The Kootenai herald. [volume] (Kootenai, Idaho) 1891-1904, 1895-12-07

al CIRCULATION was issued to natiOna
banks, to retire United States notes equa
IN amount to 50 per cent of such addition
: al bank circulation until such notes wer
reduced to S300,0000O0. This law furthe
provided that on and after the first da,
OF January, 1879, the United States note.
then outstanding should be redeemed il
coin, and in order TO provide and prepar,
Ior SUCH redemption the secretary of tn,
treasury was authorized not only to rs,
any surplus revenues of the government
but to issue bonds of the United States
and dispose of them for coin and to use
the proceeds for the purposes contem-
plated by the statue.
In May, 1873, and before the day thus
appointed for the redemption and retire
ment OF these notes another statute was
| passed forbidding their further cancella-
ton and retirement Some of them had
| however, been previously redeemed and
Cancelled upon the issue of additional ma
| uonal bank circulation as permitted bv
| the law OF 1875, so that the amount obtain
ing at the time Of the passage of the act
| torbidding their further retirement was
~o4o'6el ,Ol6. The law of 1878 did not stop
| at distinct prohibition but contained in
| addition the following express provision.
And when any of said notes may be
redeemed or be received into the treas
ury under any law from any source what
| ever and shall belong to the United States
they shall not be retired, uncalled or
destroyed, but they shall be reissued and
PAID out again and kept in circulation"
WHY GOLD DISAPPEARS.
rms was the condition of affairs on the
Irst DAY OF January, 1879, which had been
tXed upon four years before as the date
Tor entering upon the redemption and re-
urement of all these notes and for which
sucn abundant means had been provided.
Inc government was put in the anomalous
situation of owing the lenders of its
notes debts payable in gold on demand
Wnlch could neither be retired by re-
ceivfng such notes in discharge of obli-
cations due the government nor Cancelled
by actual payment in gold. 1t was forced
TO redeem without redemption and to nav
without acQuittance.
There has been issued and sold s95. 5000
600 of the bonds authorized by the resumn-
ton act of 1875, the proceeds of which to-
gether with other gold in the treasury.
created a gold fund deemed sufficient to
meet the demands which might be made
upon 1t 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 purpose, has been since called
our gold reserve and 800, 1900 has been
regarded as an adequate amount to ac-
complish its object. This fund amounted
".
1880 and though thereafter constantly
huctuating it did not fall below that sum
until July, 1892. In April, 1898, for the
first time since its establishment this
reserve amounted to less than 100000 900,
containing at that date only S97,O11, $3.50.
REDEMPTION IN GOLD.
In the meantime and in July, 1890, an act
had been passed directing larger govern
mental monthly purchases of silver than
had been required under previous laws,
and provided that in payment for such
silver treasury notes of the United States
should be issued payable on demand in
gold or silver coin al the discretion of the
Of the treasury. II was, how
ever, declared in the act to be the estab-
ished policy of the United States to MAIN
ain the two metals on a parity with each
'ther upon the present legal ratio or such
alto as may be provided by law"
In view of this declaration it was not
leemed permissible for the secretary of
he treasury to exercise the discretion in
he terms conferred on him by refusing
o pay gold on these notes when demand
ID, because by such discrimination in IA
'or of the gold dollar the so-called parity
Il the two metals would be destroyed and
rave and dangerous consequences would
re precipitated by affirming or accentuat-
ng the constantly widening disparity be-
ween their actual values under the exist
lg ratio.
1t thus resulted that the treasury notes
isued in payment of silver purchases I'M
er the law of 1890 were necessarily treat
as gold obligations, at the option of the
older.
These notes on the first of November.
'5S, when the law compelling the monthly
urchase of silver was repealed, amounted
} more than S155,O00,OOO. The notes of
his description now outstanding, aMed
} the United States notes still undinin-
he'd by redemption or cancellation con-
1tuted a volume of gold obligations
to nearly $500 100000 These OBJ
cations are the instruments which, ever
nee we have had a gold reserve, have
cen used to deplete it.
The reserve. as has been stated, had
lllen in April, 1898, to $97, oh, 1896. 1t has
ON that time to the present, with very
w and unimportant upward movements
eadily decreased except when IL has
zen temporarily replenished by the sale
bonds.
OTHER CAUSES OF SHRINKAGE.
Among the causes for this constant
I'd uniform shrinkage in this fund may
mentioned the great falling off of ex-
rts under the operation of the tariff
W until recently in force, which crippled
+ exchange Of commodities with foreign
tons and necessitated to some extent
e payment of our balance in gold. The
natural infuxion of silver into our coun-
ana the increasing agitation for its
e and unlimited coinage, which have
lated apprehension as to our disposition
ability to continue gold payments, the
lsequent boarding of gold at home and
stoppage of investments Of foreign
)ltaL as well as the shipment of our
d TO be drawn against, as a matter of