The Kootenai herald. [volume] (Kootenai, Idaho) 1891-1904, 1895-12-07
PANIC PUSHED THE TREASURY HARD

PANIC PIT SHED THE TREASURY HARD
The PEOPLE Themse y es Responsible in a
Measure for Bond Issues.
On July !, 1893, more than a year and a
half before the first bonds were issued
to replenish the gold reserve, there was a
net balance in the treasury, exclusive Of
such reserve, of less Lnan $l3,OOO,OOO, but
the gold reserve amounted to more than
S114, 600, which was a quoting feature
of the situation It was when the stock
of gold began rapidly to fall that fright
supervened and our securities held
abroad were returned for sale and debts
owed abroad were pressed for payment.
In the meantime extensive shipments of
gold and other unfavorable indications
caused restlessness 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gold withdrawn which was retained by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 ending July go 1894, nearly $4,000, =
Z
ury and about $77,OOO,O0O was sent abroad,
while during the fiscal year ending June
30 1895. over $117, 900 600 was drawn out of
which only about $660O0,OO0 was shipped,
leaving a large balance of such withdraw
ais to be accounted for by domestic hoard
ing. Inasmuch as the withdrawal of our
gold has resulted largely from fright,
there is nothing apparent that will pre-
vent its continuance or recurrence with
aXpPnf SlIp6
change in our financial methods as will
reassure the frightened and make the
desire for gold less intense. 1t is not clear
how an increase in revenue, unless it be
in gold, can satisfy those whose only
anxiety is to gain gold from the govern
ments store There cannot, therefore, be
relied upon an increased revenue as cure
for our present troubles.
It is possible that the suggestion of in
creased revenue as a remedy for the diff
fculties we are considering, may have
originated in an intimation of distinct al
legation that the bonds which have been
issued ostensibly to replenish our gold re-
serve were really issued to supply insult
fcient revenue. Nothing can be further
from the truth. Bonds were issued to
obtain gold for the maintenance of our
national credit. AS has been shown, the
gold thus obtained has been drawn again
from the treasury 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 treasury, they became the
money of the government like any other
ordinary government funds and there was
nothing to do but use them in paying
government expenses when needed.
At no time when bonds have been issued
has there been any consideration of the
question of paying the expenses of the
with their rrOcapdS There
was no necessity to consider that ques-
tion At the time of each bond issue We
had a safe surplus in the treasury for the
| ordinary operations, exclusive of the gold
in our reserve. In February, 1894. when
the first issue of bonds was made, the
! surplus amounted to over $7S,000000. In
November, when the second issue was
made. it amounted to more than A2, 900,
OOO In February, 1895, when bonds for
| the third time were issued, such surplus
! amounted to more than $10O,000,O00. 1t
now amounts to S96,072, 1903 Besides all
| this the secretary of the treasury has no
| authority whatever to issue bonds to in
! crease the ordinary revenues or pay cur
rent expenses. 1 can not but think that
! there has been some confusion of ideas re-
sarding the effects of the issue of bonds
| and the results of the withdrawal of gold.
1t was the latter process and not the
former that, by substituting in the treas
| urv United States notes and treasury
| notes for gold, increased by their amount
! the money which was in the first instance
subject to ordinary government expendi-
! lures.
| Although the law compelling an increas-
ed purchase of silver by the government
was passed on the 14th day of July 1890
Withdrawals of gold from the treasury
! upon the notes given in payment on such
| purchases did not begin until October, 1891
| Immediately following that date the with
| drawaIs upon both these notes and United
States notes increased very largely and
have continued 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 and treasury notes issued for silver
| purchases as was thus withdrawn during
the 111b years Immediately prior thereto
and after the first day of January, 1879
when specie payments were resumed. Il
is neither unfair nor unjust to charge q
large share of our present financial per
plexities and dangers to the operation OF
| the laws of 1873 and 1890, compelling the
purchase of silver by the government
| which not only furnished a new treasury
obligation upon which its gold could be
| withdrawn but so increased the fear of ar
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.