Birmingham state herald., 1895-12-04

their return. The statute in so many words provides that these notes when re- ceiyed 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 govern ment could not refuse to pay out United States notes and treasury notes in cur rent transactions when demanded and in- sist on paying out silver alone, and still maintain the parity between that metal and the currency representing gold.
 Besidesath accumulation in the treas- ury of currency of any kind exacted from the people through taxation IS justly regarded as an evil, and it cannot proceed far without vigorous protest against an unjustifiable retention of money from the business of the country and denunciatiOn of scheme of tax ation which proves itself to be unjust when it takes from the earnings and in- come of the citizen money so much in excess of the needs of the government support that large sums can be gathered and kept in the treasury. Such condl- ton has heretofore, in times of surplus revenue, led the government to restore currency to the people by the purchase of it's unmatured bonds at large pre- mium and by large increase of it's de- posits in national banks, and we easily remember that the abuse of treasury ac- emulation has furnished almost per-
 
 radically reducing our tariff taxation. Perhaps it is supposed that sufficient rev enue receipts would in a sentimental way improve the situation by inspiring conti- dence in our solvency and al1aying the fear of pecuniary exhaustion. And yet, through all our struggles to maintain the gold reserve, there never has been any apprehension as to our ability to pay our way with such money as we had, and the question whether or not our cur rent receipts met our current expenses has not entered into the estimate of our Solvency.
 Of course the general state of our funds, exclusive of gold. was entirely in- material to the foreign creditor and in vestor., 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, 1892, more than year and a half before the first bonds were issued to re- plenish the gold reserve, there was a net balance in the treasury, exclusive of such reserve, of less than $13000. 900. but the gold reserve amounted to more than S144,- 000,00O which was the requieting 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. In the meantime extensive shipments of gold and other variable indications caused fright among our people at home.
 Upon the general state of our funds ex- elusive of gold became also imma- terial to them, and they, too drew gold from the treasury, hoarding 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 progressed.
 During the fiscal year ending June 90, 1894 nearly $S5, 900 900 in gold was with drawn from the treasury, and about $77 900, 900 was sent abroad; while the fis- cal year ending June 30. 1895, shows that over $117, 900 was withdrawn, out of which only about $66, ,000,0 900 was shipped, leaving the large balance of such with drawals to be accounted for by domes- tic hoarding.
 1nasmuch as the withdrawal of our gold has resulted largely from fright, there is nothing apparent that will pre- vent its continuance or recurrence, it's 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, unless it be gold, can satisfy those whose only anxiety is to gain gold from the govern mentS store. 1t cannot, therefore, be safe to rely upon increased revenues as a cure for our present troubles.
 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 distinct allegation that the bonds which have been issued ostensibly to replenish our gold reserve were really issued to SUD- ply insufficient revenue. Nothing can be further from the truth. The bonds were issued to obtain gold for the mainte- nance of our national credit.
 As has been shown, the gold thus ob- tained has been drawn again from the treasury upon the United States notes and treasury notes. This operation would have been promptly prevented if possible but these having thus been passed to the treasury, they became the money of the government, like any other ordinary 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 the question. At the time of each bond is- sue we had safe surplus in the treas ury for ordinary operations exclusive of the gold in our reserve.
 In February, 1894, when the first issue of the bonds was made. such surplus amounted to over $1S00O,O00. Tn Novem- ber when the second issue was made, 1t amounted to more than SAP, ,000,000 and in February, 1895, when bonds for the third time were issued, such surplus amounted to more than $1o0,O00 900. It now amounts to $9s,072, ,420.30. Besides all this, the secretary of the treasury has no authority whatever to issue bonds to increase the ordinary revenues or pay current expenses. I cannot but think there has been some confusion of ideas regarding the effects. If the Issue of bonds and the result of the withdrawal of gold 1t was the latter process and not the former that, by substituting in the treasury United States notes and treas ury notes for gold, increased by their amount the money which was in the first instance subject to ordinary government expenditures. Although the law com polling an increased purchase of silver by the government was passed on the 14th of July, 1890, withdrawal of gold from the treasury upon the notes given in payment on such purchase did not be- gin until October, 1891. Immediately fol- lowing that date the withdrawals upon both these notes and the United States notes increased very largely, and have continued to such an extent that since the passage of that law there has been more than thirteen times as much gold taken out of the treasury upon United States notes and treasury notes issued