The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1895-12-04
PRESIDENTS MESSAGE
TContinued from Second Page. |


of the United States and dispose of
them for coin and to use the proceeds
for the purposes contemplated by The
State. In May, 1878, and before the
date thus appointed for the redemp-
tion and retirement of these notes an
other statute was passed forblddlng
their further cancellation and retire
ment. Some. of them had, however,
been previously redeemed and cancell-
ed upon the issue of additional nation
al bank circulation as permitted py
the law of 1875, so that the amount OUT
standing at the time of the passage OF
the act forbidding their further retire
ment, was S346, 6Sf ,016. The law OF
1878 did not stop at distinct prohibl-
ton. but contained, in addition, the
following express provision: And
when any of said notes may be redeem
ed or be received into the Treasury,
under any law, from any source what
ever. and shall belong to the United
States. they shall not be retired, cam
celled or destroyed, but they shall be
re-issued and paid out again and kept
in circulation"
This was the condition of affairs on
the 1st day of January, 1879, which
had been fixed upon four years before
rs the date for entering upon the re-
demption 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
holders of its notes, debts payable IN
pold on demand. which could nelthef
be retired by receiving such notes III
discharge of obligations due the gov
eminent, nor cancelled by actual pay
ments in gold. 1t was forced to re-
deem them without redemption and to
pay without acquittance.
THE GOLD RESERVE.
There had been issued and sold $685.
100000 of bonds authorized by the re-
sumption act of 1873, 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
time in the Treasury available for the
same purpose, has been since called
our gold reserve, and S10O, 0OO,O0O mas
been regarded as an adequate amount
to accomplish its object. TINS tuna
amounted on the first day OF January,
1879. to $114. 193, 400, and though there
after constantly fuctuating, it did not
fall below that sum until July, 1852. In
April, 1898, for the first time since It's
establishment, this reserve amounted
to less than Si00.0na.000. containing at
tnat date only S97,011, $50. In the mean
time. and in July, 1890, an act had
been passed directing larger govern
mental monthly purchases OF silver
than had been required under previous
laws, providing that in payment Tor
such silver, treasury notes OF the United
States should be issued, payable on de-
mand in gold or silver coin, at the dis
erection of the Secretary of the Treas
ury. 1t was, however, declared In the
act to ''be the established policy OF 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 declaration it was not
deemed permissible for the Secretary
of the Treasury to exercise the discfe-
ton in the terms conferred on him by
refusing to Pay the gold on these notes
when demanded, because by such DIS
elimination in favor OF the gold dollar
the so-calied parity of the two metals
would be destroyed and dangerous con-
sequences would be precipitated by at
firnaiDg or aeceDtuating the constant
ly widening disparity between their
actual value under the existing ratio.
1t thus resulted that the treasury
notes issued in payment OF silver pur-
chases under the law of 1890 were ne
cessarily treated as gold obligations,
at the option of the holder. These
notes on the first day of November,
1898, when the law compelling the
monthly purchase uf silver was re-
Dealed, amounted TO more than $780,
5000. The notes of this description
now outstanding added TO the United
States notes still undiminished by re-
demption or cancellation constitute a
volume of gold obligations amounting
to nearly S50O,000.O00. These obliga-
tions are the instruments which, ever
since we have had gold reserve, have
been used to depiete it.
THE ISSUE OF BONDS.
This reserve, as has been stated, bad
fallen in April. 1893, to 1901 $3.50. 1t
has from that time 10 the present.
with very few and unimportant up
ward movements steadily decreased,
except as it has been temporarily re-
pienished by the sale OF bonds. Among
the causes for this constnat and uni
form shrinkage in this fund may be
mentioned the great falling off OF eX-
ports under the operation of the tariff
law, until recently in force, which Grip
pied our exchange of commodities
with foreign nations and necessitated
to some extent the payment of our bal
ances in gold; the unnatural infusion
of silver into our currency, and the in
creasing agitation for its free and UNI
limited coinage. which have created
apprehension as To our disposition or
ability to continue gold payment; the
consequent boarding of gold at home
and the stoppage of investments of
foreign capital, as well as the return
OF our securities already sold and the
rate of foreign exchange which in
duced the shipment of our gold to be
drawn against. as "a matter of specula-
tion. In consequence of these condi-
tons the gold reserve on the first day
al February 1904 WAS raduppd TIA S65 =