Vermont phÅ“nix. [volume] (Brattleboro, Vt.) 1834-1955, 1895-12-06

clared they were intended for only temporary
use and To meet the emergency of war. In al
most II not all the laws relating 10 them some
provision was made contemplating their volun-
tary or compulsory retirement. A large guam
tity OF them, however, were kept ON foot and
mingled with the currency Of the country, 80
that at the close Of the year 1874 they amounted
to 1851 9Bg,07j.
Immediately after that date, and in january
1879, a law was passed providing for the re-
sumption OF specie payments, by which the
secretary of the treasury was required when
ever additional circulation was issued, 10 re-
quire national banks to retire United States
notes equal IN amount to 80 per cent of such
additional national bank circulation until such
notes were reduced to t}O0OO0,OJO This law
further provided that on and after Jan. !,
1879, the United states notes then outstanding
should be redeemed in coin, and in order to
provide and prepare for such redemption the
secretary OF the treasury was authorized not
only to use any surplus revenues Of the gov
eminent, but to issue bonds Of the United
States and dispose Of them for CON- and to use
the proceeds for the purpose contemplated by
the statute.
In May, 1873, 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
ment. Some Of them had, however, been pre-
viously redeemed and cancelled upon the issue
of additional national bank circulation, as per
mitted by the law of 1875, that the amount
outstanding at the time OF the passage of the
act forbdding their further retirement was
t3Hdsl,Ol6.
The law Of 1876 did not stop at distinct prohi.
bition, but contained, in addition, the follow
ing express provision:
And when any of said notes may be re-
deemed or BE- received into the treasury, under
any law, from any SQUIRE. whatever, and shall
belong to the United States they shall not be
retired, cancelled or destroyed, but they shall
be reissued and paid out again and kept in
circulation"
This was the condition Of affairs on Jan. l.
1879 which had been fixed upon four years be-
fore as the date for entering upon the redemp-
ton and retirement Of all these notes, and for
which such abundant means had been pro
vided The government was put in the anon
alous situation Of owing to the holders Of its
notes debts payable in gold on demand, which
could neither be retired by receiving such
notes in discharge Of obligations due the gov
eminent nor cancelled by actual payment in
gold
II was forced TO redeem without redemption,
and g. pay without acquittance. There had
bcen issued and sold &5jOJ,OO1 Of the bonds
authorized by the redemption act Of 1875 the
proceeds Of which, together with other gold in
the treasury, created gold fund deemed suf-
hcient TO meet the demand which might be
made upon Il for the redemption Of the out
standing United States notes. This fund, to-
time 70 time in the treasury available for the
same purpose, has since been called
Our Gold Reserve.
and $l0OOCO,OO0 has been regarded as an
| adequate amount to accomplish its object.
This fund amounted Jan. !, 1879 to $llLlQ3,-
| 80 and though thereafter constantly fiuctuat-
| ing, it did not fall below that sum until July
lsg2. In April 1873, for the first time since its
establishment. this reserve amounted to less
.han siUOO.OOO, containing at that date only
F7,Oll.3O.
In tn meantime, and in July, 1890, an act
| had .en pas Erecting larger governmental
monthly purchases Of silver than had been re-
| quired under previous laws, and providing
| that in payment for such silver, treasury notes
| Of the United States should be- issued payable
| on demand in gold or silver coin at the discre-
| hon of the secretary Of the treasury. Ii was
however, declared in the act 70 be "the estab-
| ushed policy Of the United States To maintain
the two metals on q parity with each other
1pon the present legal ratio, or such ratio as
may b. provided by law"
In view Of this declaration 1t was not deemed
permissible for the secretary Of the treasury
| to exercise the discretion in terms conferred
On him, by refusing to pay gold on these notes
when demanded, because by such discrimina-
ton In favor Of the gold dollar the s1-caIled
| parity OF the two m tails would b. destroyed
and grave and dangerous consequences would
| be precipitated by affirming accentuating
their actual values under the existing ratio
| 1t thus resulted that the treasury notes is
| sued in payment OF silver purchases under the
law Of lssO We're necessarily treated a. gold
| obligations AT the option Of the holder. These
| notes on Nov. l. ls93 when the law compelling
| the monthly purchase of silver was repealed.
| amounted TO more than Slj5.OO0.OjO. The notes
| OF this description now outstanding, ADDED to
| the United States notes still undiminshed by
redemption or cancellation, constitute a vol
ume of gold obligations amounting to nearly
| 10000 y. These obligations are the instru-
ments which, ever since we have had gold
| reserve, have been used to depleteit.
| This reserve, as has been stated, had fallen
| in April, 1873, TO $E,0ll $50. II has from that
time TO the present, with very few and unim.
portant upward movements, steadily de-
| creased, except As II has been temporarily
| replenished by the sale OF bonds.
| Among the causes for this constant and uni.
| form shrinkage in this fund may be mentioned
| the great falling of of exports under the
| operation Of the tariff law until recently in
| force, which crippled our exchange of com
modities with foreign nations and necessitated
| to some extent the payment OF our balance in
| gold; the unnatural infusion Of silver into our
| currency, and the increasing agitation for its
free and unlimited coinage, which have created
| apprehension as to our disposition OF ability to
continue gold payments; the consequent
| boarding Of gold at home and the stopping of
| Investments Of foreign capital As Wen as the
| return OF our securities already sold abroad,
| and the high rate OF foreign exchange, which
induced the shipment Of our gold TO be drawn
| against, as a matter Of speculation.
1.-THE president here aludes to the fact that
| the situation steadily grew worse and il again
| became necessary to strengthen the gold re-
| serve. Again disappointment awaited the
| anxious hope for relief. He then refers to the
| agreement with a number Of fnancers and
! banks, and saysl
| On the day this contract was made its terms
| Were communicated TO congress by a special
| executive message, in which it was stated
that more than $l6,o00OO0 would be saved to
the government if gold bonds bearing 3 per
| cent interest, were authorized TO be substi-
| tuted for those mentioned in the contract.
Congress having declined to grant the neces-
| sary authority to secure this saving, the CON
| tract, unmodified, was carried out, resulting
in gold reserve mounting to SlO7 81 go on
| July s, 1895. The performance of this contract
| not only restored the reserve, but checked for
time the Withdrawals of gold, and brought
| on period of restored confidence and such
| peace and quiet in business circles as were OF
the greatest possible value to every interest
that affects our people. have never had the
| slightest misgivlng concerning the wisdom or
propriety of this arrangement, and am quite
| willing to answer for my full share of
Responsibility For Its Promotion.
believe 1t averted disaster the immi-
nence OF Which was fortunately not at the
time generally understood by our people,
Though the contract mentioned stayed for a
time the tide of gold withdrawal, its good re-
suits could not be permanent. Recent with.
drawals have reduced the sum from $lOl ,57l :.
2SO on July s, 1895, to 800. How long it
| Will remain large enough to render its in
| crease unnecessary Is only matter of con-