Gloucester County Democrat. (Woodbury, N.J.) 1878-1932, 1895-12-05
WOODBURY., N J, THURSDAY, DECEMBER 5 1895

period. 1t Will be seen by reference to
the debates in congress at the time the
laws were passed authorizing the issue of
these notes that their advocates declared
they were intended for only temporary use
and to meet the emergency of war. In
almost if not 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 mingled with the cur
rency of the country so that at the close
of the year 1874 they amounted to $751;
999, ,073
Immediately after that date and in Jan
nary, 1875, law was 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
so per cent of such additional national
bank circulation until such notes were re-
duced to $500, 900, 900. This law further
provided that on and after the LIST day of
January, 1879, the United States notes
then outstanding should be redeemed in
ooin 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 government,
but to issue bonds of the United States
and dispose of them for coin and to use
the proceeds for the purposes contemplated
by the statute
In May, 1878, and before the date thus
appointed for the redemption and retire
ment of these notes, another statute was
passed forbidding their further cancella-
tion and retirement Some of them had,
however, been previously redeemed and
Cancelled upon the issue of additional ma
tional bank circulation as permitted by
the law of 1875, so that the amount out
standing at the time of the passage of the
act forbidding their further retirement
was S346, 661, ,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 cancelled or de-
stroyed, but they shall be reissued and
paid out again and kept in circulation. I"
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 entering upon the redemption and re-
tirement of all these notes, and for which
such abundant means had been provided.
The government was put in the anoma-
lous situation of owing to the holders of
its notes debts payable in gold on demand,
which could neither be retired by receiv-
ing such notes in discharge Of obligations
due the government nor cancelled BY ac-
tual payment in gold. 1t was forced to
redeem without redemption and to pay
without acquittance.
The Gold Reserve.
There had been issued and sold $95.-
500 900 of the bonds authorized by the re-
sumption act of 1875, the proceeds of
which, together with other gold in the
treasury, created gold fund deemed suf-
ficient to meet the demands which might
be made upon it 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 treas
ury available for the same purpose, has
been since called our gold reserve and
$100, 600, 600 has been regarded as an ade-
quate amount to accomplish its object
This fund amounted, on the 1st day of
January, 1879, to S114, 1913, 800, and,
though thereafter constantly huctuating,
1t did not fall below that sum until July,
1892 In April, 1898, for the first time
Tince its establishment this reserve
amounted p less than 500, 600, 600, con
tanning at that date only s97 oil, $50.
In the meantime, and in July, $780, 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 in
terms conferred on him by refusing to pay
gold on these notes when demanded, be-
cause by such discrimination in favor OF
the gold dollar the so called parity Of the
bwO metals would be destroyed, and grave
and dangerous consequences would be
precipii ated by affirming or accentuating
the constantly widening disparity between
their actual values under the existing
ratio.
II thus resulted that the treasury notes
issued in payment of silver purchases un-
der the law Of 1890 were necessarily treat
ed as gold obligations, at the option of the
holder. These notes on the 1st day of No
vember, 1893, when the law compelling
the monthly purchase of silver was re-
pealed. amounted to more than S155, 600, |
600. The notes Of this description now
outstanding added to the United States
notes still undiminished by redemption OF
cancellation constitute volume of gold 1
obligations amounting to nearly $500,
600, 900. These obligations are the instru
ments which, ever since we have had q
gold reserve, have been used to deplete it.
This reserve, as has been stated, had
fallen in April, 1898, to S97, oil, $50. 1t !
has from that time tn the present, with
very few and unimportant upward move
fnents, steadily decreased. except as it has
been temporarily replenished by the sale
of bonds.
The Bond Issues.
In consequence Of these conditions the
gold reserve oD the 1st day Of February, /
1894, was reduced to S65, 43S, 377, having
lost more than s31, 600, 900 during the pre- |
ceding nine months, or since April, 1898. |
Its replenishment being necessary, and nc
other manner Of accomplishing it being
possible, resort was had to the issue and l
sale Of bonds provided for by the resump-
tion act Of 1875. Fifty millions Of these
bonds were sold, yielding SOS, 633, 295. II, /
which was added to the reserve fund OF
gold then on hand AS result Of this |
operation, this reserve, which had suffered
constant and large Withdrawals in the
meantime. stood on the 9th day Of March |
1894. at the sum of $107, 446, sO2. Its de /
pletion was, however, Immediately there |
after SO accelerated that on the 30th day
Of June, 1894, it had fallen to S64, S73, 025 4
thus losing by Withdrawals more than
$42, 600, 600 in five months and dropping /
slightly below it's situation when the sale i
of $50, 600, 900 in bonds was effected for /
it's replenishment.
This depressed condition grew worse /
and on the gath day of November, 1894, I
our gold reserve being reduced to S57, 500, |
70l, 1t became necessary to again strength
en- 1t. This was done by another sale oil /
bonds amounting to $50, 600 600, from
which there was realized sos, $685. 500, with \
which the fund was increased to Sill
142, 021 on the 4th day Of December 1894.
Again disappointment awaited the anx
ious hope for rel ef There was not even
a lull in the exasperating Withdrawals Of
gold. TN tho contrary, they grew larger
and more persistent than ever. Between
the 4th day of December, 1924, and early
In February 1895, a period OF scarcely Il