The Portland daily press., 1895-11-27
THE REVENUE AND THE GOLD RE
SERVE.

In his speech to the Portland Club on
Monday evening Congressman Dingley
showed very plainly that the fundamental
trouble with the treasury, and The bottom
cause of the difficulty in keeping up the
gold reserve was the failure of the reve-
nue. to meet the expenses of the govern
ment While the law says that the green
backs received by the treasury shall be
| relssued it does not say tina t this shall be
done Immediately. and as matter of fact
1t never was done Immediately until the
revenues Of. the government began to fall
below the necessary amount. But since
Carlisle has been Secretary greenbacks
they..went out again to pay current ex-
penses. The truth is that while the bond
issues have been ostensibly for the bene
tit of the gold reserve large part of the
proceeds have, as matter of fact, been de-
voted to the payment of the expenses of
the government When bonds were sold
the gold proceeds were deposited to the
credit of the reserve fund. But when the
gold began to be drawn out the green
backs with which it was drawn were paid
out to meet current expenses. Under
ordinary conditions these greenbacks
would have been retained for q time in
the treasury until there was demand
for them and then, they would have been
paid out in exchange for gold. But the
lack of reserve made it necessary to pay
out the greenbacks as fast as they were
received for current expenses, and thus
the volume of greenbacks in circulation
was always kept at the maximum, and
the treasury had nothing to attract gold.
That lack of revenue was the real cause
Of the Secretary's trouble is shown clearly
enough by thu fact that it never happened
before. While the revenues were in excess
of expenses the government never had any
difficulty in maintaining the gold reserve
but as soon as they fell below, it's means
of getting gold was gone because it had
to pay out the greenbaoks as fast as it
got them for current expenses.
There is good deal to be said against
the governments standingEbehind the cur
rency and being responsible for it, and
so there is merit in Secretary Carlisle's
plan of turning the business Of currency
issuing over to the banks. But, as Con-
gresham Dingley points out, the adop-
ton of that plan would not cure our
present difficulties. Before the green
backs can be called in plan must be de-
vised to supply their, place, and then they
can be called in but very slowly. A sud
den contraction of the currency to the
amount of the greenback circulation
would precipitate worse panic than any
the country has seen in recent years. If
the change suggested by Secretary Car
Isle is made a all, it must be made very
gradually, SO gradually that Its effect
upon our present difficulties would be
scarcely perceptible Our existing trouble
is lack Of revenue and it cannot be cured
except by making up the deficiency, and
when that deficiency is supplied the
"endless chain'' which Carlisle harps on
will not do any mischief, and very likely
the demand for the retirement of the
greenbaoks will disappear. There is
something great deal more important
to be done now than to change our our
ency system according to Carlisle's
suggestion. First and foremost the
revenue system needs amendment SO that
it will produce surplus instead of de-
f1cienoy