The islander. [volume] (Friday Harbor, Wash.) 1891-1899, 1895-12-12

WAC socIoCaTy OF the treasury was an
thorized, not only to use any surplus
revenues OF the government. but to is
sue bonds of the United States and dis.
pose OF them for coin, and to use the
proceeds for the purposes contemplated
by the statute.
In May, 1878, and before the day
thus appointed for the redemption and
retirement of these notes, another stat.
ute was passed forbidding their fur
Their cancellation and retirement.
Some of them had, however, been
previously redeemed and cancelled
upon the issue Of additional national
bank circulation, as permitted by the
law Of 1875, so that the amount out
standing at the time of the passage of
the act forbidding their further retire
ment was $346, 681,016.
The law of 1873 did not stop at dis
tinct prohibiting, but contained in ad.
dition 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 destroyed, but
they shall be reissued and paid out
again and kept in circulation.
This was the condition of affairs
January l, 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 an
omalous situation of owing the lend
ers of it's 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 &C.
quittance.
There had been issued and sold $685.
500, 900 of the bonds authorized by the
resumption act of 1876, the proceeds
of which, together with other gold in
the treasury, created gold fund deem
ed sufficient to meet the demands
which might be made upon it for the
redemption of outstanding United
States notes This fund, together with
such gold as might be from time to
time in the treasury available for the
purpose, has been since our gold re-
serve. and 800, 900, 900 has been re
garded as an adequate amount to ao-
complish it's object. This fund
amounted, January 1, 1879, to $114,-
1913, $50, and though, thereafter, con-
stantly fiuctuating, it did not fall be-
low that sum until July, 1892. In
April, 1898, for the first time since its
ablishment, this reserve amounted
to less than 800, 100000, containing
at that date only $97, $3.50.
In the meantime, in July, 1890, an
act had been passed directing larger
government monthly purchases of sill
yer than had been required under pre-
vious laws, and providing that in pay
ment 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 secretary
of the treasury. 1t was, however, de-
clared in the act to be "the establish.
ed policy of the United States to main
tain the two metals on parity with
each other, upon the present legal ra'
ito, or such ratio as may be provided
by law"
In view of this declaration it was
not deemed permissible for the secre-
tary of the treasury to exercise discre-
ton In terms conferred on him by re.
fusing to pay gold on those 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 constant
" widening disparity between their ac-
tual values under the existing ratio.
It thus resulted that the treasury notes
issued in payment of silver purchases,
under the law of 1890 were necessarily
treated as gold obligations at the OPP
ton of the holder.
The notes on November 1, 1898,
when the law compelling the monthly
purchase of silver was repealed,
amounted to more than 1856, 900, 900.
The notes of this description now out
standing, added to the United States
notes still undiminished by redemption
or cancellation, constitute a volume OF
gold obligations amounting to nearly
$500. 600, 900. These obligations are
the instruments, which, ever since we
have had a gold reserve, have been
used to deplete it. !,
The reserve, as has been stated, had
fallen in April, 1898, to $97, 01l.S3o.
II has from that time to the present,
with very few and unimportant up
ward movements, steadily decreased,
except it has been temporarily repien-
ished by the sale of bonds. Among
the causes for this constant ana uni
form shrinkage in this fund may oe
mentioned the great falling of IN ex-
norts under the operation of the tarln
law. until recently in force, which
cr;ppled our exchange OF commodities
with foreign nations. and necessitateo
to some extent the payment OF our bal
ance in gold. The unnatural lnf1uxion
Of silver into our country and the IN
creasing agitation for it's free and un,
limited coinage, which have created
onnrehension as to our disposition OF
ability to continue gold payments, the
CONSEQUENT boarding of gold at home,
and the stoppage of investments OF for.
eian capital, as well as the return OF
onr securities already sold abroad, ano
the high rate of foreign exchange