The times. (Owosso, Mich.) 1882-1897, 1895-12-06


tionary, and the absurd spectacle might
be presented of a dealer selling gold to
the government, and with United States
notes or treasury notes In his hard imme-
diately clamoring for its return and a re-
sale at a higher premium.
1t may be claimed that large revenue
and redundant receipts might favorably
AFFECT the situation under discussion by
affording an opportunity or retaining
these notes In the treasury when received,
and thus preventing their presentation for
gold. Such retention to be useful ought to
be at least measurably permanent. ana this
Is precisely what is prohibited. as far as
United States notes are concerned, by the
law of 1878, forbidding their further re-
tirement. That statute in so many words
provides that these notes when received
into the treasury and belonging to the
United States, shall be paid out again and
readily seen that the government could
not refuse to pay out United States notes
and treasury notes In current transactions
silver alone, and still maintain the parity
between that metal and the currency rep
resenting gold.
would Be Unjust Taxation.
Besides the accumulation in the treasury
of currency of any kind exacted from the
people through taxation Is justly regarded
as an evil, and cannot proceed far without
vigorous protest against an unjustifiable
retention of money from the business of
the country, and Pronunciation Of a
be unjust when 1t takes from the earnings
and incomes of the citizens money so
much In excess Of the needs of govern
ment support that large sums can be gath
cred and kept in the treasury. Such
condition has heretofore In time of sur
plus revenue led the government to restore
currency to the people by the purchase of
it's unmatured bonds at a large premium,
and by large Increase of its deposits In
national banks, and we easily remember
that the abuse of treasury accumulation
has furnished a most persuasive argument
in favor Of legislation radically reducing
our tariff taxation.
Fear Oyercomes Sentiment.
Perhaps II is supposed that sufficient
revenue receipts would in a sentimental
confidence in our solvency and allaying the
fear of pecuniary exhaustion. And yet
through all our struggles to maintain our
gold reserve there never has been any APP
prehension as to our ready ability to pay
our way with such money as we had, and
the question whether or not our current
receipts met our current expenses has not
entered into the estimate OF our solvency
OF course the general state of our funds,
exclusive of gold, was entirely immaterial
debt could only be paid In gold, and his
only concern was our ability to keep on
hand that kind Of money.
On July l. 1892, more than @ year and q
half before the first bonds were issued to
replenish the gold reserve, there was a net
reserve. OF less than $4,000, 600; but the gold
reserve amounted to more than STA, 600 900,
which was the quieting feature of the sit
uation. 1t was when the stock of gold be-
gan rapidly to fall that fright superVened
and our securities held abroad were re-
turned for sale, and debts owed abroad
time extensive shipments of gold and
other unfavorable indications caused rest
lessness and fright among our people at
home. Thereupon the general state of our
funds, exclusive of gold, became also i'm
material to them, and they, too, drew gold
from the treasury, for boarding against all
contingencies. This is plainly shown by
the large increase in the proportion Of gold
withdrawn which was retained by our own
people as time and threatening incidents
progressed. During the fiscal year ended
June 80, 1894, nearly $3.50 600 in gold was
withdrawn from the treasury and about
000 was sent abroad, while during
the fiscal year June go, 1895, over S117 1000
was drawn out of which only about $780,
100000 was shipped, leaving the large bal
ance of such Withdrawals to be accounted
for by domestic boarding.
Can't Rely Upon Increased Revenues.
Inasmuch as the withdrawal of our gold
has resulted largely from fright, there is
nothing apparent that will prevent it's con-
tinuance or recurrence, with it's natural
consequences, except such q change in our
financial methods as will reassure the
frightened and make the desire for gold
less intense. 1t is not clear how an in
crease in revenue, unless it be in gold, can
satisfy those whose only anxiety is to gain
gold from the governments store. 1t can
not therefore be safe to rely upon increased
revenues as a cure for our present troubles.
1t is possible that the suggestion of in
creased revenue as a remedy for the diff
cultieswe are considering may have origin
ated in an intimation or distinct allegation
that the bonds which have been issued, os-
tensibly to replenish our gold reserve, were
really issued to supply insufficient rev.
enue Nothing can be further from the
truth.
To Maintain National Credit.
Bonds were issued to obtain gold for The
maintenance OF our national credit. AS
has been shown, the gold thus obtained
upon United States notes and treasury
notes This operation would have been
promptly prevented If possible, but these
notes having thus been passed to the treas
ury they became the money of the govern
ment, like any other ordinary government
funds. and there was nothing to do but to
use them in paying government expenses
when needed. At no time when bonds
have been issued has there been any con-
sideratlon of the question of paying the
expenses of government with their pro-
ceeds. There was no necessity to consider
that question. AT the time of each bond
issue we had safe surplus in the treas
ury for ordinary operations, exclusive of
the gold In our reserve. In February, 1894,
when the first issue of bonds was made,
such surplus amounted to over s1s,OOO,COO;
in November, when the second issue was
made, 1t amounted to more than $40, 000, 600,
and in February, 1895, when bonds for the
amounted to more than Sl00, 0OO, 600. II now
amounts to $9S,072, 420. 30. Besides all this
the secretary of the treasury had no au-
thority whatever to issue bonds to increase
the ordinary revenues or pay current ex-
penses. i cannot but think there has been
some confusion or IDEAS regarding the
effects of the issue of bonds and the results
OF the withdrawal of gold. 1t was the lat
ter process, and not the former, that, by
substituting in the treasury United States
notes and treasury notes for gold, in
creased by their amount the money which
was in the first instance subject to ordi-
nary government expenditure
Silver Largely Responsible.
Although thelaw compelling an increased
purchase of silver by the government was
passed on the 18th day of July 1890 with
drawals of gold from the treasury upon the
notes given In payment on such purchases
did not begin until October, 1891 linn edi-
ately following that date the Withdrawals
upon both these notes and United States
notes increased very largely and have con-
tinued to such an extent that since the
passage of that law there has been more
than 13 times as much gold taken out of
the treasury upon United States notes and
treasury notes issued for silver purchases
as was thus withdrawn during the liz
years Immediately prior thereto and after
the 1st day of January, 1879, when specie
payments were resumed. 1t is neither tin-
fair nor unjust to charge a large share of
our present financial perplexities and dam
gers to the operation of the laws of 1878 and
1890, compelling the purchase of silver by
the government which not only furnished
q new treasury obligation upon which its
gold could be withdrawn, but so increased
the fear of an overwhelming flood of silver
and forced descent to silver payments
that even the repeal of these laws did not
entirely cure the evils of their existence.