The Kinsley graphic. [volume] (Kinsley, Kan.) 1890-1940, 1895-12-06


as it has been tenn porarily repienished by the
! sale of bonds Among the causes for this con-
| slant and uniform shrinkage in this fund may
| be mentioned the falling on Of exports under
the operation Of the tariff law until recently In
| force, which crippled our exchange OF COM
modities with foreign nations and necessitated
to some extent the payment Of our balances In
| gold: the unnatural infusion Of silver into our
currency and the increase In agitation
| for its free and unlimited coinage
which have created apprehension as to our dis
position or ability tocontinue 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-
change. which induce the shipment Of our gold
to be drawn against US a matter OF specula-
| ton. In consequence Of these conditions the
| gold reserve on the 1st day of February, 1894,
was reduced to s65.4ss.377 having lost more
| than S31 COZ, 900 during the preceding nine
months, or since April, 1893 Its replenishment
| being necessary and no other manner Of ac-
complishing it being possible, resort was
had to the issue and sale of bonds pro-
vided for by the resumption act Of 1874
Fifty millions OF these bonds were sold. yield
! ing s53, 653. 1851, which was added to the re-
serve fund OF gold then on hand. AS a result
| OF this operation this reserve. which bad suf-
| fered constant and large Withdrawals in the
meantime. stood on the 9th day OF March. 1894.
| at the sum of S107 ,446,s0a. Its depletion was.
however. Immediately thereafter SO accelerated
that on the 3)th day Of June, 1891. it had fallen
! to S6iS. OPS, thus losing by Withdrawals more
| than s42, 10000 in five months and dropping
slightly below this situation when the sac of
| 100000 in bonds was effected for its redemp-
| ton. This depressed condition grew worse.
and on the 2Oth day of November, 1894,
our gold reserve was drained to 81. 69.Ol.
1t became necessary to again strengthen it.
This was done by another sale of bonds
amounting to s5O.0o0 900. from which there was
realized $685. 800 with which the fund was in
creased to gill ,0l2.02 on the ith day Of De-
cember, 1894 Again disappointment awaited
the anxious hope for relief There was not
even a lull in the eXaSperating Withdrawals of
gold On the contrary. they grew larger and
more persistent than ever. Between the 4th
day Of December, 1884, and early in Febr uary,
1895. a period OF scarcely more than two
months after the second reinforcement Of our
gold reserve by the sale Of bonds 1t had lost
by such Withdrawals more than s59. O00. OOO and
had fallen to s41 O3l ISL Nearly si3 900 OOJ had
been withdrawn within the month Immediately
preceding this situation.
In this emergency. and in view Of Its sur
rounding perplexity. it became entirely appar-
ent to those upon whom the struggle for safety
was devolved not only that our gold reserve
must, for the third time in less than thirteen
months. be restored by another issue and sale
of bonds bearing rate Of interest and badly
suited to their purpose. but that plan must
be adopted for their disposition promising bet
ter results than realized on the previous sales.
An agreement, therefore, was made with
number of fnanciers and bankers whereby
it was stipulated that bonds de-
scribed in the resumption act of 1873
payable in coin thirty years after their date,
bearing interest at the rate of per cent per
annum and amounting to about 49,, 100000,
should be exchanged for gold, receivable by
weight, amounting to q little more than $685.
100000 Its good results could not be perma-
nent. Recent Withdrawals have reduced the
reserve from Sl07 57l, 23O the 9th day Of July,
| 1895, to $40. $685. 1856
| On the 2Sth Of January. 1895. it was reported
by the secretary of the treasury that more
than 72,0O0.OO0 Of the gold had been with
drawn for boarding shipment during the
year preceding. He now reports that from
January /, 1879, to July II, 1899, period Of
more than eleven years, only little over $2s,-
100000 was withdrawn, and that between July
A. 1892 the date of the passage Of the law for
an increased purchase of silver, and the 1st
day of December, 1895, or within less than five
and half years, there was Withdrawn nearly
$4,000, 900, making total OF more than S4o3,-
100000 drawn from the treasury gold since
January l, 1872 the date fixed in 1878 for the
retirement Of the United States notes.
Nearly 1927, 200 OF the gold thus withdrawn
has been paid out these United States notes,
and yet every one of the SI6, 900 is still un-
Cancelled and ready to do service in future
gold depletions. In other words, the govern
ment has paid in gold more than nine-tenthS
of its United States notes and still owes them
all 1t has paid in gold about one-hah Of its
notes given for silver purchases without ex-
tinguishing by such payment 81 Of these notes.
And added to all this we are reminded that to
carry out this astounding financial system the
government has incurred bonded indebted
ness Of s95.a ,OOJ in establishing gold reserve
and of sl62.31 400 in efforts to maintain it.
1 am convinced the only thorough and prac-
ticable remedy for our troubles is found in the
retirement and cancellation Of our United
called
the outstanding treasury notes issued by the
government in payment of silver purchased
under the act of 1890.
The currency Withdrawn by the retirement
of the United States notes and treasury notes,
amounting to probably less than s6OO0.0O
might be supplied by such gold would be
used on their retirement or by an increase in
the circulation of our national banks. Though
the aggregate capital of these now in existence
amounts to more than s666.00o 1000. their out
standing circulation based on bond security
amounts to only about S9j,O00. 900.
think they ought to be allowed to issue cir
culation equal to the par value Of the bonds
they deposit to secure it. and that the tax on
their circulation should be reduced to II of per
cent. which would undoubtedly meet all the
expenses the government incurs on their ac-
count 1 do not overlook the fact that the can
collation. of the treasury notes issued under
the silver purchasing act of 1890 would leave
the treasury in the actual ownership of Suffi-
cient silver including seigniorage to coin
nearly SI7s0)O,000 in standard dollars. 1t is
worthy Of consideration whether this might
not. from time to time, be converted into dol
lars or fractional coin and slowly put into cir
culation.
In the present stage OF di fficulty it is
not easy to understand how the amount Of our
revenue receipts directly affects it. The i'm
portant question is not the quantity Of money
received in revenue payments, but the kind of
money we maintain and our ability to continue
in sound financial conditions. We are consid-
ering the government holding Of gold as re-
lated to the soundness Of our money and as af-
fecting our national credit and monetary
strength. If our gold reserve had never been
impaired II no bonds had been issued to re-
plenish: If there had been no fear and
timidity concerning ability to continue
gold payment; II any part OF our
revenues were now paid in gold:
and if we could look to our gold receipts as
/ means Of maintaining a safe reserve. the
| amount Of our revenues would be an infiuen-
tial factor in the problem. But unfortunately
| all the circumstances that might lend weight
| to this consideration are entirely lacking. In
| our present predicament no gold is received by
| the government in payment of revenue charges,
| nor would there be IL the revenues we're in
| creased. The receipts Of the treasury when
| not in silver, certificates consist OF United
States notes and treasury notes. issued for sill
| yer purchases. These forms of money are only
| useful to the government in paying its cur
! rent ordinary expenses and its quantity
| in government possession does not in the
| least contribute toward giving US the kind of
| safe financial standing or condition which is
| built on gold alone II it is said that these
| notes If held by the government can be used
| to obtain gold for our reserve, the answer Is
| easy The people draw gold from the treas