Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1895-12-04

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Tna crrrsncv denominated United
States notes and commonly known as
greenbacks. was issued In large Voiuihe
dnrinp the late civil war, and was IN
tended originally TO meet the exiSehcies
of that period. 1t will be seen by a refer
ence TO rhe debates in Congress at the tlme
the laws were passed authorizing the issue
of these notes. that their advocates de-
1 Glazed tbev were intended for only tenn
n,r.rv use and to meet the emergency of
war Tn almost If not all the laws relat-
inc IN them some provision was made
communicating their voluntary or com
nnISorv retirement A large quantity Of
tbnm however. were Kept on foot and
| mingled with the currency of the country,
"a that ut the close of the year 1871 the
amounted IN 1881 e99 073. Immediately
sfrer that date and in January, 1875. "A law
was nassed providing for the resumption
of snec;e pavments by which the secretary
of the treasury was required, whenever
,daitional circulation was issued TO ra
.ion,l hanks. to retire United States notes
ennal in amount to 50 per cent. of such
,ddjtional national bank circulation until
sncb notes were reduced to $780, 600, coo.
This law further provided that on and af-
limited States notes then outstanding
sbould be redeemed in coin, and in order
+, nrovidc and prepare for such redemp-
ton the secretary of the treasury was au-
tborizcd not orly to use any surplus
rrvenues of the government, but to issue
hords of the United States and dispose OF
them for coin, and to use the proceeds for
the purposo contemplated by the statute
In MAY, 1878, and before the date thus ap-
roipted for the redemption and retirement
of these notts, another statute was passed
forbjdding their further cancellation and
retirement. Some of them had, however,
been previously redeemed and cancelled
upon the issue Of additional national bank
circulation, as permitted only the law Of
1879, so that the amount outstanding at
the time of the passage Of the act forbid
ding their further retirement was S3i6,
6Sl, 0l6.
The law of 1878 did not stop at diStinci
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
belong to the United States, they shall not
be retired, Cancelled or destroyed, bat they
kept in circulation" This was the condi-
ton of affairs on the first day of January.
1879, 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 anomalous situation of owing
to the holders of its notes, debts PAYABLE in
| ;oL har ha
retired by receiving such notes in dis
charge of obligations due the COVE eminent
or cancelled by actual payment in gold. L.
was forced to redeem without redemption
and to pay without acquittance. There
had been issued and sold 800, 500, 900 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 sufficient to meet the
demands which might be made upon it for
the redemption 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 been since called our gold
reserve and 500, 600, 600 has been regarded
as an adequate amount to accomplish its
object. This fund amounted on the first
day of January. 1879 to $114, 1893, 800, and
though thereafter constant fuctuatiDg
it did not fall below that sum until July,
1899. In April, 1898, for the first time
since its establishment, this reserve
amounted to less than 500, 600, 600, con-
tanning at that date only s97, OIL $50 II
the meantime, and in July, 1890, an act
had been passed directing larger govern
mental monthly purchases of silver than
had been required under previous laws
and providing that in payment for such
silver. treasury notes of the United State
should be issued, payable ON demand in
gold or silver coin at the discretion of the
secretary of the treasury. 1t was, how
ever declared in the act to be 1.-The estab-
lished policy of the United States to main
tain the two metals on parity with each
other upon the present legal ratio. or such
ratio as may be provided by law Il
view of this declaration it was not deemed
permissible for the secretary of the treas
ury tn exercise the discretion in terms con
fcrred on 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 tw,
s metals would be destroyed, and grave and
dangerous consequences would be precip
baLeu ny allrlnln9 or acccntuAtlng the con
stantly widening disparity between their
actual values under the existing ratio IL
thus resulted that the treasury notes issued
in payment of silver purchases under the
law of 1890 were necessarily treated as
gold obligations, at the option of the
holder. These notes on the first day of
November, 1898 when the law compelling
the monthly purchase of silver was re
pcalcd amounted to more than $3.50. OO0
600 The notes OF this description now
outstanding added to the United States
notes still undiminishod by redemption or
cancellation, constitute volume of gold
obligations amounting to nearly $500, 600,
600. These obligations arc the instrn
mcnts which ever since we have had a gold
reserve, have been used to depletc it. This
reserve, as has been stated, had fallen in
April. 1923, to S97, oil $50 1t has from
that time to the present, with very lew
and unimportanJ upward movcmtn :,
steadily decreased, except as it has been
temporarily replenished by the sale Of
THE PURPOSE 60