted cfo on the
LIST day of January, 1879, to $114, 1873 $50, and
though thereafter constantly huctuating, it
did not fall below that sum until July, 1892.
In April 1892 for the first time since its
establishment, this reserve amounted to less
than 500 0O0, containing at that date only
In the meanwhile, and in July, 1890, an act
had been passed directing larger govern
mental monthly purchases of silver than had
been required under previous laws and pro-
viding that in payment for sucn silver, treas
ury notes Of the United States should be
issued payable on demand in gold or silver
coin at the discretion Of the secretary of the
treasury. It was. however declared in the
act to be 'fthe established policy of the United
States to maintain the two metals parity
with each other upon the present legal ratio,
or such ratio as may be provided by law
deemed permissible for the secretary OF the
treasury to exercise the discretion in terms
conferred on him by refusing to pay gold
these notes when demanded because by such
discrimination in favor of the gold dollar the
so-called parity Of the two metals would be
destroyed and grave and dangerous conse-
quences would be precipitated by affirming
or accentuating the constantly widening dis
parity between the actual values under the
existing ratio. 1t thus resulted that the treas
ury notes issued in payment of silver pur-
chases under the law of 1890 were necessarily
treated as gold obligations at the option of
the holder. These notes, on the list day of
November, 1898, when the law compelling the
monthly purchase Of silver err was wa oon repealed
notes OF this description outstanding,
added to the United States notes still un-
diminished by redemption or cancellation,
constitute a volume of gold obligations
amounting to nearly $500, 100000 These obl-
cations are the instruments which, ever since
IA va hnA crnl6 nrxrO how hon1 co6
to deplete it.
This reserve, as has been stated had fallen
in April, 1898, to $97, oil $50. 1t has from that
time to the present, with very few and un-
important upward movements, steadily de-
creased except as it has been temporarily
replenished by the sale of bonds.
Causes of the Shrinkage.
Among the causes for this instant and uni
form shrinkage in this fund may be men
toned the great falling off of export under the
operation Of the tariff law until recently in
FORCE winch crippled our exchange OF COM
STATED to some extent the payment of our
balances in gold; the unnatural infusion of
silver into our currency and the increasing
agitation for it's free and unlimited coinage,
which have created apprehension as to our
disposition or ability to continue gold pay
ments; the consequent boarding of gold at
home and the stoppage of Investments of for
eign capital as well as the return Of our
curities already sold abroad; and the high
rate of foreign exchange, which induced the
shipment of our gold to be drawn against as
matter of speculation.
In consequence of those conditions, the gold
reserve on the LIST day of February, 1894, was
reduced to $65, 43S,377, having lost more than
$1,000 900 during the preceding nine months
or since April, 1893 Its replenshment being
necessary, and no other manner Of accom-
plishing it being, possible, resort was had to
the issue and sale Of bonds, provided for by
the resumption act of 1875
Fifty millions of these bonds were sold,
yielding $5S, 633 295.71, which was added to the
reserve fund of gold then on hand. AS re-
suit of this operation, this reserve, which had
suffered constant and large Withdrawals in
the meantime, stood on the 9Th day of March,
1884, at the sum of s1O7, 446, 8O2. It's depletion
was, however immediately sdt thereafter so ,a ae-
it had fallen to $64, S73, OPS, thus losing by
withdrawals more than $42,oOOOOO in five
months and dropping slightly below it's stu
alton when the sale of $50, 900 900 in bonds was
erected for its replenishment.
This depressed condition grew worse, and
on the oath day of November 1894 our gold
reserve being reduced to $57, 669, FOL, it became
necessary to again strengthen it. This was done
by another sale of bonds amounting to $780,
10000, from which there was realized $685.
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