The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1895-12-04

the general state OF our funds. exclusive OF
gold. was entirely immaterial to the foreign
creditor and investor. His debt could only
be paid In gold, and his only concern was
our ability to keep on hand that KIND OK
money.
on July /. 1892. more than a year and
half before the first bonds were issued TO re-
plenish the gold reserve. there was a net
balance In the treasury, exclusive OF sucn
gold reserve amounted TO more than $ll4,-
Oo,bo. which was the quieting feature OF
the situation. II was when the stock OF
gold began rapidly TO fall that fright super
vened and our securities held abroad were
returned for sale, and debts owed abroad
were pressed for payment. In the mean
unfavorable Indications caused restlessness
and fright among our people at home.
Thereupon the general state OF our funds,
to them. and they 100. drew gold from
the treasury for boarding against all con-
tingencies. This Is plainly shown by the
large. increase In the proportion of gold
Withdrawn, which was retained by our
own people as time and threatening incl
dents progressed. During the fiscal year
nahg 1Sar w. iS rom nearly IN g1 nd
about Nl,O00000 was sent abroad, while dur
ing the fiscal year ending June 30. 1895, over
s ss Ky a0O was drawn out. Oh which only
ance OF such Withdrawals to be accounted
for by domestic boarding.
lnaSmucn as the withdrawal Oh our SOlu
has resulted largely from fright. there is
nothing apparent that VIII prevent its con-
tinuance or recurrence with its natural con-
sequences. except such a change in our
financial methods as VIII reassure the
frightened and make the desire for gold less
intense. 1t is not clear how an increase OF
revenue. unless 1t be in gold. can satisfy
those whose only anxiety Is to gain gold
from the governments store. 1t cannot
therefore, be safe 10 rely on increased rev.
enues as cure for our present troubles.
WHY THE BONDS WE'RE ISSUED.
1t is possible that the suggestion of in
creased revenue as a remedy for the diff
cuities we are considering may have orig
mated In an intimation of a distinct al
legation. that the bonds which have been
issued, cstensibly to replenish our gold re-
serve. were really issued to supply INSULT
cient revenue. Nothing can be further from
the truth. Bonds were issued to obtain
gold for the maintenance of our national
credit AS has been shown. the gold thus
obtained has been drawn against the treas
/ ury upon United States notes and treasury
notes. This operation would have been
promptly prevented If possible. But these
notes, having thus been passed TO the treas
ury they , became the money Of the govern.
funds. and there was nothing TO do but 10
use them a In paying government expenses
At no time when bonds have been issued
has there been any consideration of the
question OF paying the expenses of govern
ment with their proceeds. There was no
necessity to consider that question At the
time of each bond issue we had a safe sur
plus in the treasury for ordinary operations
exclusive exclusive Of the gold in our reserve; In
was made, such surplus amounted to over
$ls.0O0,0O0 in November. when the second
$40. 600, and in February. 1895, when bonds
for the third time were ISSUED. such surplus
amounted to more than $10O.0o0,000. 1t now
the Secretary of the Treasury had no au'
thority whatever to issue bonds to Increase
the ordinary revenues or to pay current ex-
penses.
I cannot but think there has been some
confusion Of ideas regarding the effects OF
the issue OF bonds and the results of tn.
withorawal or gold. 1t was the latter pro
| In the treasury United States notes anc
treasury notes for gold, which increased
| Dy their amount the money which was IL
| the first instance subject to ordinary gov
| ernment expenditure.
| Although the law compelling an increased
purchase OF silver by the government was
passed on the 18th day of July, 1896 with
| draWals or gold from the treasury upoi
me notes given In payment on suth pur-
Immediately following that date withdraw
| ais upon both Of these notes and United
states notes increased very largely. am
| have continued 10 such an extent that sine.
the passage Of that law there have beer
.nGre than thirteen times as much gole
taken out of the treasury upon UniteC
states notes and treasury notes issued fol
silver purchases was thus withdra WI
during during the eleven and a half years imme-
| dlateiy prior thereto and after the lst da,
| of January. 1879. when specie payments were
| resumed.
1t is neither unfair nor unjust to chargt
a large share Of our present financial per.
plexities and dangers to the operation o.
| the laws of 1878 and $780, compelling thu
purchase Of silver by the government
which not only furnished a new treasur,
obligation upon which it's gold could bt
withdrawn, but so increased the fear of ar
| overwhelming food OF silver. ard a force
| descent TO silver payments, that even the
| repeal OF these laws did not entirely cure
the evils of their existence