The Somerset herald. [volume] (Somerset, Pa.) 1870-1936, 1895-12-11

| shall not be retired, cancelled, or de
| stroyed, bat they shall be reissued and
paid oat again and kept in circulation"
This was the condition of affairs on
the lst day ofJanuaay, 1873, which had
been fixed upon four years before as the
date for entering upon the redemption
and retirement of all these notes, and
for which such abundant means had
been provided.
The Government was put in the ano-
malOus situation of owing TO the hold
ers of its notes debts payable in gold on
demand, which could neither be retir
ed by receiving such notes in discharge
of obligations due the Government,
nor cancelled by actual payment in
gold. Ii was forced to redeem without
redemption, and to pay without ac-
quittauce.
There had been issued and sold 81
800 600 of the bonds authorized by the
redemption act of 1879, the proceeds of
which, together with other gold in the
Treasury, created a gold fund deemed
sufficient 10 meet the demands which
might be made upon it for the redemp-
ton of the outstanding United States
notes.
This fund, together with such other
gold as might be from time 10 time in
the Treasury available for the same
purpose, has since been called our gold
reserve, and SiOO,0OO,O0O has been re
garded as an adequate amount to ac-
compiish its object. This fund
amounted on the lst day of January,
1879, to Sll4, l95, 800, and though there
after constantly fiuctuating, it did not
fall below that sum in July, 1892.
In April, 1893, for the first time since
its establishment, the reserve amount
ed to less than SlO0,OJ0,O0O, containing
a, that date only $97,0ll,3sO. In the
meantime, and in July, 1880, an act
had been passed directing larger Gov
ernmcntal monthly purchases of sil-
yer than had been required under
previous laws, and providing that in
payment for such silver, Treasury notes
of the United States should b. issued,
payable on demand i'm gold or silver
coin, at the discretion cf the Secretary
of the Treasury. II was, however, de-
clared in the act to b. ''the established
policy of the United States to maintain
the two metals on parity with each
other upon the present legal ratio,
or such ratio Is may be provided 10y
law"
In view OF this declaration il was
not deemcd permissible for the Secre-
tary Of the Treasury TO exercise the dis
cretion conferred on him by refusing to
pay gold on these notes when demand
ed, becansc 10y such discrimination la
favor of the gold dollar the so-called
parity of the two metals would be de
stroyei. and grave and dangerous con
sequences would be precipitated by
affirming or accentuating the constant
ly-widcniug disparity between their
actual values under the existing ratio.
It thus resulted that the Treasury
notes Issued in payment of silver par-
chases under the law oflSJ) were neces-
sarily treated Is gold obligations at the
option ofthe holder. These notes on
the lst day of November, 1898, when
the Law compelling the monthly pIr-
chase of silver was repealed, amounted
to more than Sli5,OJ),0Jo. The notes
Of this description now outstanding,
added to the United States notes still
undimiGished by redemption or can
collation., constitute volume of gold
obligations amounting % nearly Sj9),-
0)0,0)). These obligations are the
instruments which, ever since we have
had a gold reserve, have been used to
deplete it.
This reserve, rs has been stated, had
fallen in April, 1898, to SJ7,Oll,S3). 1t
has, from that time to the present,
with very few and unimportant up
ward movements, steadily decreased,
except u it has been temporarily re-
plenished by the sale Of bonds.
Among the causes for this constant
and uniform shriBkage 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 com
modties with foreign nations and
necassitated to some extent the pay
ment of our balances in gold, the un-
natural Infusion Of silver into our cur
rcncy, and the increasing agitation FOR
| its free aud unlimited coinage, which
have created apprehension as 20 our
disposition OF ability to continue gold
payments, the boarding ut home and
stopplge OF Investments of foreign
I capital, as we'll a. the return of our Sc
clriiies already sold abroad; and the
| high rate of foreign exchange, which
| induced the shipment of our gold to be
( drawn against, - a matter of specula-
ton.
In consequence of these conditions,
| the gold reserve on the lst day of Feb
ruary, 1884, was reduced to So, AS, So,
having lost more than SSl ,0)), OO0 dur
/ ing the preceding nine months, or since
April, lSJS. It's replenishment being
necessary, and no other manner OF
accomplishing it being possible, resort
was had to the issue and sale of bonds
/ provided for by the Resumption Act of
1870.
Fifty millions of these bonds were
sold, yielding SIS, ,653,2 ,21j Il, which was
added TO the reserve fund of gold then
on hand. As result of this operation,
this reserve, which had suffered con-
slant and large Withdrawals in the
meantime, stood, on the 9Th day OF
March, 1871, AZ the sum of Sl07, ,i43, ,S)2.
Us depletion was, however, immedi-
ately thereafter Sc accelerated that on
tine s),h day OF June, 1894, it had fallen
! to SGi $40, ,02J, thus losing By withdraw
ais mere than 81, ,O00, 600 in five months,
and dropping slightly below its situa-
/ ton when the sale OF SJ0,0J0,OO0 in
bonds was effected for its replenish-
ment. This depressed condition grew
worse, aud OH the 9th day Of Novem-
Der, 1894, cur gold reserve was reduced
! to So ,G59. 70i.