Gloucester County Democrat. (Woodbury, N.J.) 1878-1932, 1895-12-05
recommendation did not, however, meet
with legislative approval.

''-~-- - 't''t"' ~ t-PlAyFoi.
A Low Reserve.
In February, 1898, therefore the situa
tion was exceedingly critical With re-
serve perilously low and refusal of con
gressional aid, everything indicated that
the end Of gold payments by the govern
ment was imminent
In this emergency and in View OF its
surrounding perplexities it became entire.
ly apparent to those upon whom the
struggle for safety was devOlved not only
that our gold reserve must, for the third
time in less than 3 months, be restored
by another issue and sale Of bonds bear
ing high rate Of interest and badly suit
ed 70 the purpose, but that plan must be
adopted for their disposition promising
better results than those realized on pre-
ylous sales. An agreement was therefore
made with number Of financiers and
bankers whereby it was stipulated that
bonds described in the resumption act OF
1879 payable IN coin 30 years after their
date, bearing interest at the rate of per
cent per annum and amounting to about
S62, 0OO, 600, should be exchanged for gold,
receivable fy weight, amounting to a lit
tie more than s65, 600, 900.
On the day this contract was made its
terms were communicated to congress by
a special executive message. in which il
was stated that more than SIG 900, 600
would be saved to the government if gold
bonds bearing 3 per cent interest were au-
thorized to be substituted for those men,
toned in the contract
The congress having declined to grant
the necessary authority to secure this saw
ing, the contract unmodifed, was carried
out, resulting in a gold reserve amount
ing to Sl07, 81, 230 on the Sth day of July,
1895 The performance Of this contract
not only restored the reserve, but checked
for time the Withdrawals of gold and
brought on period Of restored confidence
and such peace and quiet in business cir
cles as were of the greatest possible value
to every interest that affects our people. I
have never had the slightest misgiving
concerning the wisdom or propriety of this
arrangement and am quite willing to an
swer for my full share of responsibility
for its promotion. / believe il averted a
disaster the imminence Of which was for
tunately not at the time generally under
stood by our people.
Though the contract mentioned staid
for time the tide of gold withdrawal, its
good results could not be permanent Re-
cent Withdrawals have reduced the reserve
from SlO7, 57l, 230 on the sth day OF July,
1895 to S79, 1888, g66.
A Remedy Suggested.
The government has paid in gold more
than nineten of it's United States
notes and still owes them ALL il has paid
in gold about one half Of its notes given
for silver purchases without extinguish
ing by such payment 81 Of these notes.
When added to all this we are reminded
that to carry on this astounding financial
scheme the government has incurred a
bonded Indebtedness Of S95, 500, 900 in es-
tablishing a gold reserve and of Sl62,
S15, 400 in efforts to maintain it, that the
annual interest charge on such bonded in
debtedness is more than Sl1, 6O0 600, that
a continuance in our present course may
result in further bond issues, and that we
have suffered or are threatened with all
This for the sake Of supplying gold for
foreign shipment or facilitating its hoard
ing at home, a situation is exhibited
which certainly ought to arrest attention
md provoke immediate legislative relief
am convinced the only thorough and
practicable remedy for our troubles Is
found in the retirement and cancellation
OF our United States notes, commonly
called green backs, and the outstanding
treasury notes issued by the government
in payment Of silver purchases under the
act of 1890.
| believe this could be quite readily &C
complished by the exchange Of these notes
for United States bonds of small as well
as large denominations. bearing low rate
Of interest They should be long term
bonds, thus increasing their desirabiiity
as investments and because their pay
ment could be well postponed to a period
far removed from present financial bur
deDs and perplexities, when with increased
prosperity and resources they would be
more easily met
To further insure the cancellation Of
these notes and also provide a way by
which gold may be added to our currency
in lieu Of them, a feature in the pan
should be an authority given to the secre
tary of the treasury TO dispose Of the
bonds abroad for gold il necessary to com
plete the contemplated redemption and
cancellation, permitting him to use the
proceeds OF such bonds to take up and
cancel any of the notes that may be in
the treasury or that may be received by
the government on any account.
The currency withdrawn by the retire
ment OF the United States notes and treas
ury notes, amounting to probably less
than 1886, 600, 900, might be supplied by
such gold as would be used on their retire
ment or by an increase in the circulation
of our national banks Though the ag-
gregate capital of those now in existence
amounts to more than 1864. 600, 600, their
outstanding circulation based on bond Sc
curity amounts to only about $3.50, 0e0,
600. They are authorized to issue notes
amounting to 80 per cent Of the bonds de-
posted to secure their circulation, but in
no event beyond the amount of their capi-
tai stock, and they are obliged to pay /
per cent tax on the circulation they issue
think they should be allowed to issue
circulation equal to the par value of the
bonds they deposit to secure it, and that
the tax on their circulation should be re-
duced to one-fourth Of per cent, which
would undoubtedly meet all the expense
the government incurs on their account.
In addition they should be allowed to sub
stitute or deposit in lieu of the bonds now
required as security for their circulation
those which would be issued for the pUr.
and treasury notes
The banks already existing. II they de-
sired to avail themselves of the provisions
Of law thus modified, could issue circula-
tion in addition to that already outstand
ing, amounting to s47S, 600, 900, which
would nearly or quite equal the currency
proposed to be Cancelled. AT sny rate, 1
should confidently expect to see the exist
ing national banks or others to be organ
lied avail themselves of the proposed en-
couragements to issue circulation and
promptly fill any vacuum and supply ev-
cry currency need
Use For Accumulated silver.
do not overlook the fact that the can
collation. of the treasury notes issued IN
der the silver purchasing act Of 1890 would
leave the treasury in the actual ownership
of sufficient silver, including seigniorage,
to coin nearly sf7S, 900, 600 in standard
dollars. 1t is worthy of consideration
whether this might not, from time to
time, be converted into dollars or frac
tional coin and slowly put into circula-
tion, 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 it
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 i'll sound
financial condition. We are considering
the governments holdings of gold as re-
lated to the soundness Of our money and