Evening star., 1896-03-02
Money Enough to Run the Gov
ernment for Some Time.
GOLD RESERVE NOT 50 CERTAIN
Large Increase in the National
Bank Circulation.
THE MOST SERIOUS FEAR

make a great difference in the supply of
money in the treasury, and raise some in
tcroSting questions as to the future policy
OF the administration. The supporters of
the President are confident that no further
loan will be required during the present
administration. The full proceeds of the
loan will add Sill, ,000,G00 to the cash bal
ance and carry the total above s2S0,000, 600.
This furnishes money enough TO run the
government until March 4, 1891 when puz-
zling financial problems VIII be dumped
upon the incoming administration. Several
Interesting results may follow the issue of
the loan however, upon the legal tender
circulation, the bank note crcula ton, the
| issue of gold certificates, and the coinage of
sold. Thus far the amount paid into the
treasury for the bonds has been s9l,OOl 192
of which $S4, go 260 has been on account of
the principal, N,37S,344 account OF the
premium and $1O4,SJS for accrued interest.
The amount remaining to be paid is slT.-
eoWD, and a considerable portion of this
is likely to be received within short time.
The division of loans and currency in Sec
retary Carlisle's office has been working
over time preparing the bonds for dis;rbu-
| ton and having them properly recorded.
The officials have kept well up with the
rival of deposit receipts at the treasury,
Tor these receipts do not always come
promptly as the cash for which they are
issued TO depositors. The actual issues of
bonds up to the close of last week were
slightly in excess of $75,oo0.o00, and the
! latest classification made showed that $780,.
i"'s loo were coupon bonds, and S21..Wi 800
were registered. This is a much larger
proportion of coupon bonds than are out
standing in the case of other loans, but
this is always the experience when loan
is first issued. The law permits the trans
formation of coupon into registered bonds
ly the Treasury Department, but does not
permit the transfer of registered back into
& h0n1G
ferrred by permanent investors. because
the principal can be recovered upon proving
property in case of loss, which cannot
readily he done in the of coupon bonds,
negotiable in the hands of the holder. The
result Of this rule is that bonds are largely
taken in the coupon form by the brokers
who first subscribe, in order 10 make them
easy OF transfer. and are turned into regis
tered bonds after they have found tneir
| lcdgment in the hands of investors.
The Gold Reserve Not Certain.
While there VIII be plenty of money to
carry on the government for long time to
come with the present large treasury bal
aEce, it is not SO certain that the gold
serve: will continue at safe figure. The
friends OF the administration believe that
the losses of this spring and Summer VIII
not be large enough to greatly reduce the
leserve, in view of the prevailing low rates
of foreign exchange and the contraction CT
the currency which the accumulation of
the proceeds of the loan has caused The
legal tender notes in the treasury at The
close OF the week We're $1:;,,Et,, $40 in United
States notes. and $50, 1Gl ,IiS in Sherman
Eotes, leaving outside the treasury ..boGt
S'SIM'Wo, but over $iDD,ODWD of these
notes are usually held in bank reserves.
The treasury would be likely to retain the
legal tenders, as far as possible in
they were presented largely for redemption
in gold, and every dollar SO held wout re-
duce the pressure OF the outsta tand.ng noes
upon the reserve. 1t has not yet been Sc
cided to issue gold certificates upon de-
pests of gold with the treasury. The act
o: July II, 1852. prescribed That the Sec
| letary of the Treasury is authorized and
| directed to receive deposits of gold coin
with the treasurer or assistant treasurers
of the United States. in sums not less than
twenty dollars, and to issue certificates
therefor in denominations of not less than
twenty dollars each" The Secretary of the
Treasury was directed to suspend the issue
of such certificates whenever the gold re
serve dropped below s1oDWW,En. and this
suspension has practically been in force
ever since the spring of 1888. The question
was raised, on previous occasions, when
the reserve was carried above SlW,En.,s
whether the issue Of gold certificates should
| be resumed Secretary Carlisle took the
ground that it was not wise to resume the
| issue while the reserve hovered so close to
| the danger line. and he has not yet given
| any orders for the issue of certificates He
| has, on the contrary during the last Con-
| of all laws authorizing the issue of such
certificates. The ground of opposition IS
| that they afford more convenient means
OF carrying gold to bankers and private
holders and tempt them to keep gol! within
| their own reach which they might other
wise pay into the treasury put in gen
eral circulation. The manner in which the
certificates are priced, even above gold coin
is indicated by the fact that less than So
| 'sGl.WW have been paid for the recent poEd
issue. and that the amount outstanding is
still $l3.94l.!f'9. 1t is possible that cert!ti-
Gates will be issued if the reserve remains
substantially intact a: $12.,,cHN,MW, but there
will be no haste in putting them in circu-
! lat on.
| increasing National Bank Circulation.
The circulation of the national banks
already shows a marked tendency to en-
pansion upon the basis OF the new bonds.
The actual increase in circulation during
February has been from So12 800 at the
beginning of the month to $2I7,6.4,a50 at
| the close of last week. This increase of So
O19,GJ0 is only a partial indication of the
increase in bank-note circluati tion which
| is about to take place. The orders received
by Controller Eckeis for new circulation
| during January, before the bids for the
bonds We're opened, footed up about Sic
uUo,h#, and the orders received during.
February have been more than 81 tsta tElo
A portion of this s16,G0O.G0 in c:rcula ton
cause of the failure of the banks which or
dered 1t to bid high enough to obtain any
of the bonds, but most of the banks which
went far enough to order the printing of
the notes probably counted upon buying the
bonds in the market if they failed 10 win
them in the popular bidding. The usual
formaHties in getting the bonds 10 their
ownsrs and back again with proper in
dorsements to the treasury, through the
fifteen or more processes through which h
they have TO pass before their final locie-
ment with the United States treasurer las
security for circulation, require consider
able tine, and many of the bonds intended
to secure circulation have not yet COM
pleted their rounds of the varotis officials
The number of bonds which have been
properly certified and delivered to the
treasurer has been about s6O9D,ONj since
February !. and is being increased Gailv,
An addition of sl6,0O0OoO to the bank-noie
circulation on February would carry the
total to about s22S, .GO0, which IS the
highest point attained since the sprins of
1883.
Gold Coinage.
The amount Of gold coinage imposed upon
the mint bureau by the receipts of gold for
the bonds will not be so large as would
have been the case if the great majority