The herald., 1895-08-17
TO THE EDITOR
Gold Run on the U. S. Treasury
r. NJ wIDNEY OF Los ANGELES


United States are getting most effective
object lesson in finances, and it seems
that nothing but such lessons can ever
teach them anything relating to public
matters.
Tho people elect persons who make in
efficient laws, and shrewd financiers ad.'
Just their operations accordingly, and
make money out OF the people. The
people are to blame, and not the sharp
tinanciers, except In so lar as they pro-
cure the enactment OF tad laws.
The raid for goli is ossed on the fact
that tinanciers can at pleasure run in cur
reucy and take out gold, and then resell
the gold to the United States treasury for
premium. and again run in currency
for gold at par and resell the gold at a
premium. 1t ought not to require much
mat hematical sense to show anyone that
this process continued long enough would
break all the nations OF the earth. The
sale Of bonds to meet such runs is
financial absurdity and robbery.
The defect is in our financial system of
laws and not in the gold or silver ques-
tion. Our laws furnish no power to the
treasury either to stop che run or to en-
able it to legitimately replenish the gold
at par instead of at a. premium.
So far as we can see at present no effort
is being made by the treasury depart
ment to procure any defensive or protec-
tive legislation that would meet the case.
In the financial system proposed by me
and which [ have been advocating for
several years past, are provisions which
furnish complete remedy for the detects
in the law referred to. and which l intro
duced in the system to cover the existing
defects. The section is as follows:
Sec. 8. That the secretary OF the treas
u,;kL tt,a al of a mr.
may from time to time make such rules
and regulations for the exchange of goln,
silver and currency. at the treasury or
any subtreasury of the United States,
in sums of not less than $500, as the in
teiests of the people may require. Such
premium to be paid on gold or silver
taken from the treasury or suttreasury,
for export; said rules and regulations
may also at any time require that the
gold or silver or any part thereof taken
from the public lands of the United
States, or from any lands hereafter sold
or patented by the United States. snail
be sold to the United States at its market
value; and there is hereby reserved to the
government the prior right to buy all
or any part of such gold o. silver for
public use at its market value. and shall
Such rules and regulations may further
provide that each banking corporation
formed under the laws of the Unied
States, and receiving the benefit OF such
laws. shall at such times as may be
ordered forward to the United States
treasury, or any subtreasury designated,
at the expense of the United States,
such percentage of the gold or silver
held by such bank as may be named in
such rules and regulations. or as may be
designated in any sepcial order and shall
receive in exchange therefor legal tender
currency.
Such rules and regulations may also
provide for establishing a system of clear
ing international commercial balances,
under which the balances due between
domestic and foreign clearing houses
or specified banks, may be deposited to
the credit of such clearing houses or
banys in the United States treasury.
Provided that all foreign balances due the
United States treasury hereunder shall
be deposited in the custody OF the debtor
nation.
This first gives the secretary. of the
treasury power to protect the interests
of the people from cold blooded gold
runs for purely speculative purposes, and
limits the exchange of currency for gold
to legitimate business demands IN the
interests of the general public. When
gold is taken for export premium can
be charged by the treasury If required.
All foreign nations reserve and exercise
only known power where free gold can
be had on demand, witohut power to stop
it. This section also provides that the
government shall have the prior right to
buy all or any part of the gold and silver
taken from mines on the public lands or
lands hereafter patented.
As the laws are at present, most OF our
gold and silver mines are owned by for
eigners and the bullion taken out is ship.
ped abroad. Our nation is thus spec
tacle of stupidity, giving its gold and sill
ver away to foreigners for the simple cost
of mining, and our nation starving for
the gold and silver. The foreigners are
not to blame for this, but our legislators
who have been putting in their congress
sional time in poker and horse races are
criminally cul pable and the voters who
elect them are almost as much to be CEN
sured.
This section also provides that national
banks, which are the creatures Of the law !
and which have no notes to redeem in
gold, shall on demand furnish the Uii.ei
States treasury with percentage of all
gold on hand. AS the law now is any or
all OF these banks can mbine and run
in United States currency on the treasury
for gold. g creatures of the government
they now have power to suck the life
blood out Of the government. Under my
provisions above they cease to be enemies
to the general government ana become a
cooperating power with the natlCn Tor
the general good. Under my system as
whole the national banks could never
have gold rrn on them, for they would
only handle United States currency for
the redemption or which they would have
no res possibility. ana all of their depos.
its and obligations would be payable in
United States legal tender currency.
Their only gold Obligations would be to
aid the United States treasury in case of
need with percentage OF their gold
holdings.
The latter part of the section provides
fol- an international clearing for com
mercial balances. The effect OF this wolld
be to reduce the demand for gold fol- ex-
mort to d minimum, and thus lessen the
demand on all parties for its use.
The enactment OF the section alone
would knock the speculative use of gold
out entirely and would be of infinitely
more value to the general public than
anv free coinage Of silver.
The greatest difficulty in our finances
is the defective legislative system under
which our money is operated, and not so
much in tie Kind of material out of
which our money is made.
But do the people who are running our
governmental machinery want it i'm
proved or do they want to keep IT in its
present or some other defective condition
for the purposes of robbery?
n.~.l ..wt~k