The true northerner. [volume] (Paw Paw, Mich.) 1855-1920, 1895-12-06
LARGER REVENUE NOT A REMEDY
The President Thinks 1t Would Not Settle
the DifHculty.

the Dimculty.
Perhaps il is supposed that sufficient revenue
receipts would in q sentimental way improve
the situation by inspiring confidence in our
haustion. And Yet, through all our struggle to
maintain our gold reserve, there never has been
any apprehension as to our ready ability to pay
our way with such money as we had; and the
Questi' whether or not our current receipts
met our current expenses has not entered into
the estimate of our solvency. OF course the
general state of our funds, exclusive of gold,
was entirely immaterial to the foreign cred
itor and investor. His debt could only be paid
In gold, and his only concern was our ability
to keep Oh hand that kind OF money.
On July l, 1892, more than year and . half
before the first bonds were issued to replenish
the gold e'erve, there was a net balance IN
the treasury, exclusive of such reserve, OF less
than $l30O,OUO; but the gold reserve amounted
to more than Sll4.0OO,W which was the quiet
ing feature of the situation. 1t was when the
stock OF gold began rapidly to fall that fright
supervened, d our securitied held abroad
were returned for sale and debts owed abroad
were pressed for payment. In the meantime
aole indications caused restlessness and
fright ,mong our people at home Thereupon
the general state of our funds, exclusive OF gold,
became also immaterial to them, and they, too,
drew gold from the treasury for boarding
against all contingencies. This is plainly
shown by the large increase in the proportion
of gold Withdrawn which was retained by our
own people AS time and threatening incidents
progressed During the fiscal year ending June
30, 1894, nearly SS5,OOOO in gold was with,
drawn from the treasury and about 10000
was Sc Z abroad, while during the fiscal year
ending June 81, 1895, over xlT ,OOOOJO was
drawn out, of which only about $4,000 900
was shipped, leavinga balance OF such with
drawals 10 be accounted for by domestic hoard
ing.
Change In Our Finances Needed.
Inasmuch as the withdrawal of our gold has
resulted largely from fright, there is nothing
apparent IL at will prevent its continuance or
recurrence with its natural consequences, ex-
cept such a change in our financial methods as
will reassure the frightened and make the de-
sire for gold less intense. 1t is not clear how
an increase in revenue, unless il be in gold, can
satisfy those whose only anxiety Is To gain gold
from the government store 1t cannot, there
fore, be safe to rely upon increased revenues as
o cure for ouI present troubles. 1t is possible
that the suggestion OF increased revenue as a
remedy for the difficulties we are considering
may have originated in an intmation or distinct
allegation that the bonds which have been
issued ostensbly to replenish our gold re-
serve were really issued TO supply insufficient
revenue. Nothing be further from the
truth Bonds were issued TO obtain gold for
the maintenance of our national credit. As
has been shown, the gold thus obtained has
been drawn again from the treasury upon
United States notes and treasury notos This
operation would have been prOmp - prevent
ed, IL possible; but those notes ling thus
been passed to the treasury, they became the
money of the government like any other ordi-
nary funds, and there was nothing TO do but
to use them in paying government expenses
when needed
Government Not i'm Ne ed of Money.
At no time when bonds have been issued has
there been any consdera ton of the question of
paying the expenses OF government with their
proceeds. There was no necessity to consider
that question. At the time of each bond issue
we mad q safe surplus In the treasury Tor ordi
nary operations, exclusive OF the gold In our
reserve In February. 1894, when the first
issue Of bonds was made, SUCH surplus
amounted to over $lS,0O0OOO; in November
wnen the second issue was made, IL amounted
TO more than S42.OU00 /, and In February, 1885,
when bonds for the third time were issued
such surplus amounted to more than
G2,ssO 81 Besides ali this, the secretary Of
the treasury had no authority whatever TO issue
bonds to increase the ordinary revenues or
pay current expenses. cannot but think
there has been some confusion of ideas regard
ing the effects of the issue Of bonds and the re-
latter process-and not the former-that by
substituting in the treasury United States
notes and treasury notes for gold increased by
their amount the money which was in the first
instance subject to ordinary government ex
pendIture.
Although the law compelling an increased
purchase Of silver by tn government was
passed on the Gath day OF July, 1885, with
Of gold from the treasury upon the notes
given in payment OF such purchases did not
ing that date tho Withdrawals upon both these
notes and United States notes increased very
largely and have continued to such an extent
that since the passage Of that law there has
been more than thirteen times as much gold
taken out of the treasury. upon United States
chases ~ was thus Withdrawn during the
eleven and half years Immediately prior
thereto and after the first day Of January,
1875, when specie payments were resumed