The record-union., 1895-12-04

ton of the question of paying the ex-
penses of Government with their pro-
ceeds. There was no necessity to con-
slider that question. At the time of each
bond issue we had safe surplus in the
Treasury for ordinary operations, ex-
elusive of the gold in our reserve.
In February, 1894, when the first is
sue of bonds was made, such surplus
amounted to over S1S,000.000 In No
vember, when the second issue was
made, it amounted to more than $42,-
100000 In February, 1895, when
bonds for the third time were issued
such surplus amounted to more than
S100,000,O00- 1t now amounts to S9S,-
or, ,430 80.
Beside all this, the Secretary of the
Treasury has 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 regarding the effects
of the issue of bonds, and the results
of the withdrawal of gold.
1t was the latter process and not the
former that, by substituting in the
Treasury UnitedStateS notes and Treas
ury notes for gold, increased the amount
of the money, which was in the first
instance subject to ordinary Govern
ment expenditures. Although the law
compelling an increased purchase of sill
the 18th day of July, 1890, withdraw
ais of gold from the Treasury upon the
notes given in payment on such pur-
chases, did not begin until October, 1891
Immediately following that date, the
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 and Treas
ury notes issued for silver purchases, as
was thus withdrawn during the eleven
and a half years Immediately prior
thereto and after the first day of jan
uary 1879, when special payments were
resumed.
FINANCIAL PERPLEXITIES.
1t is neither unfair nor unjust to
charge a large share of our present
financial perplexities and dangers to
the operation of the laws of 1870 and
1890, compelling the purchase of silver
by the Government, which not only
furnished a new Treasury obligation
upon which its gold could be with
drawn, but so increased the fear of an
overwhelming flood Of silver, and a
forced descent to silver payments, that
even the repeal of these laws did not
entirely cure the evils of their exist
ence.
While 1 have endeavored to make a
plain statement of the disordered con-
ditiOn of our currency, and the present
dangers menacing our prosperity, and
to suggest way which leads to a safer
financial system, l have constantly had
in mind the fact that many of my
countrymen, whose sincerity I do not
doubt, insist that the cure for the ills
now threatening us may be found in
the single and simple remedy of the
free coinage of silver. They contend
that our mints shall at once be thrown
open to the free, unlimited and indie
pendent coinage of silver, both gold and
silver dollars Of full legal tender quail
ity regardless of the action of
any other Government, and in
full view of the fact that the ratio
between the two metals, which they
suggest calls for 100 cents worth of
gold in the gold dollar at the present
standard and only 80 cents in intrinsic
worth Of silver in the silver dollar.
A DANGEROUS EXPERIMENT.
Were there infinitely stronger rea-
sons that can be adduced for hoping
that such action would secure for US
bimetallic currency, moving on lines of
parity. An experiment so novel and
hazardous as that proposed might well
stagger those who believe that stabil-
money. No Government, no human
contrivance, or act Of legislation, has
ever been able to hold the two metals
together in free coinage, at a ratio ap-
preciably different from that which is
esta abGShed in the markets of the world.
Those who believe that our independ-
ent free coinage of silver at an arti-
fetal ratio of IS to1 would restore the
parity between the metals. and cOnSe-
hp n
unsupported and improbable theory to
the general belief and practice Of other
nations, and to the teaching of the
wisest statesmen and economists of the
world, both in thepast and present, and
what is far more conclusive, they run
counter to our actual experiences.
Twice in our earlier history our law
makers, in attempting to establish a BIZ
metallic currency, undertook free coin
age upon a ratio which accidentally
varied from the actual relative values
OF the two metals, not more than per
cent. in both cases. Notwithstanding
greater difficulties and cost of trans
portatiOn than now exist, the coins
whose intrinsic worth was undervalued
in the ratio, gradually and surely dis
appeared from our circulation, and went
to other countries where their real value
was better recognized Acts of Congress
were impotent to create equality where
natural causes decreed even a Slight in
equality. Twice in our recent history we
have signally failed to raise by Iegisla-
ton the value Of silver. Under an Act of
Congress passed in 1873 the Govern
ment was required for more than twelve
years to expend annually at least $24,-
000 600 in the purchase of silver bullion
for coinage.
The Act of July IA, 1890, in still bold
er effort, increased the amount of sill
yer the Government was compelled to
purchase and forced it to become the
buyer annually of 54,000,000 ounces, or
practically the entire product of our
mines Under both laws silver rapidly
and steadily declined in value
The prophecy, and the expressed hope
and expectation of those in Congress
who led in the passage of the last men
tened Act, that it would re-establish
and maintain the former parity between
the two metals, are still fresh in our
memory.
MAINTAINING PARTY.
In the light of those experiences,
which accord with the experiences of
other nations, there is certainly no Sc
cure ground for the belief that an Act
of Congress couIA now bridge an in
equality of fifty per cent. between gold
and silver at our present ratio, nor is
there the least possibility that our
country, which has less than one
seventh of the silver money of the
world, could by its action alone raise
not only our own but all silver to it's
lost ratio with gold.
Our attempt to accomplish this by
the free coinage of silver at a ratio diff
fering widely from their actual relative
value, would be the signal for the COM
pIete departure of gold from our circu-
Iation. the immediate and large con-
traction of our circulating medium, and
a shrinkage in thereal value and none
tary efficiency of all other forms of cur
rency. as they settled to the level of