Birmingham state herald., 1895-12-04

and retirement of these notes, another statute was passed forbdding their further cancellation and retirement
 Some of them had, however, been pre- viously redeemed and cancelled upon the issue Of additional national bank circu- lation, as permitted by the law of 1875, so that the amount outstanding at the time of the passage of the act forbiddlngi
 their further retirement was SS46, 6Sl, Ol6 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, cancelled or destroy ed, but they shall be reissued and paid out again and kept in circulation.
 This was the condition of affairs on the first day of January, 1879, which had been fixed upon four years before, the | date for entering upon the redemption | and retirement of all these notes, and for | which such abundant means had been | provided. The government was put in | the anomalous situation of owing to the l 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 l cancelled by actual payment in gold-lt | was forced to redeem without redemp- | tion and to pay without acquittance:
 
 l ,000 of the bonds authorized by the resumption act of 1875, the proceeds of | which, together with other gold in the | treasury, created a gold fund deemed | sufficient to meet the demands which might be made upon it for the redemp- ton of the outstanding United States | notes. This fund, together with such | other gold as might be from time to 1 time in the treasury available for the l same purpose, has been since called our l -oIl hpnn
 regarded as an adequate amount to ac- | complish its object. This fund amounted on the first day of January, 1S7S to l $114, 193, 360, and though thereafter con- 1 stantly fluctuating, it did not fall below | that sum until July, 1892. In April, 1895,
 for the first time since it's establishment, l this reserve amounted to less than $10O,- l 100000, containing at that date only $97,- | 011,330. In the meantime and in July, | 1890, an act had been passed directing | larger governmental monthly purchases l of silver than had been required under 1 previous laws, and providing that in pay | ment for such silver treasury notes of l the United States should be issued pay | able 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 "the established policy or l the United States to maintain the two
 metals on parity with each other upon | the present legal ratio, or such ratio as | may be provided by law"
 In view of this Ceclaration it was not l deemed permissible for the secretary of l the treasury to exercise the discretion In 1 the terms conferred on him by refusing | to pay gold on these notes when demand 1 ed because by such discrimination in fa- | vor of the gold dollar the so-called parity l of the two metals would be destroyed | and grave and dangerous consequences would be preciptated by affirming or ac- l centuating the constantly widening dis 1 parity between their actual values under l the existing ratio. It has resulted tha. | the treasury notes issued In payment | of silver purchases under the law of 1890
 were necessarily treated as gold obliga- l tions, with the option of the holder. These notes on the first day of November, 1893, when the law compelling the monthly | purchase of silver was repealed, amount l ed to more than $155, 5,000000 The notes l of this description now outstanding are deed to the United States notes still | undiminished by redemption or cancella- l ton, and constitute a volume Of gold | obligations amounting to nearly $500,- | 00O, GOO. These obligations are the in- | struments which, ever since we have had | 8 gold reserve, have been used to de- | plete 1t.
 This reserve, as has been stated, had | fallen in April, 1893, to $97, ,330. It has | from that time to the present with few l and unimportant upward movements, | steadily decreased. except as 1t has been | temporarily replenished by the sale of 1 bonds.
 | Among the causes for this constant and uniform shrinkage in this fund may be | mentioned the great falling off of ex- l ports under the operation of the tariff l law until recently in force, which crip- pied our exchange of commodities with l foreign nations and neceSsita ted to some extent the payment of our balances in | gold; the unnatural infusion of silver l into our currency, and the increasing | agitation for It's free and unlimited coin | age, e,which has created apprehension as to l our disposition or ability to continue gold | payments; the consequent hoarding of | gold at home and the stoppage of invest ments of foreign capital, as well as the | return of our securities already sold | abroad, and the high rate of foreign ex- change, which induced the shipment of our gold to be drawn against as mat | ter of speculation.
 In consequence of these conditions the 1 gold reserve on the 1st day of February, l 1894 was reduced to $65, ,43S,377, having | lost more than $31 100000 during the pre- ceding nine monthSy or since April, 1893. | Its replenishment being necessary, and l no other manner of accomplishing it be- l ing possible, resort was had to the issue l and sale of bonds provided for by the re- | sumption act of 1875.
 Fifty millions of these bonds were sold. yielding $5S, ,633.295.76. which was added | to the reserve fund of gold then on hand. As a result of this operation this re- serve which had suffered constant and large withdrawals in the meantime, stood on March 6. 1894. at the sum of | s107, ,,446 S02. It's depletion was, however | immediately thereafter so acceler-
 ated that on June 30, 1894 1t had fallen | to $64S73, ,802 thus losing by withdrawals
 more than s42 900 in five months and dropping slightly below its situation | when the sale of $50.000.000 in bonds was | effected for it's replenishment. This de- pressed condition grew worse and on | November a. 1894. our gold reserve be- 1 ing reduced to $57. .660, ,701. it became nee | essary to again strengthen 1t. This was l done by another sale of bonds amount l Ing to s50.0 0.000. 900 from which there were l realized $5S S53S BOO with which the fund l was increased to S111 .142. .021 on December
 4. 1894.
 Again disappointment awaited the l anxious hope for relief. There was not l even a lull in the exasperat ting withdraw | als of gold. On the contrary, they grew l larger and more persistent than ever. Between December 4, 1894, and early in
 February 1895. period of scarcely more | than two months after the second re-en-