Mexico weekly ledger., 1895-12-05

10 the markets. 81 me @ori1, nas been
pie is based upon q denial OF the right
Of the government TO obStrUct the avenues to
our peoples cheap living or lessen their com
ing especial advantages 10 .faVorites, and
which while encouraging Our intercourse and
that American seif-reliance. thrift and inge-
nutty can build up our eountry's industries
and develop its resources more surely than
enerVatlnS paternaltsn-
REPEAL OF THE sILvER-PURCHAsE LAW.
Thc compulsory purchase and coinage Of sill
yer bg the government unchecked and unregn-
lated by business conditions ana h~essiess OF
cur currency needs, which for more than fifteen
years diluted our circulating medium, UNDER
mined confidence abroad In our hnaEelai
ability, and at last eliminated in distress and
the repeal Of the laws which forced this reck-
less scheme upon the country. The things thus
accomplished, notwithstanding their extreme
Importance and benefcient effects. fall far
short Of curing the monetary evils from which
we suffer as a result Of long indulgence In IL
advised financial ex pedients.
THE ~GREESBACK CURRENCY.
The currency denominated United States
notes, and commonly known as greenbacks,
was issued In large volume during the late civil
war, and intended originally 30 meet the ext
D reference TO the debates in congress
at the time the laws were passed
authorizing the issue OF these notes,
ttA@L AAtSAA VI SN0A~ N-Ng FSAS 80
tended for only temporary use ana to meet the
emergency OF war.
In almost, If not. all, the laws relating to
them some provision was made contemplating
their voluntary or compulsory retirement. A
large quantity OF them, however, were Kept on
foot and mingled with the currency OF the
country so that at the close OF the year 1874
they amounted to 1881 .e39.G1s. Immediately
after that date, and in January, 1877, a law was
passed providing for the resumption OF specie
payments by which the secretary of the treas
ury was required whenever additional circula-
t ~ re,,r was srnt.s lsssed notes no s eaasi IN sn nangs
TO so per cent. OF such additional national bank
circulation until such notes were reduced TO
sSo0, 10000. This law further provided that on
and after the LIST day OF January, 1870, the
United States notes then outstanding should
be redeemed in coin. and in order to provide
OF the treasury was authorized not only to use
any surplus revenue of the government, but to
issue bonds of the United States and dispose
of them for coin, and to use the proceeds for
the purposes contemplated by the statute.
In May, 1873, and before the date thus ap-
pointed for the redemption and retirement. OF
ding their further cancellation and retirement.
Some of them had, however, been previously
ditional national bank circulation, as permitted
by the law of 1875, SO that the amonnt out
standing at the time OF the passage OF the act
6st ,0l6. The law OF 1873 did not stop at distinct
prohibition, but contained, In addition, the
following express provislon:
And when any OF said notes may be re-
deemed or be received into the treasury, under
any law, from any source whatever, and snail
belong to the United States, they shall not be
retired. cancelled. or destroyed, but they shall
be reissued and paid out again ana kept IN cir
citation"
This was the condition of affairs on the LIST
day of January, 1879, which had been hXed 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 anomalous situation OF owing TO the hold
erS of its notes debts payable in gold on de-
mand which could neither be retired by re-
ceiving such notes in exchange Of obligations
due the government nor cancelled by actual
payment in gold. 1t was forced TO redeem
tance.
THE GOLD EsERv
There has been issued and sold s95, 100000 OF
the bonds authorized by the resumption act of
1873, the proceeds of which, together with
other gold in the treasury, created a gold fund
deemed sufficient to meet the demands which
might be made upon ii for the redemption OF
the outstanding United States notes. This
fund, together with such other gold as might
be FROM time to time in the treasury available
for the same purpose, has been since called
our gold reserve, and si0o,0R1,Oo has been re-
its object. This fund amounted on the
list day of January. 1879. to sll4, 10, l36. and
though thereafter constantly huctlatlng,
1t did not fall below that sum in July, 1892. In
1893, for the first time since its establishment,
this reserve amounted to less than sl00,UDp,UU,
conta1ninga at that date only sN.oll,SS0 In the
N% - pbtS $500
passed directing larger monthly governmental
purchases of silver than had been required
under previous laws, aRd providing that in
payment for such silver treasury notes of the
United States, should be issued, payable on
demand, in gold or silver coin, at the discre-
ton of the secretary OF the treasury, it was
however declared in the act to be the eStab-
nshed policy of the United States to maintain
the two metals on u parity with each other
upon the present legal ratio, or such ratio as
may be provided by law.
In view of this declaration 1t was not deemed
permissible for tho secretary OF the treasury
to exercise the discretion IN terms conferred on
him by refusing to pay gold on these notes
when demanded. because by such discrimi-
nation In favor OF the gold dollar, the So-called
parity OF the two metals would be destroyed,
and grave and dangerous consequences would
be precipitated by firming or accentuat-
ing the constantly widening disparity between
their actualuyalues under the ex sting ratio.
1t thus resulted that the treasury notes issued
in payment OF silver purchases under the law
Of 1880 were necessarily treated as gold obliga-
lions, at the option OF the holder.
These notes, on the first day OF November,
1893, when the law compelling the monthly pur-
chase OF silver was repealed, amounted to more
than Si55,O00,0d0. The notes of this desc Upton
now outstanding, added TO the United States
tons amoSDIinr " n = w asoo 900 ssa o Phsese
obligations are the instruments which, ever
since we have had a gold reserve, have been
used to deplete it.
In April, 1893, TO sg7.01l 800. It has from that
time to the present. with very few and unim-
portant upward steadily de-
creased, except as 1t has been temporarily re-
pienished by the sale of bonds. Among the
causes for this constant and uniform shrink
ing in this fund may aforementioned the great
falling OF of exports under the operation OF
the tariff law until recently in force, which
crippled our exchange of commodities with
the payment OF our balances in gold;
the unnatural infusion of silver into
our currency, and the increase in agita-
ton for its free and coinage,
which have created apprehension as to our dis
position or ability to continue gold payments.
the consequent boarding OF gold at home and
the stoppage OF investments OF foreign capital
as well as the return OF our securities already
sold abroad. and the high rate Of foreign ex-
gold to be drawn against, as q matter OF >pecu-
lation.
DEPLETION OF H
In consequence of these conditions the gold
reserve, on the LIST day of February, 1894, was
reduced to iGL43s.S77, having lost more than
S5I 100000 during the preceding nine months,
or since April. 1888 It's replenishment being
necessary, and no other manner of accomplish
ing it being possible, resort was had to the
issue and sale of bonds provided for by the re-
sumption act of 1873
THE SALE OF BONDS.
Fifty millions OF these bonds were sold. yield
ing SIS ,632. II, which was added TO the re-
serve fund of gold then on hand. As O result of
this operation this reserve, which had suffered
constant ana LARGE TithdrawaIs in the mean
time, stood. on the 9th day OF March, 1894, at
the sum OF sI07.4f6.Sos. Its depletion was. how
tNDT. InlItlftitdIbiN I1tTbdilSE SD aCCCICEdLtu
that, on the 30th day Of June, 1894, 1t had fallen
to S6i,sT3,025. thus losing by Withdrawals more
than SI2,000.0U0 in i've months, and dropping
Slightly below It's situation when the sale of
Sa0,0O0,O 600 In bonds was effected for its replen-
ishment. This depressed condition grew
worse. and on the 2ffh day of November, 1894,
our gold reserve had been reduced to So, 669,-
OIL.
a SECoND ONT SALE
1t became necessary to again strengthen it.
ThiS was done by another sale of bonds
amounting to SJ0.O00,OD, from which there was
realized S5s,53s. 90 with which the fund was in
creased to Sill ,i42,02l on the 4th day OF Deem
Der, lsgi. Again disappointment awaited the
anxious hope for relief. There was not even a
luil in the exaSperatlng Withdrawals Of gold.
On the contrary, they grew larger and more
persistent than ever. Between the 4th day of
December. 1894, and early in February. 1895. a
period of scarcely more than two months after
the second reinforcement of our gold
reserve by the sale OF bonds. 1t had
500, O0O.06o. and had fallen to Sal, $40. Isi.
Nearly 81. ,00J had been withdrawn within
the month Immediately preceding this situa-
ton. In anticipation of impending trouble, /
a communication to the congress fully setting
forth our difficulties and dangerous position,
and earnestly recommending that authority be
given the secretary OF the treasury to issue
bonds bearing q low rate of interest, payable
By nfeir terms in gold, for the purpose OF main
the r~edeneqion and se eshs rssis issss sss q ana also ssr
ing United States notes and the treasury notes
issued for the purchase of silver under the law
of 1890 This recommendation did not, how
ever, meet with legislative approval
In February, 1885. therefore, the sishation
was exceedingly critical. With q reserve Pc
rilously low and o refusal OF congressional aid,
everything indicated that the end Of gold pay
ments by the government was imminent. The
results of prior bond issues had been exceed
ingE unsatisfactory and the large Withdrawals
of gold Immediately succeeding their public