The Coconino weekly sun. [volume] (Flagstaff, Ariz.) 1891-1896, 1895-12-12

ed for tho redemption and retirement Of these
notes, another statue was passed forbiddins
their further cancellation and retirement
Some of them had, however, been previously
redeemed and Cancelled upon the issue of add.
tional national bank circulation. as permitted
by the law OF 1879, SO that the amount out.
standing ut the time of the passage OF the ac
forbidding their further retirement was s3S,.
6Si ,0l6. The law Of 1873 did not stop at dis.
tinct prohibition, but contained, in addition
the following provision: And wher
any OF said notes may be redeemed OF
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 destroyed. but they
shall be retssued and made out again and kept
in circulation. This was the condition of af.
fairs on the lst day Of January, 1879. which had
been fixed upon four years before as the date
for entering upon the redemption and retire.
ment Of all these notes, and for which such
abundant means had been provided. The gov
eminent was put In the anomalous situation OF
owing to the holders of these notes debts pay
able in gold on demand, which could neither be
retired by receiving such notes in discharge OF
obligations due the government, nor Cancelled
by actual payment in gold. 1t was forced to
redeem without redemption and to pay without
acquittance.
There has been issued and sold sos ,5O) 900 of
the bonds authorized by the resumption act
OF 1873, the proceeds Of which, together with
the gold In the treasury, created q gold
fund deemed sufficient to meet the demands
which might be made upon 1t for the redcmp-
tion OF the outstanding Un!.hd 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, 900 has
been regarded as an adequate amount to &C
complish its object. This fund amounted on
the LIST day Of January, 1879, to $Ilil90, 1885
and though thereafter constantly fuctuating.
1t did not fall below that sum In July. 1892 In
April, 1898, for the first time since its estaD-
lishment, this reserve amounted to less than
sioo.0OO0 900, containing at that date only s97,-
OH 1880. In the meantime and in July 1920 an
act had been passed directing large govern
mental monthly purchases Of silver than had
been required under previous laws and provid-
ing that in payment for silver treasury notes
Of the United States should be issued payable
on demand in gold or silver coin at the discre-
tion OF the secretary OF the treasury, II was
however, declared in the act to be the estab-
lished policy Of the United States to maintain
the two metals on o parity with each
other upon the present legal ratio, or
such ratio as may be provided by law.
In view Of this declaration it was not deemed
permissible for the secretary OF the treasury
to exercise the discretion In terms conferred
on him by refusing to pay gold on these notes
when demanded, because by such discrimina-
ton in favor Of the gold dollar the so-called
parity Of the two metals would be destroyed
and grave and dangerous consequences would
be precipitated by Affirming or accentuating
the constantly widening disparity between
their actual value under the existing ratio.
These obligations are the instruments which
ever since we have had gold reserve, have
been used to deplete 1t.
This reserve, as has been stated, had fallen
In April, 1893 to s97, OH ,33h It has from that
time to the present, with very few and i'm
portant movements, steadily decreased, except
as 1t has been temporarily replcnished by the
sale Of bonds Among the causes for this con-
slant and uniform shrinkage in this fund may
be mentioned the falling on OF exports unGer
the operation Of the tariff law until recently In
force, which crippled our exchange Of COM
modities with foreign nations and necessitated
TO some extent the payment Of our balances in
gold the unnatural infusion Of silver into our
and the increase in agitation
Tor It's free and unlimited coinage
which have created apprehension as to our dis
position or ability to continue gold payments,
the CONSEQUENT boarding Of gold at home and
the stoppage OF investments of foreign ca. ital
as well as the return Of our securities already
sold abroad and the high rate OF foreign ey-
,hange, which induce the shipment of our god
10 be drawn against us as q matter OF specula
lion. In consequence Of these conditions the
gold reserve on the 1st day OF February, 1894,
was reduced to s65, 1887, having lost more
han SSI.'0),O)O during the preceding nine
months, or since April, 1891. It's replenishment
being necessary and no other manner OF &C.
,omplishing 1t being possible, resort was
lad to the Issue and sale of bonds pro-
'iGed for by the resumption act of 1873
Fifty millions OF these bonds were sold, yield
ng sb3, 653, 295.7l. which was added to the re-
'erve fund Of gold then on hand. As result
II this operation this reserve. which had suf-
cred constant and large Withdrawals In the
meantime. stood on the 9th day OF March. 1891,
1t the sum OF sl07, 4i6,S), Its depletion was,
however. Immediately thereafter so accelerated
hat on the 3Jth dav OF June, 1891, 1t had fallen
% s64.s73o2j, thus losing by Withdrawals more
han 81, O,W0 in five months and dropping
slightly below this situation when the sac Of
S0OoO,000 in bonds was effected for its redemp-
ion. This depressed condition grew worse.
md on the 18th day Of November, 1894,
'ur gold reserve was drained to 81, 3d. OF.
t became necessary to again strengthen IT.
This was done by another sale of bonds
to $50, 900, from which there was
called $3.50 800 with which the fund was in
reased to Sill ,Oi2,02l on the ith day OF De-
ember. 1891 Again disappointment awaited
he anxious hope for relief There was not
wen lull in the exasperating Withdrawals of
odd On the contrary, they grew larger and
more persistent than ever. Between the 9TH
lay OF December, 1891, and early in February,
sos. period of scarcely more than two
months after the second reinforcement Of our
old reserve by the sale Of bonds IL had lost
" such Withdrawals more than 800 900, 900, and
lad fallen to 81 ,03,I8l. Nearly Si3 900 JOj had
'een withdrawn within the month Immediately
this situation
In this emergency, and In view of Its sur
ounding perplexity. 1t became entirely appar-
mt to those upon whom the struggle for safety |
vas devolved not only that our gold reserve |
must, for the third time In less than thirteen |
months. be restored by another issue and sale |
4 bonds bearing rate of interest and badly |
uited to their purpose. but that a plan must |
e adopted for their disposition promising bet
err results than realized on the previous sales. |
IN agreement, therefore, was made with |
lumber Of fnanciers and bankers whereby |
was stipulated that bonds de- |
cribed in the resumption act of 1878 |
ayable In coin thirty years after their date, |
earring interest at the rate OF per cent per |
mum and amounting to about 49,, 900, OOO |
hould be exchanged for gold, receivable by |
'eight, amounting to o little more than $685. |
10000. Its good results could not be perma- |
emit Recent Withdrawals have reduced the |
eserve from 1871 $50 on the 9th day Of July,
s9i, to $40, 1886, 1856
On the 2sth Of January. 1895, 1t was reported |