Omaha daily bee., 1895-12-04

pointed for the redemption and retirement
ot these notes, another statute was passed
forbidding their further cancellation and re-
trement. Some Of them had. however, been,
previously redeemed and cancelled upon the'
issue OF additional national bank circulation
as provided by the law OF 1875, so that the
amount outstanding at the time of the pas
sage Of the act forbddng their further re-
tirement was Si6,6S1 ,O16.
NOTES MUST BE REISSUED.
The law Of 1878 did not stop at distinct
prohibition. but contained in addition the fol-
lowing 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,
cancelled or destroyed. hut they shall be is
sued and paid out again and kept in crcula-
ton"
This was the condition Of affairs on the 1st
day OF January, 1879 which had been fixed
upon four years before as the date for enter
ing upon the redemption and retirement of
all these notes, aud for which such 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
obligattons due the government, nor can
celled by actual payment In gold. II was
torced to redeem without redemption and to
pay without acqulttance.
lhere had been issued and sold $685. 900
of the bonds authorized by the resumption
act OF 1875, the proceeds or which. together
with other gold in the treasury, created a
gold fund deemed sufficient to meet the de-
mands which might be made upon IL for the
redemption 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 our gold reserve, and
500 900, 900 has been regarded as an ade-
quate amount to accomplish its object. This
fund amounted on the lot day of January,
1879, to Slli. 1913, $50, and though thereafter
constantly fluctua'ing, 1t did not fall below
that sum until July, 1892. In April. 1893,
for the first time since its establishment,
this reserve amounted to less than 500 o00,
900, containing at that date only S97 oil 800
COMPLICATED THE SITUATION.
In the meantime, and in July. 1890, an
act had been passed directing larger gov
ernmental monthly PURCHASES of silver than
had been required 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 discretion of the secretary of the
treasury. 1t was, however, declared in the
act to be "the established policy of the
United States to maintain the two metals
on a parity with each other upon the present
legal ratio, or such ratio as may be provided
by law"
In view of this declaration It was not
deemed permissible for the secretary of the
treasury to exercise the discretion IL terms
conferred upon him by refusing to pay gold
on these notes when demanded, because by
such discrimination in favor of the gold dol
lar the so-called parity of the two metals
would be destroyed and grave and dangerous
consequences would be precipitaed by affirm
ing or accentuating the constantly widening
disparity between the actual values under
the existing ratio.
1t thus resulted that treasury notes, issued
in payment of silver purchases under the law
of 1890, were necessarily treated as gold ob-
cations at the option OF the holder. These