The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, 1895-12-04
RESIDENT GROVER CLEVELANDS MESSAGE SENT TO CONGRESS-

, about six months from the date OF the contract
| and least a half of the amount was to be FUR
! nished from abroad. 1t was also agreed by those
supplying this gold that during the continuance OF
| the contract they would by every means in their
power protect the Government against gold With
, The contract also provided that if Congress
would authorize their issue bonds payable by their
terms in gold and bearing interest at the rate OF
per cant per annum might within ten days be sub,
Stituted at par for the per cent bonds described
-, in the agreement. On the day this contract was
made its terms communicated TO Congress
by special executive message, in which 1t was
stated that more than S16,000,O00 would be saved
| to the Government if gold bonds bearing 3 per
cent interest were authorized to be substituted Tor
those mentioned in the contract.
Congress having declined TO grant the necessary
authority 10 secure this saving, the contract un-
modified was carried ont resulting IN go q reserve
amounting to $l07, gu $50 on the Sth day OF July,
1895. The performance OF this contract not only
restored the reserve, but checked for time the
withdrawal or gold and brought on period OF re-
stored confidence and such peace and quiet IN
business circles were OF the greatest possiule
value in every interest that affects our people.
have never had the slightest mls5iving concerning
the wisdom propriety of this ARRANGEMENT ana
quite willing TO fer my full share OF re-
SponSbility for its promot on
l believe II averted disaster, the lnninenceoI
which was fortunately net at the time generally
understood by our people. Ihoush the con ract
drawal its good results could not be permanent.
Recent Withdrawals have reduced the reserve from
Sl07 57l 800 on the Sth day OF July. 1895, 49,,
1873 $50. How long it will remain large enough 20
render its increase unnecessary is only matter OF
conjecture though quite large Withdrawals for
shipment in the immediate future are predlcteu IN
well-informed quarters. About Yl6,UOO,OUU mas
been withdrawn during the mouth of November
The foregoing statement of events and condt-
tions develops the fact that after increas ng our
interest bearing bonded Indebtedness more than
1852, 100000 TO save cur gold reserve we are
nearly where started, having now in reserve
$79,333 1855 against S65,43S.377 in February,
the amount of gold drawn from the treasury APP
pears to be very large, as gathered from the Facts
and figures herein presented, 1t actually was much
larger considerable sums having been acquired by
the treasury within the several periods stated with
out the issue OF bonds.
ON the 2Sth of January, 1895, it reported
by the Secretary of the Treasury that more than
$172, O0O, 900 of gold had been Withdrawn for
boarding shipment during the year preceding.
He reports that from January l. 1879, TO July
only alt little over s2s, 100000 was Withdrawn,
and that between July a. 1890, the date of
the passage of the law for increased purchase of
silver, and the first day of December, 1895, or
vii hin less than five and half years there was
more than $407 900 900 drawn from the treasury
in gold since January l. 1879, the date fixed in
1875 for the retirement of the United States notes.
Nearly 1927 000, O0U of the gold thus Withdrawn
has been paid out on these United States notes and
yet every OF the $346O00,0U0 is still I'M
Cancelled and ready to do service IN future gold
depietions. More than S75,OO0,000 in gold has
their creation in 1890 been paid out from the
treasury upon given the purchase OF silver
by the Government, and yet the whole amounting
to S153,0O0 600, except little more than Slo-
for silver at the request of the holders, remains
outstanding and prepared TO Join their older and
more experienced allies in future raids upon the
treaSury'S gold reserve.
In other words, the Government has paid in gold
more than nine-tenths OF its United states notes
and still owes them ALL 1t has paid in gold about
one-half of its notes given for silver purchases
without extinGuishins by such payment one dollar
of these notes. When added TO all this we are re-
minded that TO carry on this astounding financial
scheme the Government has incurred a bonded
Indebtedness of ST. 300, 600 in establishing gold
reserve and $l62,3l5.4O0 in efforts to maintain
it, that the annual interest charge on such bonded
ir1la q mar nm
tinuance of present course may result in fur
Their bond issues, and that we suffered or are
threatened with all this for the sake of supplying
gold for foreign shipments facilitating its hoard
ing at home, situation is exhibited which GER
tainly ought to arrest attention and provoke imme-
date legislative relief. l convinced the only
thorough and practical remedy for our troubles Is
found in the retirement and cancellation OF our
United states notes, commonly called greenbacks,
and the outstanding treasury notes issued by the
Government in payment o. silver purchases under
the act OF 1890.
L believe this could be quite readily accomplished
by the exchange of these notes for United States
bonds OF small as well as large denominations
| bearing low of interest They should be
long term bonds thus increasing their desirability
| as investments, and because their payment could
| be well postponed to period far removed from
present financial burdens and perplexities. when
with increased prosperity and resources they could
be more easily met, TO insure the cancellation of
these notes and also provide way by which gold
may be added to our currency in lieu of them
feature in the plan should be hority given to
the Secretary of the Treasury to dispose of the
bonds abroad Tor gold, If necessary, to complete
the contemplated redemption and cancellation.
permitting him 10 the proceeds of such bonds
to take up and cancel any of the that may be
in the treasury that may be received by the
Government on any account The increase of
bonded debt involved in this plan would be amply
compensated by renewed activity and enterprise
in all business circles The restored confidence at
home the reinstatement OF faith in our monetary
strength abroad, and the stimulation of every in
terest and industry would follow the cancellation
OF the gold demand obligations now affecting us.
In any event, the bonds proposed would stand
for the extinguishment of a troublesome indebted
ness, while in the path follow there turks
the menace of amending bonds with indebted
still undiScharged and aggravated in every
feature. The obligations necessary fund this in
which we have been relieved since 1884 by antici-
patton and payment by the requirements of the
sinking fund out of our surplus revenues. The
currency withdrawn by the retirement Of the
United States notes and treasury notes, amounting
to probably less than S4S6 00000 might be sup
piled by such gold would be used their retire
ment or by an increase in the circulation of
National banks Though the aggregate capital OF
those now in existence amounts to more than
1864, 1000, their outstanding circulation, based
on bond security, amounts to only about $3.50 000.
OOO. They are authorized to issue notes amount
Ing to W per cent OF the bonds deposited TO
their circulation, but in event beyond the
amount OF their capital stock, and they are obliged
to pay 1 per cent tax on the circulation they
issue.
think they should be allowed to issue circula-
ton equal to the par value of the bonds they de-
post to secure it, and that the tax on their circu-
lation should be reduced to one-fourth of l per
cent, which would undoubtedly meet all the ex-
pense the Government suffers on their account
In addition they should be allowed substitute or
deposit, in lieu of the bonds now required as Sc
curity for their circulation, those which would he
issued for the purpose retiring the United STATES
notes and treasury notes. The banks already ex-
listing, if they desired to avail themselves of the
provisions of the law thus modified, could issue