Middletown transcript., 1895-12-07

der the silverpurohasing act Of 1890 wouli
leave the treasury in the actual ownership
Of sufficient silver, including seigniorage
to coin nearly SITS, ,000, 600 in standard
dollars. It Is worthy OF consideration
whether this might not from time tC
|. time, be converted into dollars or frac.
tionai coin and slowly put into oircula-
ti0n, as in the Judgment Of the secretary
of the treasury the necessities Of the coun-
try should require.
| In the present stage Of our difficulty II
Is not easy to understand how the amount
| OF our revenue receipts directly affects it.
| The important question is not the guam
| tity Of money received in revenue pay
| ments but the kind Of money we main
tain and our ability to continue In sound
| financial condition. We are considering
the governments holdings Of gold as re-
lated to the soundness Of our money and
as affecting our national credit and none
| tary strength.
II our gold reserve had never been i'm
paired; II no bonds had ever been issued
to replenish It; II there had been no fear
and timidity concerning our ability to
continue gold payments; II any part Of
our revenues were now paid in gold, and
Ii we could look to our gold receipts es q
means OF maintaining safe reserve, the
amount Of our revenues would be an in
fluential factor in the problem. But un-
fortunately all the circumstances that
might lend weight to this consideration
are entirely lacking.
II It is said that these notes II held by
the government can be used to obtain gold
for our reserve, the answer Is easy. The
pesple draw gold from the treasury on de-
fIaand upon United States notes and treas
Try notes, but the proposition that the
treasury can on demand draw gold from
the people upon them would be regarded
In these days with wonder and amuse-.
ment And even II this could be done
there is nothing to prevent those thus
parting with their gold from regaining it
the next day or the next hour by the
presentation of the notes they received in
exchange for it.
The secretary of the treasury might use
such notes taken from surplus revenue
to buy gold in the market OF course he
could not do this without paying pre-
MUM. The premium would not remain
stationary, and the absurd spectacle might
be presented Of a dealer selling gold to the
government, and with United States notes
or treasury notes in his hand Immediately
clamoring for Its return and q resale at
higher premium.
Gold and the Revenue.
1t may be claimed that large revenue
and redundant receipts might favorably
affect the situation under discussion by
affording an opportunity of retaining
these notes in the treasury when received,
and thus preventing their presentation for
gold. Such retention to be useful ought
to be at least measurably permanent, and
this Is precisely what is prohibited. SO far
as United States notes are concerned, by
the law of 1873 forbidding their further
retirement. That statute in SO many
words provides that these notes, when re-
ceived into the treasury and belonging to
the United States, shall be ''paid out
again and kept in circulation.
It will, moreover, be readily seen that
the government could not refuse to pay
out United States notes and treasury notes
in current transactions when demanded
and insist on paying out silver alone and
still maintain the parity between that
metal and the currency representing gold.
Besides the accumulation in the treasury
of currency of any kind exacted from the
people through taxation is justly regarded
as an evil, and it cannot proceed far with
out vigorous protest against an unjustif-
able retention Of money from the business
of the country and a denunciation of a
scheme Of taxation which proves itself to
be unjust when 1t takes from the earnings |
and income of the citizen money SO much |
in excess of the needs of government sup |
port that large sums can be gathered and |
kept in the treasury.
Perhaps 1t Is supposed that sufficient |
receipts would in sentimental |
way improve the situation, by inspiring |
confidence in our solvenoy and allaying |
the fear of pecuniary exhaustion. And
yet through all our struggles to maintain |
Dur gold reserve there never has been any |
as to our ready ability to pay |
our way with such money as we had, and
the question whether or not our current
receipts met our current expenses has not
entered into the estimate of our solvency.
OF course the general state of our funds,
Of gold, was entirely immaterial
10 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 of money.
Inasmuch as the withdrawal of our gold
has resulted largely from fright there Is
nothing apparent that will prevent Its con-
tinuance or recurrence, with Its natural
except such change in our
financial methods as will reassure the
frightened and make the desire for gold
ess intense. It Is not clear how an in
,rease in revenue unless 1t be in gold, can
'atisfy those whose only anxiety is to gain
gold from the governments store.
It cannot therefore be safe to rely upon
Increased revenues as cure for our pres
,nt troubles.
why the Bonds Were Issued.
It is possible that the suggestion of in
,reased revenue as a remedy for the diff
,ulties we are considering may have orig
mated in an intimation or distinct allega-
ion that the bonds which have been issued
,stensibly to replenish our gold reserve
we're really issued to supply insufficient
evenue. Nothing can be further from the
ruth. Bonds were issued to obtain gold
or the maintenance Of our national credit.
As has been shown, the gold thus OBJ
aimed has been drawn again from the
reasury upon United States notes and
notes. This operation would ,
ave been promptly prevented II possible,
nut these notes having thus been passed to !
he treasury they became the money Of the :
like any other ordinary gov
rnment funds, and there was nothing to
10 but to use them in paying government
expenses when needed.
At no time when bonds have been is-
ued has there been any consideration OF
be. question of paying the expenses of
government with their proceeds. There
7as no necessity to consider that question.
it the time Of each bond issue we had a
afe surplus in the treasury for ordinary
perations, exclusive Of the gold In our
eserve.
The Silver Purchase Acts.
1t is neither unfair nor unjust to charge Q
large share Of our present financial per-
lexities and dangers to the operation off n
be laws of 1878 and 1890 compelling the
urchase Of silver by the government,
,hich not only furnished new treasury
litigation upon which Its gold could be
'ithdrawn, but 80 increased the fear OF
a overwhelming flood Of silver and
,rced descent to silver payments that
ven the repeal of these laws did not en-
rely cure the evils Of their existence.