The herald., 1895-12-17

the fiscal year 1897. During the fiscal
years 1894 and 1895 the ordinary eXpen-
ditures of the government have been de-
creased $27,2S5,656 as compared with
the fiscal year 1898, and it is believed that
with the cooperation of congress further
reductions can be made in the future with
out impairing the efficiency of the public
SERVICE"
GOLD WITHDRAWALS.
Continuing he says: "I'he large with
drawals in December. 1894, and January
and the early part of February, 1895, were
due almost entirely to feeling of appre-
hension in the public mind, which IN
creased in intensity from day to day until
it nearly reached the proportions OF
panic, and it was evident to all who were
familiar with the situation that unless et-
fectual stress was promptly taken 10 cneck
the growing disirust the government would
be compelled within a few days to suspend
gold payments and drop to deprecated
silver and paper standard. More than
S43,000,000 of the amount Withdrawn
during the brief period last mentioned was
not demanded for export. but was taken
out by people who had become alarmed on
account of the critical condition of the
treasury in its relations to the currency OF
the country.
1.-THE purchase of 100000 ounces of
gold followed, it being in the contract that
not less than one-half of the gold was to
of the gold had been furnished from abroad
the secretary, in order to prevent disturb
ance in the rates of foreign exchange at a
critical period. and avoid condition which
would force gold exports and consequent
Withdrawals from the treasury, acquesced
in departure from the literal terms of the
contract, that one-half of the coin should
be procured abroad and accepted deposits
of gold then held in this country to COM
plete the delivery. Ordinary prudence
demanded that the success of the plan to
protect the treasury against Withdrawals
should not be endangered by insisting
upon a strict compliance with all the de-
tails of the contract, especially as the
government could sustain no loss and the
whole amount of gold stipulated for was
secured.
The amount of bonds issued under this
contract was $50, ,9l5.4 400, and the amount
of gold received was $50, i 6,244 81.
The beneficial effects of this transaction,
the secretary says, were felt Immediately,
not only in this country. but in every other
having commercial relations with us.
CONFIDENCE RESTORED.
"Confidence in our securities" he con-
tinues, twas at once restored and the en-
couraging indications of increasing pros
perity still continue, and it is reasonably
certain that if our progress is not checked
by q repetition of large demands upon our
resources or by failure to meet the just
expectations of the people in respect to the
reformation of our fiscal system. we are
entering upon an era of material growth
and development not surpassed IN our
history. The safety of the existing situa-
ton, however, is constantly menaced and
our further progress toward the complete
restoration of confidence and prosperity
is seriously impeded by the defects in our
currency laws and the doubt and uncer-
tainty still prevailing in the public mind,
and especially abroad, concerning the fu-
ture monetary policy of the government.
Until these defects in our laws are RENE
died and these doubts are removed, there
can be no satisfactory assurance of imInu-
nifty from periodical disturbances growing
out of the obligations which the government
has been compelled to assume in relation
to the currency. Our past experience with
the United States and treasury notes has
clearly shown that the policy of attempt
ing to retain these obligations of the gov
ernment permanently as part of our cir
culating medium. and to redeem them in
coin on presentation and reissue them
after redemption. must be:abandoned. or
that such means must be at once provided
as will have a tendency to facilitate the
efforts of the secretary of the treasury to
accumulate and maintain reserve III coin
sufficient in amount to keep the public con-
stantly assGred of the stability of our en-
/ tire volume of currency, and of our ability
at all times to preserve equality in the
-changeable value of its various parts. The
latter alternative, which, in my opinion, if
adopted, would not afford the relief de-
+manded by the existing situation, necessa-
rily involves such large increases of the
interest-bearing public debt from time to
time and would impose permanently upon
the government such erroneous and inap-
T. ipropriate duties in relation to the paper
currency of the country that it ought not to
Ebe favorably entertained except as last
fba fhea
of public faith and the preservation OF the
Sinviolability of the present contracts.
THE ISSUE OF BONDS.
1.-THE issue of bonds,'' he says, "to pro-
cure coin for the reserve, which is the OH
ly effectual method now available under
the law, will, unless conditions which have
already been developed by the present pol
icy is radically changed, ultimately result
in the creation of public debt much
larger than could be required to retire and
cancel the notes, and the annual interest
charge would be much greater than 1t
would be necessary to incur on a new is
sue of bonds adapted to the present cir
cumstanees of the government and the
well known preferences of investors. IT,
however, an attempt is to be mad9 to keep
the United States and treasury notes per-
manently in circulation by reissues after
redemption, and The government is to be
permanently charged with the duty of sus-
tanning the value of all our currency, paper
and coin alike. the conclusion cannot be
avoided that the policy of issuing bonds for
the accomplishment of these purposes
must also become permanent, and such adj
ditional powers must be conferred upon
the secretary as will enable him to execute
the laws relating to these subjects with the
least possible disturbance of the business
affairs of the people and the least possible
charge on the treasurer.
~ am thoroughly convinced that this pol
icy ought not to be continued but that the
United States and treasury notes should be
retired from circulation at the earliest prac-
ticable day and that the government should
be wholly relieved from the responsibility
of providing credit currency for the peo-
pie.
"lt would be difficult if not impossible to
devise more inconvenent, dangerous or
expensive system than the one now in OPP
Grafton under the laws providing for the is-
sue, redemption and reissue of legal tender
notes by the government,
RETIREMENT OF GREENBACKs.
"There has never been a time since the
close of the war; the secretary says,
''wten the gradual retirement and cancel
lation of the United States would not have
been benefit to the country, nor has there
ever been a time when the issue of addi-
tlonal notes of the same character would
not have been injurious to the country.
"lf our legal tender notes were retired
there is abundant reason TO believe that a
very large amount of gold which has been