Birmingham state herald., 1895-12-04

the presentation of United States notes
 or treasury notes and found its way to
 the hands of those who had only tempo
 rarily parted with it in the purchase of
 bonds
 The Bond Agreement.
 In this emergency and in view of it's
 surrounding perplexities 1t became en-
 tirely apparent to those upon whom the
 struggle for safety had devolved not
 only that our gold reserve must, for the
 third time in less than thirteen months,
 be restored by another issue and sale or
 bonds bearing a high rate of interest
 and badly suited to the purpose, but that
 a plan must be adopted for their disposi-
 tion, promising better results than those
 realized on previous sales. An agree
 ment was therefore made with number
 of financiers and bankers whereby it was
 stipulated that bonds described in the
 resumption act of 1875, payable in coin
 thirty years after their date, bearing in-
 terest at the rate of per cent per an-
 mum, and amounting to about $62,O OOO,000,
 should be exchanged for gold, receivable
 by weight amounting to a little more
 than $65, 100000.
 This gold was to be delivered in such
 instalments as would complete its deliv-
 cry within six months from the date of
 the contract, and at least one-half of the
 amount was to be furnished from abroad
 It was also agreed by those supplying this
 
 contract they would by every means in
 their power protect the government
 against gold withdrawals. The contract
 also provided that if congress would au-
 thorize their issue, bonds payable by
 their terms in gold and bearing interest
 at the rate of per cent per annum might
 within ten days be substituted at par for the per cent bonds described in the agreement. On the day that contract was made its terms were communicated to congress by a special executive mes
 sage, in which it was stated that more
 than $16000000 would be saved to the government if gold bonds bearing per cent interest were authorized to be sub stituted for those mentioned in the con-. tract.
 The congress having declined to grant the necessary authority to secure this saving, the contract unmodifed was carried out resulting in a gold reserve amounting to $107,571, ,230 on the Sth day of July, 1895.
 The performance of this contract not only restored the reserve but checked for a. time the withdrawals of gold, and brought on a period of restored confi- dence and such peace and quiet in bus mess circles as were of the greatest pos-i sible value to every interest that affects our people.
 have never had the slightest misgiv- ing concerning the wisdom and propriety Ol iiiiS eIleul dIlu dIIl Qulte WILT ing to answer for my full share of respon- sibility for its promotion. I believe it averted disaster, the immensity of which was fortunately not at the time generally understood by our people. Though the contract mentioned stayed for time the tide of gold withdrawals its good results could not be permanent Recent withdrawals have reduced the reserve from $107, ,571, ,230 on the 9th day of July, 1885, to $79, 9,333, ,966. How long 1t will remain large enough to render its increase unnecessary is only matter of conjecture. though quite large withdraw als for shipment in the immediate future are predicted in well informed quarters. About $16,0O0000 have been withdrawn during the month of November. The foregoing statement of events and conditions develops the fact that after creasing our interest-bearing bonded in- debtedness more than $162, ,000, 900 to save our gold reserve, we are nearly where we started, having now in such reserve $79,- 333966, as against $65, ,43S,377 in Febru- ary, 1894, when the first bonds were is- sued.
 Though the amount of gold drawn
 from the treasury appears to be very large, gathered from the facts and fig
 ures herein presented, it actually was
 much larger, considerable sums having been acquired by the treasury within the several periods stated without the is- sue of bonds. On the 18th day of Jan uary, 1895, 1t was reported by the secre-
 tary of the treasury that more than $170,000,000 of gold had been withdrawn for hoarding or shipment during the year preceding. He now reports that
 from January, 1879, ito July 14, 1890, pe-
 riod of more than eleven years, only a
 little over $2S,000,000 was withdrawn, and
 that between July IA, 1890, the date of the passage of the law for an increased pur-
 chase of silver and the 1st day of De- cember 1895, or within less than five and
 half years, there was withdrawn near ly $75,000,000, making a total of more than $403, 900 drawn from the treas
 ury in gold since January 1, 1879, the date fixed in 1875 for the retirement of the United States notes. Nearly $327,- 100000 of the gold thus withdrawn has been paid out on those United States notes; and yet nearly every one of the 3f6,O00,0O0 Is still uncancelled and ready to do service in future gold depletions. More than $76,000,000 in gold has, since their creation in 1890, being paid out from the treasury upon the notes given on the purchase of silver by the government; and yet the whole, amounting to $155, ,000,- 000 except little more than $16,0000 000 which have been retired by exchanges for silver at the request of the holders, remain outstanding and prepared to join their older and more experienced allies
 in future raids upon the treasury's gold reserve. In other words, the government has paid in gold more than nine-tenths of its United States notes, and still owes them all. It has paid in gold about one-half of its notes, given for silver purchases, without extinguishing by such payment one dollar of these notes. When added to all this we are reminded that to carry on this astounding financial scheme the government has incurred a bonded in- debtedness of $95,000,000 in establishing a gold reserve and s162 ,315, 400 in efforts to maintain it-that the annual interest charge on such bonded indebtedness is more than $11.000, 900; that a continuance in our present course may result in fur ther bond issues, and that we have suf- fered or are threatened with all these for the sake of supplying gold for foreign shipment or facilitating hoarding. The situation as exhibited certainly ought to arrest attention and provoke imme- diate legislative relief.
 The Remedy.
 am convinced that the only thorough and practicable remedy for our trouble is found in the retirement and cancella- ton of our United States notes, com monly called greenbacks and the o,lt-