The daily morning journal and courier., 1895-12-04

| purchase Of it's unmatured bonds at large premium and by large increase of deposits in national banks and we easily remember that the abuse of treasury accumulation has furnished a most persuasive argument in favor of legislation radically reducing our tariff taxation,
 Perhaps it is supposed that sufficient revenue receipts would in sentimental way improve the situation, by inspiring confidence in our solvency and allaying the fear of pecuniary exhaustion. And yet through all our struggles to main tain our gold reserve there never has been any apprehension 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 cur rent expenses has not entered into the estimate of our solvency. Of course the general state of our funds, exclu- sive 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 of money.
 On July 1, 1S92 more than year and a half before the first bonds were is- sued to replenish the gold reserve, there was a net balance in the treasu- ry, exclusive of such reserve, of less than $1S,000,00O, but the gold reserve amounted to more than $114,000,000, which was the quieting feature of the situation. It was when the stock of gold began rapidly to fall that fright supervened and our securities held abroad were returned for sale and debts owed abroad were pressed for payment. Tn the meantime extensive shipments of gold and other unfavora- ble indications caused restlessness and fright among our people at home. Thereupon the general state of our funds, exclusive of gold, became also immaterial to them, and they, too, drew gold from the treasury for hoard- ing against all contingencies. This is plainly shown by the large increase in the proportion of gold withdrawn which was retained by our own people as time and threatening incidents pro- gressed. During the fiscal year ending June 30, 1894, nearly $S5,000,000 in gold was withdrawn from the treasury and about $77 FOO, 000 900 was sent abroad, while during the fiscal year ending June 30, 1895, over $117Oo0,000 was drawn out, of which only about $66, ,000,- 900 was shipped, leaving the large bal ance of such withdrawals to be ac- counted for by domestic boarding. h. asmuch as the withdrawal of our gold has resulted largely from fright, there Is nothing apparent that will prevent it's continuance or recurrence with its natural consequences, except such a change in our financial methods as will reassure the frightened and make the desire for gold less intense. It is not clear how an increase in revenue, un- less 1t be gold, can satisfy those whose only anxiety is to gain gold from the governments store. It cannot there fore be safe to rely upon increased rev enues as a cure for our present trou- bles.
 A WRONG AFFIRMATION.
 It is possible that the suggestion of increased revenue as a remedy for the difficulties we are considering may have originated in an intimation or al- legation that the bonds which have been issued ostensibly to replenish our gold reserve were really issued to sup ply insufficient revenue. Nothing can be further from the truth. Bonds were issued to obtain gold for the mainte- nance of our national credit. As has been shown, the gold thus obtained has been drawn again from the treasury 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 treasury, they became the money of the government, like any other ordi- nary government funds, and there was nothing to do but to use them in pay ing government expenses when needed At no time when bonds have been is- sued has there been any consideration of the question of paying the expenses of the government with their proceeds There was no necessity to consider that question. At the time of each bond issue we had a safe surplus in the treasury for ordinary operations, ex- elusive of the gold in our reserve. Tn February, 1894 when the first issue oi bonds was made, such surplus amount ed to over $18,000 GOO; in November when the second issue was made, il . amounted to more than $42 900, 900, and in February, 1895, when bonds for the third time were issued, such surplus amounted to more than s100,O00,000. Il now amounts to $9S, ,072, 14230. Besides all this, the secretary of the treasury had no authority whatever to issue bonds to increase the ordinary reve' nues or pay current expenses. I can' not but think there has been some con- fusion of ideas regarding the effects oi the issue of bonds and the results o1 the withdrawal of gold. It was the lat ter process and not the former that by substituting in the treasury United States notes and treasury notes fol gold increased by their amount the money which was in the first instance subject to ordinary government expen' allure.
 THE SILVER.
 Although the law compelling an in creased purchase of silver by the gov ernment was passed on the 14th day 0 July, 1890, withdrawals of gold from tn treasury upon the notes given in pay 1 ment on such purchases did not begin , until October, 1891. Immediately fol lowing that date the withdrawals upol both these notes and United State ,, notes increased very largely, and hay cor+inl1ed 10 slIch an extent that sine