Evening star. [volume] (Washington, D.C.) 1854-1972, 1895-02-06
Mr.. REEDS SUBSTITUTE
His Bill to Provide for the Issue of Bonds
Offered.
His Statement Of the Financial Situa-
ton ms He Sees 1t and the
Proper Remedy.

| substitute for the administration bill. The
purport of the measure was published In
The Star last Monday. The bill in full
provides as follows:
THAT to enable the Secretary of the
Treasury to provide for and maintain the
redemption of United States notes accord
ing to the provisions of the act approved
January IA, 1875, entitled AN act to pro-
vide for the resumption of specie pay
ments,' in addition to the power he now
has under said act, he is authorized, from
time to time, at his discretion, to issue,
sell, and dispose of, at not less than par
in coin, either of the description of bonds
authorized in said act coupon or regis
tered bonds Of the United States, to an
amount sufficient for the objects herein
stated, bearing not to exceed per centum
interest per annum, payable semi-annually,
and redeemable at the pleasure of the
United States. in coin, after five years
from their date, with like qualities, priv
fleges and exemptions provided in said act
for the bonds therein authorized. And the
Secretary of the Treasury shall use the
proceeds thereof for the purpose herein
provided for, and none other
Section 2. That to enable the Secretary
to pay the current expenses of the govern
ment, so long as the current revenues
shall be deficient, he is authorized and re-
quired, from time to time. in his discretion.
than par, such an amount Of certificates of
tr debtedness of the denominations of SIS,
800 and 500, or any multiple thereof, as
may be needed for that purpose, bearing
not to exceed 3 per cent interest per an
mum, payable semi-annually, and redeem
able at tho pleasure of the government, in
coin, after two years from their date with
like qualities, privileges and exemptions
provided in the act approved January IA,
1879. The Secretary may, at his diScre-
ton, sell and dispose of the same for not
less than an equal amount of lawful money
of the United States, at designated de-
positories of the United States, and at
such post offices as he may select, and the
Secretary shall use the proceeds thereof
Tor the purpose provided for in this sec
ton, and for none other"
The United States as Banker and in
Business.
In the course of his remarks Mr. Reed
said:
For period of sixteen years the United
States has been q banker. without question
as to its ability to pay. Within the last
year doubts have been thrown about that
ability. But there is another department
of the United States treasury, which is the
department of the United States a bust
ness establishment. That business estab-
lishment has been running astern SLOT 0O0-
600 up to this time, with more deficits in
prospect. Unfortunately for the govern
ment those two operations, those two de-
partments Of the government, have been
mingled together in such fashion that the
misfortunes of the business department
have been devolved in the popular mind on
the banking department. The United States
has redeemed, as it has agreed to redeem,
thus far every note which has been pre-
scented. But unfortunately the exigencies
Of its business department have compelled
1t to put out one hundred and seven mil
lions. more or less, in order to meet the
necessities of that business department.
business GeDarfmpnt- instead
of borrowing money on its own hook, has
taken the money of the banking depart
ment and ressued it; and the result is
what is known in popular phrase as the
endless chain, whereby the United States
has been made the furnisher of gold to the
rest of the world, a condition of things
never contemplated by our system of
finance, a condition OF things which never
need to have occurred; but 1t has occurred,
and the President of the United States has
appealed not merely to his own party as
sociates, who are in great majority in
this House, but to the gentlemen upon the
other side for assistance.
The Situation.
Our situation is this: We were redeem
ing greenbacks when they were presented.
If the revenue was equal to the expendi-
lures whenever a g1eenback was redeemed
it would stay in the treasury, and this not
withstanding the fact the Secretary is au-
thorized to reissue; for it is not either the
authorization or even the demand OF the
law that they shall be reissued that causes
the trouble. 1t is the fact that they are re-
issued. It is the fact that their resistance
causes this continued depletion Of the treas
ury. Now, 1 will fortify my own statement
and that of Mr.. White by recurrence to the
treasury figures themselves.
I'm March 1893, the demand notes of the
government which were in the treasury
were S36OOOOoO in amount. Today the
amount is s124,0oO.0oo. nearly 125,ooo,G COO
In other words, we have redeemed Vs.
coo 600 Of the United States demand notes
which up to date stay redeemed. We had
in gold when this administration entered
into power $107 100000. We have borrowed
s117.OO0,0O0. which makes 224,OooH We
have on hand 100000; showing that we
have paid out $1S2,00O,OOO OF this $780,
100000 has indirectly gone to pay for the
deficiency in the revenue, and that leaves
81, 600 600, which ought to have been the
amount of our redemption of the green
backs; but in reality we have redeemed
SIS, 900 900, and added s11.O00.C00 more out
of other funds than this greenback re-
demption fund called upon us to redeem.
1 say that is not a bad showing in the
present unfortunate condition of affairs.
It is not a bad showing for the working
of the system under this tremendous dis
advantage Now, let us see what our sit
uation is and what our future liabilities
are.
"As have already stated, we had orig
inally $406.000,OOO Of demand notes. We
treasury Of the United States. That leaves
us as demandable $372.000,O00 We have
$40 100000 in gold which leaves the de-
mand for which there is no gold in the
treasury to meet $3320O0,O00. In other
words, the United States stands face to
face with an emergency Of 32,OOO,O0O.
That is not vast when you think what we
have met and conquered in the way Of
finance. 1t seems strange that $S32, 600
should stagger US: and the only reason
why it does stagger us is because in the
popular mind this drain of $1OI, 100000,
which was for the United States deficien-
cy is attributed to an eager rush by the
pee ple TO have the greenbacks redeemed.
The Remedy.
Nov, what is the remedy? Why. the
remedy Is plainly to separate these two
transactions; to let the people Of the Unit
ed States see precisely what is going on
and the people of the world see what is
going on. When the government negoti-
ates the next s1OO, 600 900, which. If rumor
be correct, is already negotiated, we shall
then only haves232. OOO, 600 outstanding, with
ample authority on the part of the govern
ment to raise every dollar Of that. Now,
what Is the condition in which favorable
state Of affairs will exist? 1t is that con-
dition which we shall have when we keep
to 1,a mixing