The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, 1895-12-04

,SudnCe
| V antages to favorites, and which, while encour.
aging intercourse and trade with other nations,
recognizes the fact that American self-rSliance,
thrift and ingenuity build up country in
dustries and develop its resources more surely
than enervating paternalism. The compulsory
purchase and coinage of silver by the Government,
unchecked and unregnated by busine conditions
and needless OF our currency needs, which for
more than fifteen years diluted our circulating
dun, undermined confidence abroad in our fnan-
cia ability, and at last eliminated in distress and
panic at home, has been recently stopped by the
repeal of the laws which forced this reckless
scheme upon the country. The things thus accom-
plShed, Notwithstanding their extreme Importance
and benefcent effects fall far short of curing the
monetary evils from which suffer a result OF
long indulgence in ill-adviSed financial eXpedents.
The currency denomina.ed by the United
States and so only known greenbacks, was is
sued in large volumes during the late Civil War,
and was intended originally TO meet the exigences
OF that period. 1t will be seen by a reference to
the debates in Congress at the time the laws
passed authorizing the issue of these notes that
the.r advocates declared that they were intended
for only temporary and TO meet the emergency
OF war. In almost if not all the laws relating to
them some provision was made contemplating their
voluntary or compulsory retirement. large
quantity OF them, however, were kept on foot and
mingled with the currency of the country, So that
at the close of the year 1874 they amounted TO
1888, 999.073 Immediately after that date and in
January, 1875, a law passed providing for the
resumption of specie payments, by which the Sec
rotary OF the Treasury was required whenever ad-
ditional circulation issued to National banks
to retire United States notes equal in amount to 80
per cent of such additional National bank circula-
ton until such notes were reduced to $30O,0OO
900. This law her provided that on and after
no irct lam MI
notes then outstanding should be redeemed in coin
and in order to provide and prepare for such re-
demption the Secretary of the Treasury was au-
thorized not only any surplus revenues OF the
Government, but 10 issue bonds of the United
States and dispose of them for coin and to use the
proceeds for the purposes contemplated by tne
statute.
In May 1873 and before the date thus appointed
for the redemption and retirement of these notes
another statute passed bidding their further
cancellation and retirement. Some OF them had,
however, been previously redeemed and Cancelled
upon the issue OF additional National bank circu-
aton as permitted by the law of 1875, so that the
amount outstanding at the time OF the passage or
the act forbiddng their further retirement was
$346,6S1,0l6. The law OF 1878 did not stop at dis
tinct prohibition, but contained in addition 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
issued and paid out again and kept in circulauon."
This the condition of affairs the LIST day of
Janusry, 1879, which had been fixed upon four
years before the date for entering upon the re-
dempton and retirement OF all these notes and for
which such abundant means had been provided.
The Government was put in the situation OF owing
TO the holders OF its notes debts payable in gold
demand, which could neither be retired by receiv-
ing such notes in discharge of obligations due the
Government, nor Cancelled by actual payment in
gold. 1t was forced TO redeem without redemp-
ton and TO pay without acquittance.
There has been issued and sold S95, 100000 of
the bonds authorized by the resumption act OF
1873, the proceeds of which, together with other
gold in the treasury, created gold fund deemed
sufficient TO meet the demands that might be made
upon it for the redemption of the United States
notes. This fund.- together with such other gold as
might be from time to time in the treasury avalla-
bic for the same purpose, has since been called our
gold reserve and 800 OO0, 600 has been regarded
an adequate amount TO accomplish its object. This
fund amounted on the list day of January, 1879, 10
$l14.l93,35O, thereafter constantly huctuat-
ting. 1t did not fall below that sum until July,
1892. In April, 1893, for the first time since its
establishment, this reserve amounted TO less than
500 900 OOO containing at that date only S97 OIL
$50 In the meantime and in July, 1890, an act had
been passed directing larger Governmental pur-
chases of silver than had been required under pre-
vious laws aud providing that the payment for
such silver treasury Dotes of the United States
should be issued payable on demand. in gold or
Treasury. 1t was, however, declared in the act TO
1.-THE established policy Of the United States TO
main ain the two metals on parity with each 9TH
er the 'present legal ratio or such ratio las
may be provided by law.
In view OF this declaration it was not deemed
permissible for the secretary of the Treasury
exercise the discretion in terms conferred on him
by refusing pay gold on these notes when de-
manded, because by such discrimination in favor
of the gold dollar the so-caled parity of the two
metals would be destroyed. and grave and danger
Gus consequences would be precipitated by affirm
ing or accentuating the constantly widening dis
parity between their actual values under the ex-
listing ratio.
payment of silver purchases under the law of 1890
necessarily treated as gold obligations, at the
option OF the holders. These notes, on the first
day of November, 1893, when the law compelling
the monthly purchase of silver was repealed,
amounted 10 more than l55,0O0.O00. The notes
of this description now outstanding, added to the
United States notes still undiminiShed by redemp-
ton or cancellation, constitute volume of gold
obligations amounting 10 nearly S3O0,0OO00O
These obligations are the instruments which,
ever since we have had gold reserve,
This had been stated, had fallen in pril,
1893, to $97 $50. 1t has from that time to the
present, with very few and unimportant upward
movements, steadily decreased except when it has
been temporarily replenished by the sale OF bonds.
Among the causes for this constant upward
shrnkage in this fund may be mentioned the great
falling OFF of exports under the operation 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 balances in gold, the unnatural infusion OF
silver into our currency and the increasing agita-
ton for it's free and unlimited coinage, which have
created apprehension as to our disposition or
ability to continue gold payments. The conSe-
quent boarding OF gold at home and the stoppage of
investments of foreign capital well as the return
of our securities already sold abroad, and the high
rate of foreign exchange, which induced the ship
ment of gold 10 be drawn against, is matter of
speculation In consequence OF these conditions
the gold on the LIST day of February, 1894,
reduced TO $65438,377, having lost more than
$31, 100000 during the preceding nine months, or
since April 1893. Its replenishment being neces-
sary, and no other manner of accomplishing it
being possible resort had to the issue and sale
OF bonds provided for by the redemption act of
1875.
Fifty millions of these bonds were sold, yielding
$6S, 633, 295 II, which was added to the reserve
fund OF gold then on hand AS result of this
operation this reserve which had suffered constant
and large Withdrawals in the meantime, stood on
the 9th day of March, 1894, at the sum of S107,-
446,S02 Its depletion was, however, Immediately
thereafter so accelerated that on the 30th day of
June, 1894, it had fallen to $64,S73025, thus
losing by Withdrawals more than S42 000, 900 in
five months, and dropping slightly below its stu
alton when the sale of $50,000000 in bonds
effected for its replenishment. This depressed
condition grew worse and the Oath day of
November, 1894, our gold reserve being reduced to
So, $50, 701, it became necessary to again
strengthen it. This done by another sale of
bonds amounting to $4,000, 900, from which there
realized S5S,53S, 500, with which the fund was
increased to Sill JAP 021 on the 4th day of
December, 1894.
Again disappointment awaited the anxious hope
for relief. There was not even q lull in the exas
perating Withdrawals of gold. On the contrary
fhey pro 1arpp and poor tcfon hon,