The herald. [microfilm reel] (Los Angeles [Calif.]) 1893-1900, 1895-12-15
FINANCIAL TROUBLE BEFORE THE
ELECTION OF 1892

4 OBSERVATION-DISCLOSURES
We have been requested by readers OF
the Evening Post to set forth more in de
tail than has yet been done the history OF
our currency disorder prior to the close OF
1892. The statement that the trouble In
the public finances began only contempt
roneously with Mr.. Cleveland's second
election is made, undoubtedly. by many
partisan speakers and writer's who know II
to be untrue. But it is accepted by hun
dreds of readers and listeners as fact.
The distinct assertion has been made
that everything went well in American
public and private finance while Republic
can policy was in the ascendant; down to
the hour of Mr.. Cleveland's election" the
party organ in this city defines it. The
hour of Mr.. Cleveland's election fell on
Tuesday, November s, 1892. The chal-
lenge of these writer's and speakers, there
fore, is for the production of any evidence
of financial Generalization before that
| date.
The task is not difficult. Naturally, the
annual reports of the secretary and of the
treasurer of the United States provide the
best reflection of official feeling at head.
quarters. All the officials at that time
were Republicans. ALI presumably ac-
cepted office in sympathy with the party's
| puolC putty. lev WIG ldSt IStoEt Win dhy
strain of cheerfuness issued by the treas
ury was the one put forth at the close of
| 1890 by Secretary Window. We quote
his concluding words by way OF contrast
with the dismal comments Of his successor.
Mr.. Window criticized the silver purchase
law of 1890 merely because it provided
only for the purchase of 100000 ounces
monthly. He and Mr.. Harrison had urged
a law for the purchase of "the entire silver
bullion product of the United States.'
| (Report of $50, p. xlviii.) In spite Of this
reprehensible conservatism on the part OF
| Tin December, 1SY0) thai the silver act of
July IA would tendance the value of that
metal until point were reached where we
could with safety open our mints to the
free coinage of both metals at a fixed
ratio" The laws "beneticial results"
Mr.. Window prophetically concluded, twill
eventually commend it to general APP
prevail"
General approval" came into evidence
rather slowly. Secretary Foster, Mr.. Win
| dom's successor in the treasury, has been
called the Mark Tapley of government
| finance. If there was bright side visible,
to the most painstaking scrutiny, in the
| to discern it. The reader will therefore be
| astonished to learn that the secretary's re-
| port of 1891 contains not one word about
! the prospects of the currency. He is forced
to record the decline in the price of silver
| from $l.2l to 90 cents per ounce, and the
failure of the years revenue to meet the
annual snking-fund appropriation. even
after the national bank-note fund had been
| seized to swell the balance. But he re-
Trains from discussion CT these awkward
| facts, leaving his subordinates, as the head
of many an institution has done before, to
wrestle with unpleasant details.
But the subordina es wrestled to some
| purpose, so far as concerns the statement
of the truth. Let it be noticed that 1t was
| exactly one year after Mr.. WINDOWS
promise of "beneticial results'' and "gen-
eral APPROVAL that the treasurer of the
! United States, in December, 1891. made
| the following comments on the situation:
'Such heavy exports of gold as signal
| ICED the last six months of the year, the
heaviest recorded in the history of the ma
ton, naturally excited profound interest,
not only at home, but throughout the
whole world. To the treasury this outflow
was particularly significant, since the
treasury was obliged to furnish all the ma
! terial. These movements were
the result, apparently, of the operation of
natural laws. The condition of
things that has made it possible, whether
due to domestic or foreign causes, to flnan-
cial legislation or to the state of trade.
would seem to be worthy of the
most careful study"
With this eminently prudent conclusion
and with the precautionary remark that
mo attempt is here made TO throw any
light on the subject. further than to state
the facts" Mr.. Nebeker dismissed the
matter. But we doubt If ever before in
| the history of government finance has a
| bureau officer offered as a possible eX-
PLANTATION of trade decentralization law
passed by his own party. and officially de-
scribed by his own chief. twelve months
before, as statute assuring "beneticial
results" and certain of general APP
prevail"
Events however moved faster than Off
cial inquiries. The progress of disease, in
the average man, may safely be traced by
the attention paid by him, in his thoughts
and conversation, to his liver, his stomach,
his lungs. The man in health neither
talks nor thinks of such things. The
Treasury report for the fiscal year ending
June 80. 1892. has pages on the gold re-
serve, and all in doleful and apprehen.
sive tone. Secretary Fo ,ter's cheerfulness
has now forsaken him utterly. Far from
pointing out 'beneficial resuts' or appeal
ing for general approval" he pleads with
provide for redemption of the Treasury
notes of 1890, and begs for additional
revenue. lone of the ADVERTISEMENTS of
the Treasury is "the inability . to
keep up a sufficient gold supply" Mark
Tapley has so far taken up the role of
! Oasbanurd tlldt ne IOreS6eS glOOInlly tn6
exhaustion of the surplus gold reserve.
REPORT of 1892, page Xxix.) He has not
been able to meet the annual sinking-iund
requirements, even with the help of ths
surplus inherited from Democratic adj
ministration, and thinks it "hardly prob
able that more than about 81 600, 900 can
be credited to the fund during the present
fiscal year, as against legal requirement
| of 4S,000,000 The Treasurer, as
in 1891, is more colony and more speci-
fic. He points out that heavy pressure
of legal tenders for redemption
began in July, 1892, that 'gold exports,
commonly ceasing in July, continued until
SEPTEMBER. while the return shipments,
usually commencing early in the autumn,
have not occurred at all" This, by the
way, at the time when Mckinley was NOV
ing trumphantly from town to town,
telling enthusiastic Republican audiences
of the $200,O00,000 European gold lin
buckram) brought here under the opera
tons of his tariff law. Only 3 2-3 per cent
of customs receipts at New York city, the
treasurer's tables of 1892 point out, we're
being paid in gold, against l per cent in
the same month of 1891, and $50 per
cent in 1890. Percentage of payment in
treasury notes has risen from 3 y in 1890
TO 2S.4 in 1891 and $40 in August, 1892.
The treasury gold reserve had fallen, since
the passage of the silver purchase law,
$79,7SS, O13, and had approached within
100000 of the official danger-line.
The governments ordinary revenue had
decreased S4S, 143, 1913 since 1890; it's ex-
i. Al =