The Seattle post-intelligencer. [volume] (Seattle, Wash. Terr. [Wash.]) 1888-1914, 1895-12-04

al bank circulation until such notes were
reduced % s@o ea.g 90. This law further
provided that n and after the first day
( or January. 1879. the United States notes
then outstanding should Be redeemed IN
coin, and in order 70 provide and prepare
for such redemption the secretary OF the
treasury vas authorized not only 70 use
any surplus revenues OF the government.
but 20 issue bonds OF the United States
and GSp0S CT them for coin and 10 use
the proceeds for the purposes contemplat-
ed BY the statute. In May. ISIS. and before
the day thus appointed for the redemption
/. and retirement Of these notes. another
statute was passed forhiddIng their further
( circulation and retirement. Some OF them
had, however, been previously redeemed
and cancelled upon 4 test issue Of addition
al national bank circulation as permitted
by the law Of 1875. 50 that the amount out
standing at the time OF the passage OF
the act ~forbidding their further retirement
was Sis,Slelb. The law Of ISIS did not
stop at distinct prohibition. but contained
in addition the 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, but they
shah be re-issued and paid out again and
kept In circulation" This was the condi-
tion. Of affairs on the first day OF January.
Z 1879, which had been fixed upon four years
before as 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 anomal-
Gus situation of owing the holders Of its
notes debts payable in gold on demand.
which could neither be retired by receiv-
ing such notes in discharge Of obi legations
due the government nor Cancelled by actual
payment in gold. Il was forced to redeem
without redemption and 10 pay without
acquittance.
The Gold Reserve.
There had been Issued and sold $3.50 900
of the bonds authorized by the resumption
Z. ace Of 1875. the proceeds Of which, together
with other gold in the treasury, created q
gold fund deemed sufficient TO meet the de-
mands which might be made upon it for
the redemption of 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 pur-
pose. has since been called our gold re-
serve. and s100. 0O0.O 600 has been regarded as
an adequate amount TO accomplish its OBJ
! ject. This fund amounted on the LIST day
OF January. 1879, TO sl1i. 193. $50, and though
thereafter constantly fiuctuat.ng it did not
fall below that sum until July, 1892. In
April, 1893, for rhe first time since its estab-
lishment, this reserve amounted to less
than 500. 100000. containing at that date
only $97. Oh, $50.
The silver Certificates.
In the meantime. in July, 1890. an act had
been passed directing larger governmental
monthly purchases of silver than had been,
required under previous laws, and provid-
ing that in payment for such silver treas
ury notes of the United States should be IS
sued, payable on demand in gold or silver
coin at the discretion of the secretary OF
the treasury. II 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 pres
ent legal ratio, or such ratio as may be
provided by law" In view of this declara-
ton 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, because by such discrimination
in favor of the gold dollar the so-called
parity of the two metals would be destroy
ed, and grave and dangerous consequences
would be precipitated by affirming or ac-
centuating the constantly widening dispar-
ity between their actual values under the
the existing ratio. 1t thus resulted that the
treasury notes issued in payment Of silver
purchases under the law of 1890 were neces-
sarily treated as gold obligations at the
: option of the holder. These notes on the LIST
Of November. 1898, when the law compeIl-
ing the monthly purchase of silver was re-
pealed, amounted to more than sl55, 100000.
Inc Depietion OF the reserve.
The notes Of this description now out
standing. added TO the United States notes.
still undiminished by redemption or cancel
lation, constitute a volume of gold obliga-
tions amounting TO nearly $500. 000. 900. These
obligations are the instruments which, ever
since we have had a gold reserve, have
been used to deplete il. The reserve. as has
been stated. had fallen in April, 1898. 10
S97.0l $50. II has from that time to the
present with. very few and un.mportant
upward movements. steadily decreased.
except as Ii has been temporarily replen-
ished by the sale of bonds. Among the
causes for the constant and uniform shrink
age in this fund may be mentioned the
great falling off of exports under
the operation of the tariff law IN
til recently in force, which crippled
our exchange of commodities with for
eign nations and necessitated to some
extent the payment OF our balances In gold,
the unnatural influx of silver into our
currency and the increasing agitation for
its use and unlimited coinage which have
created apprehensions as TO our DISPOSE
ton or ability TO continue gold payments;
the consequent boarding of gold at home
and the stoppage of investments of for
eign capital, as well as the return of our
securities already sold abroad. and the
high rate OF foreign exchange. which in
duces the shipment Of our gold to be drawn
against as a matter OF speculation. In con-
sNH A1 w. va HfAEEt AO4A.thAatAkNs liz sun A1
serve on the 1st day OF February. 1894. was
reduced to $50, 43S. having lost more than
S3l o, 600 during the preceding nine months,
or since April. 1893.
The First Bond Issue.
Its replenishment being necessary. and
no other manner of accomplishing It being
possible. resort was had TO the issue and
sale OF bonds provided for by the resump-
ton act OF 1875. Fifty millions OF these
bonds We're sold. yielding s6S. 6S3,2S
which was added 20 the reserve fund OF
gold then on hand. As a 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 sl07,-
1850 lis depletion. however, was imme~
diatelv thereafter so accelerated that on
than 81. 900. G4 in FIVE months. and drop
the a0th day Of June. 1894. il had fallen to
Ei.S73.05. thus losing by withdrawal more
ping slightly below It's situation when he
sale of $5a.000.o 90 in bonds was effected for
its replenishment.
The second Bond Issue.
This depressed condition grew worse. am
on the 24th day OF November. 1874. our gold
reserve being reduced TO s57.s6s. 7al. q; be-
came necessary 10 again strengthen II.
This was done nv another sale OF bonds
amounting TO go on. GO. from which there
was realized $3.50 5n. with which the fund
was Increased to $ltl Al OF on The 4th day
OF December. lSef Again disappointment
awaited the anxious hope OF RELIEF There
was not even a iull in the eXasperat.ng
Withdrawals - gold. on the contrary,
they grew larger and mora -avS5efeuf than