The Ely miner. [volume] (Ely, Minn.) 1895-1986, 1895-12-11

fecttve action on their part VIII not be de-
The message recommends at length an
i'm PROV e.nent in the consular service by
some plan of appointment and control
National Finances
Fully half the message is devoted to
discussion of the financial situation
He gives lengthy review of the growth
of our currency, especially the United
States notes ard treasury notes. and the
consequent endless drain on the gold re-
serve of the treasury.
The president states that among the
causes for this constant and uniform
the great falling of of exports under the
operation of the tarin law until recently IN
force, which crippled our exchanges Of
commodities with foreign nations and ne :
cessitated TO some extent the payment Of
our balances in gold: the unnatural infu-
sion of silver into our currency and the in
creasing agitation for its free and unlim-
tied coinage, which have created apprehen-
sion as 10 our disposition or ability to con-
tinue gold payments; the consequent hoard
ing of gold at home and the stoppage Of
investments of foreign capital. as well as
the return Of our securities already sod
abroad. and the high rate ef foreign ex-
change, which induced the shipment OF
our gold 10 be drawn against as a matter OF
speculation
Dealings with Bond Syndicate.
The history Of the various bond trans
actions which have been resorted to in
order TO replenish the gold reserve is re-
viewed and the constant subsequent fall
ings off pointed out
We are now. the president says. nearly
where we started, and nearly all of the
gold Withdrawn has been paid out on
United States notes, which still remain I'M
Cancelled. Therefore. he says, Il am con-
remedy for our troubles is found in the re-
tirement and cancellation of our United
States notes, commonly called greenbacks,
by the government in payment of silver
purchases under the act of 1880"
The method he proposes is an exchange
for bonds, small and large and bearing q
low rate Of interest and for long term
The increase in the bonded debt would be
compensated by renewed activity and en-
terprlSe and restored confidence. A
troublesome Indebtedness would be can
celed, instead Of the menace of unenoing
bonds
The obligations necessary to fund this
Indebtedness would not equal in amount
those from which we have been relieved
since 1884; by anticipation and payment,
beyond the requirements Of the sinking
fund out of our surplus revenues.
Increase in Circulation.
The currency withdrawn by the retire
ment Of the United States notes and treas
ury notes, amounting to probably less than
s4S6, 600 600, might be supplied by such gold
as would be used on their retirement, or by
an increase in the circulation of our ma
tional banks i think they should
be allowed to issue circulation equal TO the
par value Of the bonds they deposit TO Sc
cure il, and that the tax on their circula-
ton should be reduced to one-fourth of one
per cent, which would undoubtedly meet
all the expense Of the government incurred
on their account. In addition they should
be allowed to substitute or deposit in lieu
OF the bonds now required as security for
their circulation those which would be is
sued for the purpose of retiring the United
States notes and treasury notes"
II is estimated that this would increase
the national bank circulation by nearly as
much as the currency retired. Restrictions
in the law on the location of national banks
TT-2l ion ~ a ir-ao ha N Re
the president says, might be done away
with and branch banks authorized.
But there might not be the necessity for
such an addition of the currency by new
issues of bank circulation as at first glance
is Indicated he says.
The silver left in the treasury, he thinks.
might be gradually converted into frac-
tional coin The government. he says, re-
ceives no gold in payment Of revenues, nor
The receipts are ali in silver certificates,
United States notes and treasury notes
Beginning of the Panic.
On July /. 1892, 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 than S.. 0o0, 600, but the gold
reserve amounted to more than S114 600 600,
, whlch was the e9ieting feature Of the sit
gan rapidly to fall that fright supervened
our securities held abroad were returned
for sale and debts owed abroad were
tensive shipments Of gold and other un-
favorable 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
ed June 80, 1884. nearly SS5 oDo. 900 in gold was
Withdrawn from the treasury and about
s7I,eo, 600 was sent abroad, while during the
nscal year ended June so, 1925, over s117,-
10000 was drawn out, of which only about
S66- COG, 600 was shipped, leaving the large
balance Of such Withdrawals TO be accounts
ed for by domestic boarding
1T is possible that the suggestion of IN
creased revenue as remedy for the diff
culues we are considering may have
legation that the bonds which have been
issued ostensibly to replenish our gold re-
serve were really issued 10 supply insult
rcient revenue. Nothing can be further
from the truth. Bonds were issued TO OBJ
tain gold for the maintenance of our ma
tional 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: bur
these notes having thus been passed to the
treasury, they become the money Of the
government, like any other ordinary gov
eminent funds, and there was nothing to
co but TO use them in paying government
expenses when needed"
The president then takes up the free sill
Yer coinage question and says:
Were there Infinitely stronger reasons
than can be adduced for hoping that such
action would secure for US bimetallic cur
rency moving on lines of parity, an expert
ment so novel and hazardous as that pro-
posed might well stagger those who believe
that stability is an imperative condition of
sound money
No government. no human continuance.
or act OF legislature, has ever been able TO
hold the two metals together in free COIN
age at ratio appreciably different from
that which is esta blished in the markets Of
the world"
"A lengthy argument against the theory
OF the governments power 10 maintain III :
value OF silver follows on well-known lines.
and the value of q safe and stable currency
IN al -.