The herald. [microfilm reel] (Los Angeles [Calif.]) 1893-1900, 1896-06-02
TUESDAY. JUNE 2, 1896
PROHIBITING BOND ISSUES

There is little danger of the bill pro-
hibiting bond issues becoming law. 1t
is not probable that it can pass both
houses of congress, and it is certain that
if it should secure a majority in con-
gress, it would be vetoed by the presi-
dent when it reached him. 1t is per-
fectly apparent that the necessary two
thirds majority could not be mustered
to pass it over veto. So there is no
need of worrying about it. OF course
the measure is unwise in policy and dis
honest in principle. Its passage would
be the signal for another panic. 1t would
involve the reputation of the virtual
agreement the government has made
to preserve the parity of its dollars
This parity can only be preserved by
maintaining a gold reserve, and as long
as the endless greenback-tre note
chain operates the authority to issue
bonds in exchange for gold offers the
only guarantee that the government
will be able to keep up the reserve.
With the authority to issue bonds
withdrawn, raid on the gold reserve
would be precipitated and in short order
its exhaustion would ensue, then every
silver dollar in the country would sink
rency would resume about the status
1t occupied previous to the resumption
of specie payments The 424 900
standard silver dollars coined by the
United States, now worth in the hands
of their holders 100 cents each, would
then be worth about So cents each. The
difference between these two figures
would represent the loss every person
holding silver dollars or having credits
that their debtors could liquidate in sill
yer dollars would suffer. The note issues
of the government would be worth the
bullion value of the silver the govern
ment would be obliged-the gold being
ell gone--to pay them in, if they were
paid at all. The only dollar that would
remain a 100-cent dollar would be that
made of gold.
Thus from currencies aggrega ting in
round figures $1,000, 900, 900, each kind as
good as the other in the markets, we
would drop to $500, 100000 of gold cur
rency worth what it purports to be, and
about $500, 100000 worth of silver and
paper currencies valued in the markets
at As to so cents less than their face.
This would mean one of those Soon
about. 1t would be contraction that
every Populist and Silverite in the land
would know without the formalitv of
an introduction.
The way to stop the issuing of bonds
for the maintenance of the gold re-
serve is to so alter our monetary system
that it will not be necessary to main
tain such a reserve; at present it is
necessary. The government should be
taken out of the banking business, and
that Immediately. Banking is a pri-
Nate, not a government, function The
government is in the banking business
SO long as 1t has outstanding promises
to pay, redeemable on demand, and re-
issuabie after every redemption; it has
such outstanding promises to pay to the
extent of nearly $500, 900 in green
backs and treasury notes. Each dollar
of this aggregate is cup on an endless
revolving chain With which gold is
scooped out of the treasury. Congress
should make provision for the retire.
ment of these notes. and the substitu-
ton of some other form of currency
But until this is done the executive must
he left free to buy gold as it is needed
for redemption purposes, il the penalties
of Reputation are to be avoided.
Senator Cullom, yesterday, in the dis
cussion of the proposed bill, sized up its
character and the consequences of it's