Evening star. [volume] (Washington, D.C.) 1854-1972, 1896-09-24
TREASURY FINANCES
Belief That the Troubles Are Over
for a Season
If THE GOLD STANDARD IS ADHERED TO
Reserve Expected to Reach Its
Highest Point for Three Years.
STILL COMING THIS WAY

The imports of gold into the United
States and the condition of the foreign
trade balance have reached point which
leads TO the belief in many quarters that
the financial difficulties of the United
States are over for season, if they vote
in November to adhere to the gold stand
ard. This will be fact of capital import
ance. if ii is borne out by events 1t has
been the belief until within a short time
that the gold exports of the winter would
again reduce the treasury reserve below the
point of safety, that the next administra-
ton would face a new issue of bonds, and
that the endless chain of the legal tender
notes would continue to trouble the treas
ury. There Is now some ground for the
belief that gold exports will be triiing next
winter. that no new issue of bonds will be
required, and that the greenbacks and
other government paper will cease by their
redundancy to eXpel gold, and viii be alb
sorbed by the demands of business. These
events, occurring almost at the moment of
TIE inauguration of the new administra-
tion, in case of the election of Major Nc
Kinley, will be attributed by republican
orators to that fact, and the new admins
tration will feel under compuls;on to
recommend changes in the currency. The
advocates of retiring the greenbackS and
substituting a banking currency declare
that the old evils will return when the
pressure for money is less acute. but they
admit that they will have difficulty in push
ing their campaign against the existing
system when prosperity returns in the
natural course of events under it's opera
ton.
The Gold Reserve.
The gold reserve promises within an
other fortnight to be larger than at any
time since 1t began to so downward un-
dor no ipf1 0f hp
1891. The gold substantially within the
reach of the treasury yesterday was near
ly S12J, 900 O0O which is only three or four
millions less than the highest points at
tanned under the operation of currency eX-
changes and the sale of bonds during the
past five years The official statement of
the reserve yesterday was s11S.643.SSJ. of
which $40, ,139. $40 was in bullion and S117.-
6i9.6s: in coin, including that held against
SIS, $50 in outstanding gold certificates
There We're losses reported from New York
of S122,5D0. which, with other small losses,
carried the net reserve down to $11S, ,4GO,
342- This sum does not include, however.
about A,O00,O0 which is in the assay
office and Subtreasury at New York in pro-
cess of examination. nor about $3.OOD0O
which is being counted al San Francisco,
or Is due to arrive from Australia. These
two sums alone would carry the reserve
above s125,00OOoO 1t is not certain that
all of the Australian geld, which is COM
ing in the form of English sovereigns, will
be covered into the government reserve,
but 1t will be thus covered If 1t is i'm
ported by New York houses. Other de-
posits at New York and San Francisco are
confidently expected at the present low
rates of exchange. and it will require but
few more such deposits to carry the re-
serve up to s130.OO0,OOO. There is no rea-
sen why this should not be reached with
in fortnight so long as the signs in the
political sky point to the maintenance of
the gold standard by the United States.
Liquidation of Foreign Indebtedness.
1t is net the mere physical imports of gold
which inspire the belief here that the cur
rency troubles of the country are at an
end for time and that redundant cur
rency, gold exports and bond issues are
things of the past. The heroic manner in
which the United States have been lQui-
dating their foreign Indebtedness, paying
not only the interest on their foreign OBJ
legations. but large portions of the prin-
cipal. leads to the belief that gold will
&C ntinue to come this way in the settlement
of trade balances and the renewal of in
vestments. The net payments due on in
terest freight and other current accounts
have been estimated at s145. 725,OOO annual
ly- The actual payments shown by the
returns OF foreign commerce and gold and
silver shipments up to 1893 averaged for
several years only about $7O,OOO.OOO ar
nually. This indicated that half of our
arEual dues to Europe were left here for
reinvestment- startling change took
place for the three years ending June 30
1896. The record of those years showed
net payments to foreign countries of $685.
GoOoO0 in merchandise ard the precious
metals This was a rate of about 500, ,OOO,-
COO per year, and indicated that not only
were the fun interest and freight pay
merits being exacted by Europe, but that
Si6.UOOO of the principal of our debt was
being exacted annually also. The figures
for the first two months of the present
fiscal year have run at even higher
rate and have added s47.OOOOO0 to the net
great excess of shipments of American
merchandise, gold and silver, is regarded
as anording sound basis for the importa-
ton OF gold, so long as confidence in our
purpose to pay gold is not shaken.
Gold to Continue Coming This Way.
The situation is unusual in regard to
the foreign balance that 1t is strongly be
Heved that gold will continue to come to-
ward the United States. even if merchan-
disc imports increase under the stimulus Of
reviving business activity. The restoration
sf normal conditions of foreign exchange
will be promoted, it is believed by the
contraction of the currency which has re-
suited from the locking Up of legal tender
notes in the treasury The United States
rotes now held are SGSOTS, 412 and the Sher-
man notes, S35.01S, 400. The amount held by
the national banks On July IA. the date Of
their last report to the controller, was
$ii0,000,0 600. The holdings of the treasury
and the banks, therefore are about $243
100000, which is mora than half of the
volume of both classes, A11 100000 now
outstanding. Revived business activity IS
expected to increase the demand for money
and to make room for the imported gold m
addition TO outstanding paper. The same
iEflI ence will opera te to continue the treas
Try holdings of notes. because the public
revenue will increase and the monthly eX-
cess of currency disbursements by the gov
ernment will come to end. The banks
overstocked with gold, likely to begin
its payment in the settlement of clearing
house balances, the treasury will again be
provided with a gold income. and the final
restoration of healthy financial conditions
after the purginG process of three years of
depression, will be hailed by the new ad-
Illustration as the expression of the conf
dence of the business community in its pur-
poses and policy.
Collected Political COnfrahmtIou~