The Providence news. (Providence [R.I.]) 1891-1906, 1895-12-03
srnmont nor cancelled by actual payment in

gold
1t was forced 20 redeem without redemption.
and TO pay without acquittance. There had
been issued and sold s00.500000 OF the bonds
authorized by the redemption act OF 1915, the
proceeds OF which, together with other gold In
the treasury, created gold fund deemed suf-
fcient 10 meet the demand which might be
made upon 10 for the redemption OF the out
standing United States notes. This fund to-
gether with such other gold as might be- from
time to time in the treasury available for the
same purpose. has since been called
Our Gold Reserve,
and sl00.0O00o0 has been regarded as an
adequate amount TO accomplish It's object
This fund amounted Jan. ], v579, to sll4I93-
300, and though thereafter constantly fuctuat-
ing, IL did not fall below that sum until July
1892 In April, 1898, for the first time since its
establishment, this reserve amounted TO less
than $i00,0O00oo, containing at that date only
so oil $50.
In the meantime, and in July. 1890, an act
had been pass, d directing larger governmental
monthly purchases OF silver than had been re-.
CURED under previous laws. and providing
that In payment for such silver. treasury notes
OF the United States should be issued. payable
on demand IN gold or silver coin at the discre-
ton of the secretary of the treasury. II was,
however. declared in the act to be 1.-THE estab-
lished policy OF the United States TO maintain
the two metals on a parity with each other
upon the present legal ratio, or such ratio as
may be provided by law"
In view Of this declaration IL was not deemed
permissible for the secretary OF the treasury
10 exercise the discretion in terms conferred
on him. by refusing to pay gold on these notes
when demanded, because by such discrimina-
tion in favor Of the gold dollar the so-called
parity OF the two metals would be DESTROYED
and grave and dangerous consequences would
be precipitated by affirming or accentuating
the constantly yyideninU dignaritv hotwaay
their actual values under the existing ratio.
1t thus resulted that the treasury notes is-
sued in payment of silver purchases under the
law Of 1890 were necessarily treated rs gold
obligations at the option Of the holder. These
notes on Nov I. 1898. when the law compelling
the monthly purchase of silver was repealed,
amounted TO more than sl55, 5,0oo.0J0. The notes
Of this description now outstanding, ADDED to
the United States notes still undiminished by
redemption OF cancellation, constitute a vol
ume Of gold obligations amounting TO nearly
k500,0000N. These obligations are the instru-
ments which, ever since we have had gold
reserve, have been used TO depleteit
This reserve as has been stated had fallen
IN April, 1893, 20 s97 oil $50. 1t has from that
time to the present, with very few and unim-
portant upward movements steadily de-
creased, except as 10 has been temporarily
replenished by the sale Of bonds.
Among the causes for this constant and uni
the great falling off Of exports under the
operation OF the tariff law until recently in
force, which crippled our exchange Of COM
modities with foreign nations and necesstated
TO some extent the payment sf our balance in
gold; the unnatural infusion of silver into our
currency, and the increasing agitation for Ats
free and unlimited coinage, which have created
apprehension as TO our disposition ability TO
continue gold payments: the consequent
boarding Of gold at home and the stopping Of
investments Of foreign capital, well as the
return of our securities already sold abroad,
and the high rate of foreign exchange. which
induced the shipment Of our gold to be drawn
against, as a matter of speculation.
THE president here aludes to the fact that
the situation steadily grew worse an 1t again
became necessary to strengthen the gold re-
serve. Again disappointment awaited the
anxious hope for relief He then refers to the
agreement with a number of fnanciers and
banks, and saysl:
On the day this contract was made its terms
were communicated 10 congress by a special
executive message, in which it was stated
that more than 16,C0),0O0 would be- saved to
the government il gold bonds. bearing per
cent interest, were authorized TO be substi-
tuted for those mentioned In the contract.
Congress having declined TO grant the neces-
sary authority TO secure this saving. the con.
tract, unmodified, was carried out, resulting
In gold reserve mounting to xlO1 OIL ,2sO on
July g. 1895 The performance of this contract
not only restored the reserve, but checked for
n time the Withdrawals OF gold, and brought
on a period of restored confidence and such
peace and quiet in business circles as were Of
the greatest possible value to every interest
that affects our people. / have never had the
slightest misgving concerning the wisdom or
propriety of this arrangement, and am quite
willing TO answer for my full share of
Responsibility For Its Promotion.
j believe it averted a disaster the immi.
nence Of which was fortunately not at the
time generally understood by our people.
Though the contract mentioned stayed for q
time the tide of gold withdrawal its good re-
suits could not be permanent. Recent with
drawals have reduced the sum from $l01 ,57l,
230 on July 8, 1895, to s7e,333 ,9o5. How long il
will remain large enough TO render its in.
crease unnecessary Is only matter of con-
lecture
The foregoing statement of events and con-
ditions develops that fact that after increas-
ing our interest-bearing bonded Indebtedness
more than Sl62, 600 OU TO save our gold reserve,
we are nearly where wo started, having now
in such reserve $40 a3, $685. against sG5 l3s, ,31'
in February, 1894, when the first bonds were
issued.
Though the amount of gold drawn from
the treasury appears to be very large. as
| gathered from the facts and figures herein
| presented, il actually was much larger, con
| siderable sums having been acquired by the
| treasury within the several periods stated
| without the issue of bonds.
| On JAN -, 1895, 1t was reported by the secre
| tary of the treasury that more than si12 0J0 0V
| Of gold had been withdrawn for boarding ol
| shipment during the year preceding. He nov
| reports that from Jan. 1, lSi0 to July IA, 1890
| period of more than ii years, only littl,
| over s2s,00O0O0 was withdrawn, and that be
| tween July Ia, 1920, the date Of the passage o
| the law for an increased purchase OF silver
and Dec |. 1895, or within less than So years
there was withdrawn nearly $375,0o0,OC0, max
ing total of more than S403, 900, 900 drawn from
the treasury in gold since Jan. /, lS7e the dat,
! fixed in 1919 for the retiremsnt of the UniteC
States notes.
Nearly $S27 10000 OF the gold thus with
drawn has been paid out Of these UniteC
States notes; and yet every one Of the S346, 100,
900 Is still uncancelled and ready TO do servic,
in future gold dcpletions. More than $4,000,
90 in gold has, since their creation in $50
been paid out from the treasury upon tue
notes given on the purchase of silver By the
| government.
And yet the whole, amounting TO $4,000,
| 90 except a little more than sl6,OJ0,0)O, which
| have been retired nv exchanges for silver ai