Audubon Republican. [volume] (Audubon, Iowa) 1894-1925, 1895-12-05
NATIONAL FINANCES.
Cause and Cure of B ond Issues-Dire Eff
feet of Free Coinage.


Cause and Cure of b ond Issues-Dire Eff
feet OF Free Coinage.
AS we turn from review Of our foreign
relations to the contemplation of our ma
tional financial situation we are immedi-
ately aware that we approacht subject tb OF
other that can engage our attention, and
one at present in such a perplexing and del
wise treatment We may Wen be ercour-
aged to earnest effort in this direction
when we recall the steps already taken
toward improving our economic and finan-
cial situation, and when we appreciate how
well the way has been prepared for fur
gent popular interest in these subjects.
Monetary Evils Not Cured.
BY command of the people a customs
revenue system, designed for the protec-
ton and benefit of favored classes at the
expense of the great mass of countrymen,
and which, while inefficient for the pur-
pose of revenue, curtailed our trade rela-
tons and impeded our entrance to the
markets of the world, has been superseded
by a tariff policy which in principle is
based upon a denial of the right of the gov
ernment to ob5truct avenues to our peo-
pies cheap living, or lessen their comfort
and contentment for the sake of according
especial advantages to favorites. and
which, while encouraging our intercourse
and trade with other nations, recognizes
the fact that American self-reliance,
thrift and ingenuity, can build UP our
country's industry and develop its re-
sources more surely than enervating pa
ternaliSEl.
The compulsory purchase and coinage of
silver by the government unchecked and
unregulated by business conditions and
needless of our currency needs, which for
more than Is years diluted our circulating
medium, undermined confidence abroad in
our financial ability, and at last culminat-
ed in distress and panic at home, has been
recently stopped by the repeal of the laws
which forced this reckless scheme upon
the country. The things thus accom-
Observation-Disclosures their extreme i'm
Nnrt1 nd "a
short of curing the monetary evils from
which we suffer as result of long in
diligence in ill-advised financial expedi-
ents.
Review of Financial Legislation.
The currency denominated United States
notes, and commonly known as green
backs, was issued in large volume during
ally to meet the exigencies of that period.
1t will be seen by reference to the debates
in congress at the time the laws were
passed authorizing the issue of these notes
that their advocates declared they were in
tended for only temporary use and to meet
the laws relating to them some provision
was made contemplating their voluntary
or compulsory, retirement. A large QUAR-
and mingled with the currency of the
country, so that at the close of the year 1874
they amounted to S3S1, 999, 0I3.
Immediately after that date, and in jan
uary, 1875, a law was passed providing for
the resumption of specie payments, by
WHICH the secretary CnG5IredSUny was
required, whenever additional circulation
was issued to national banks, to retire
United States notes equal in amount to 80
per cent. of such additional national bank
circulation until such notes were reduced
to $500, 100000. This law further provided
that on and after the 1st day of January,
1879, the United States notes then out
standing should be redeemed in coin, and
in order to provide and prepare for such re-
demption, the secretary of the treasury
was authorized not only to use any sur
plus revenues of the government, but to
issue bonds of the United States and dis
pose of them for coin, and to use the pro-
ceeds for the purposes contemplated by the
statute
In May, 1878, and before the date thus ap-
| pointed for the redemption and retirement
of these notes, another statute was passed
forbidding their future cancellation and
retirement Some of them had, however,
been previously redeemed and cancelled
CIRCULATION, as permitted by the law OF
1875, so that the amount outstanding at
fnrtH He %as
| The law Of 1878 did not stop at distinct
prohibition, but contained, in addition, the
following express provision: And when
any of said notes may be redeemed or be
| received into the treasury under any law
| from any source whatever, and shall be-
| retired, Cancelled or destroyed, but they
| shall be reissned and paid out again and
! kept in circulation"
Creation of the Reserve.
This was the condition of affairs on the
| LIST day of January, 1879, which had been
| fixed upon four years before as the date
TOR entering Ip9h he the or a wb T
| such abundant means had been provided.
| The government was put in the anomalous
situation of owing to the holders of it's
notes, debts payable in gold on demand
| which could neither be retired by receiv-
| ing such notes in discharge of obligations
| due the government nor Cancelled by actual
| payment in gold. 1t was forced to redeem
| without redemption and to pay without
acquittance. There had been issued and
! sold 495,50O,Oo0 of the bonds authorized by
| the redemption act of 1875, the proceeds of
| which, together with other gold in the
treasury, created a gold fund deemed sui.
| be made upon it for the redemption of the
outstanding, United States notes. This
might be from time to time in the treas
ury available for the same purpose, has
| been since called our gold reserve, and
quate amount to accomplish its Object
! This fund amounted on the 1st day of jan
uary, 1879, to STA, 800, and though there
below that sum until July, 1892. In April,
| 1893, for the first time since it's establish
| ment, this reserve amounted to less than
Oil SiYy .$$S containing 'na' GATE 0niS '''
In the meantime, and in July, 1880, an act
had been passed directing larger govern
| had been required under previous laws, and
providing that In payment for such silver
i
| be issued, payable on demand in gold or
| silver coin, at the discretion of the secre-
| tary of the treasury. 1t was, however, de-
| clarcd insthe act to be 1.-THE established pol
| Icy of the United States to maintain the
| two metals on parity with each other
| upon the present legal ratio, or such ratio
| as may be provided by law" In view of
| this declaration it was not deemed. per-
missible for the secretary of the treasury
| to exercise the discretion in terms con-
| ferred upon him by refusing to pay gold on
| these notes when demanded, because by
| such discrimination in favor of the gold
| dollar the so-called parity of the two metals
| would be destroyed and grave and danger
| Gus consequences would be precipitated by
| Affirming or accentuating the constantly
widening disparity between their actual
values under the existing ratio.
Cause of Depletion OF tao Reserve.
1t thus resulted that the treasury notes
| Issued In payment of silver purchases UNI
| der the law of 1890 were necessarily treat ted
as gold obligations, at the option of the
holder. These notes on the LIST day of Mo-
| vember. 1888, when the law compelling the
monthly purchase of silver was repealed
amounted to more than s155, 100000 The
notes of this description now outstanding,
added to the United States notes still I'M
diminished by redemption or cancellation,
constitute volume of gold obligations
! amounting to nearly $500 000,0 600 These OBJ
legations are the instruments which, ever
since we have had q gold reserve have
hAAx n ff.N-s