The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1895-12-04

1878, and before the date thus appoint
ed for the redemption and retirement
of these notes, another statute was
passed forbidding their further cam
collation. and retirement Some of
them had, however. been previously re-
deemed and cancelled upon the issue
of ADDITIONAL national bank circulation,
as permitted by the law of 1875. so
that the amount outstanding at the
time of the passage of the act forbid
ding their further retirement was $685.
6S1, 016.
THE LAW OF 1878.
The law of 1878 did not stop at dis
tinct prohibition, but contained in adj
dition 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
whatever and shall belong to the
United States, they shall not be re-
tired, cancelled or destroyed. but they
shall be issued and paid out again and
kept in circulation" This was the con-
dition of affairs ON the LIST day of jan
uary, 1879, which had been fixed upon
four years before as the date for enter
ing upon the redemption and retire
ment of all these notes and for which
such abundant means had been pro-
vided. The government was put in the
situation of owing to the holders of
its notes debts payable in gold on
demand which could neither be re-
tired by receiving such notes in dis
charge of obligations due the govern
ment nor cancelled by actual payment
In gold. 1t was forced to redeem with
out redemption and to pay without
acquittance.
r. IyTT
There had been issued and sold $685.
50O,0 900 of the bonds authorized by the
resumption act of 1875, 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 $10O,0O0OOO has
been since regarded as an adequate
amount to accomplish its object. This
fund amounted on the 1st day of JAM
uary, 1879. to $114 49,, $50, and though
thereafter constantly fuctuating, it did
not fall below that sum until July, 1892
In April, 1893, for the first time since
its establishment, this reserve amount
ed to less than $10O,OO0000, containing
at that date only s97,011, $3.50.
THE SHERMAN Law.
In the meantime and in July, 1890, an
act had been passed direeting larger
monthly purchases of silver than had
been required under previous laws and
providing that in payment for such
silver, treasury notes of the United
States should be issued, payable on
demand in gold or silver coin
at the discretion of the sec
rotary of the treasury. It 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"
DISCRETION OF THE SECRETARY
OF THE TREASURY.
In view of this declaration it was not
deemed permissible for the secretary
OF the treasury to exercise the discre-
ton In terms conferred on him by re-
fusing to pay gold on these notes when
demanded, because by such discrim-
lnatton in favor of the gold dollar, the
so-called parity of the two metals
would be destroyed and grave and dan
gerouS consequences would be precpi-
tated by affirming or accentuating the
constantly widening disparity between
their actual values under the existing
ratio.
TREATED AS GOLD OBLIGATIONS.
1t thus resulted that treasury notes
issued in payment of silver purchases
under the law of 1890, We're necessarily
treated as gold obligations, at the OPP
ton of the holder. These notes on the
1st day of November, 1893, when the
law compelling the monthly purchase
of silver was repealed, amounted to
more than s155,000,0O0. The notes of
this description now outstanding, add
ed to the United States notes still I'M
diminished by redemption or capcella-
ton. constitute a volume of gold OBJ
legations amounting to nearly $500, 000-
600. These obligations are the instru-
ments which, ever since we have had
gold reserve, have been used to deplete.
THE FALLING GOLD RESERVE
This reserve, as has been stated, had
fallen in April 1898, to $97,011,330 1t has
from that time to the present, with very
few and unimportant upward move
ments. steadily decreased except as it
has been temporarily replenished by
the sale of bonds.
CAUSED THE SHRINKAGE.
Among the causes for this constant
and uniform shrinkage of this fund,
may be mentioned the great falling off
of exports under the operations of the
tariff law until recently in force, which
crippled 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 it's free and I'M
limited coinage, which have created ap-
prehension as to our disposition or
ability to continue gold payments; the
consequent boarding of gold at home,
and the stoppage of investments of for
eign capital, as well as the return of
our securities already sold abroad; and
the high rate OF foreign exchange.
which induced the shipment of our
gold to be drawn against, is a matter
of speculation.
ISSUE AND SALE OF BONDS.
In consequence of these conditions,
the gold reserve on the first day Of
February, 1894 was reduced to SG5, 43S,-
377, having lost more than S3l. 900 1000
/ during the preceding nine months, or
since April, 1898, It's repienishment be.
ing necessary, and no other manner of
ACCOMPLISHING it being possible, resort
was had to the issue and sale of bonds
provided for by the resumption act of
1875. Fifty million of these bonds
were sold, yielding $685. 633, 295.1, which
was added to the reserve fund of gold
then on hand. AS a result of this oper-
alton this reserve. which had suffered
constant and large Withdrawals in the
meantime, stood on the 9Th day of
March, 1894, at the sum of s1O7 1902.
It's depletion was, however. immediate
" thereafter so accelerated that on the
S0th day of June, 1894, it had fallen to
| sS4 S73. 025. thus losing by Withdrawals