Middletown transcript., 1895-12-07

The compulsory purchase and coinag
Of silver by the government, unchecked
and unregulated by business conditions
and needless Of our currency needs, whicl
for more than Is years diluted our circu
lating medium, undermined confidence
abroad in our financial ability and at las
eliminated in distress and panic at home
have been recently stopped by the repeal O.
the laws which forced this reckless schem.
upon the country.
The things thus accomplished, notwith
standing their extreme Importance ani
beneicent effects, fall far short of curing
the monetary evils from which we suffel
as result OF long indulgence in Ill ad
vised financial expedients.
United States Notes.
The currency denominated United
States notes and commonly known al
greenbacks was issued in large volume
during the late civil war and was intend.
ed originally to meet the exigencies Of that
period. 1t will be seen by reference to
the debates in congress at the time the
laws were passed authorizing the issue Of
these notes that their advocates declared
they were intended for only temporary use
and to meet the emergency of war. In
almost II not all the laws relating to them
some provision was made contemplating
their voluntary or compulsory retirement.
A large quantity of them, however, were
kept on foot and mingled with the cur
rency of the country, SO that at the close
of the year 1874 they amounted to 1881,
999,O73.
Immediately after that date and in jan
uary, 1876, law was passed providing for
the resumption Of specie payments, by
which the secretary of the treasury was
required, whenever additional circulation
was issued to national banks, to retire
United States notes equal in amount to
80 per cent of such additional national
bank circulation until such notes were re-
duced to $500, 900, COO This law further
provided that on and aftor the 1st day of
January, 1879, the United States notes
then outstanding should be redeemed in
coin, and in order to provide and prepare
for such redemption the secretary Of the
treasury was authorized not only to use
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 contemplated
by the statute.
In May, 1878, and before the date thus
appointed for the redemption and retire
ment of these notes, another statute was
passed forbidding their further cancella-
tion and retirement Some of them had,
however, been previously redeemed and
Cancelled upon the issue of additional ma
tional bank circulation, as permitted by
kho 1or1 Of kho
at the time of the passage Of the
act forbidding their further retirement
was s346 681, ,O16.
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 treasury
under any law, from any source whatever,
and shall belong to the United States,
they shall not be retired, Cancelled or de-
stroyed, but they shall be reissued 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 as the date
for entering upon the redemption and re-
tirement Of all these notes, and for which
such abundant means had been provided.
The government was put in the anoma-
lous situation of owing to the holders OF
It's notes debts payable in gold on demand,
which could neither be retired by receiv-
ing such notes in discharge Of obligations
1ue the government nor Cancelled by ac-
iual payment in gold. 1t was forced to
redeem without redemption and to pay
without acquittanoe.
The Gold Reserve.
There had been issued and sold $685.
500, 600 of the bonds authorized by the re-
act of 1875, the proceeds of
which, together with other gold in the
treasury, created gold fund deemed suf- |
loient to meet the demands which might |
,e made upon it for the redemption of the |
outstanding United States notes. This |
und. together with such other gold as |
night be from time to time in the treas |
Try available for the same purpose, has
,een since called our gold reserve, and |
100, 900, 900 has been regarded as an ade- |
Iuate amount to accomplish It's object. |
This fund amounted, on the 1st day Of |
January, 1879, to $114, 1913, $50, and,
hough thereafter constantly fuctuating,
t did not fall below that sum until July,
892. In April, 1893, for the first time |
ince its establishment, this reserve /
mounted to less than 500, 900, 900, con-
aiming at that date only $97, oil, $50.
In the meantime, and in July, $780, an
ct had been passed directing larger gov
rnmental monthly purchases Of silver
han had been required under previous
avs and providing that in payment, for
uch silver treasury notes of the United
tates should be issued payable on demand
n gold or silver coin at the discretion Of
he secretary of the treasury 1t was,
owever, declared in the act to be "the
established policy of the United States to
maintain the two metals on parity with
aoh other upon the present legal ratio
r such ratio as may be provided by law"
q view of this declaration, it was not
semed permissible for the secretary of
be treasury to exercise the discretion in
arms conferred on him by refusing to nay
old on these notes when demanded, be-
ause by such discrimination in favor of
he gold dollar the SO called parity of the
no metals would be destroyed, and grave
nd dangerous consequences would DO
by affirming or accentuating
1e constantly widening disparity between
heir actual values under tho existing
tito.
1t thus resulted that the trca sury notes
sued in payment of silver purchases un-
er the law of 1890 were necessarily treat
] as gold obligations. at the option of the
older. These notes on the 1st day of No
smber, 1898. when the law compelling
,e monthly purchase of silver was re-
ealed. amounted to more than S155, 900,
DO. The notes of this description now
1tstanding added to the United States
otes still undiminishcd by redemption or
sncellation constitute { volume of gold
Dligations amounting to neariy $780,
10. 000 These obligations are the instru
tents which, ever isince we have rad a
Did reserve, have been used to depleie it
This reserve, as has been stated. had
lllen in April, 1893 to s97,0Il. $50. It
Is from that time to the present, with
sry few and unimportant upward move-i
ents. steadily decreased. except as it has
BEN temporarily replenished by the sale
bonds
The Bond Issues.
In consequence of these conditions the
I'D reserve on the 1st day of February,
'94, was reduced to $50, 438, 377, having
st more than $31, 600, 900 during the pre-
ding nine months, or since April 1898.
8 replenishment being necessary, and no