The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1896-01-09
HOW IT WORKS.

The greenback redemption process and
its results as applied to the treasury and
the country is thus described by the
American:
Twenty three months ago the gold
reserve stood at $65.000. 600. on Decem-
Der 31st Last at but $50, S75,966. One
hundred and eighty-two millions of gold
have been added in the interim. 1t has
gone, been paid out in redemption of
greenbacks and treasury notes. 1t has
been replaced in the treasury In the
shape of the paper of the government.
The issues of bonds have failed of their
ostensibIe purpose, that is to keep gold
in the treasury, as could have been
readily foreseen, and as the new issue,
must now fail Artificial means cannot
keep gold in the treasury. To put it
there by borrowing ia but to increase
the demands for redemption, and lead to
greater Withdrawals than would other
wise take place. To borrow gold abroad
and to bring it to America is to locally
inflEte prices, to stimulate imports and
check exports, resulting in an accumula-
ton of an adverse balance of trade, such
as we have experienced after the bond
issues of the past year, an Increased de-
mand for gold for export and an In
creased drain on the gold reserve.
The 1882, 100000 in gold has gone as
the hundred million or more now about
to be borrowed will inevitably go, but
certainly it did not leave q void in the
treasury. The gold was replaced by
greenbacks and treasury notes. and these
were added to the cash resources of the
treasury. So while the issue of bonds
failed of their purpose, they did add
1882, 100000 to the cash resources
of the treasury. In short, the at
tempts to borrow gold have
resulted in borrowing greenbacks and
treasury notes. Half of the United States
loyal tender notes and treasury notes of
1890 thus received by the treasury, have
been reissued, and are now outstanding;
half are still In the treasury. The $780,
600, 900 or so of treasury notes and green
backs still in the treasury. represent an
addition to the resources of the govern
ment; a decrease of actual indebtedness
of like amount
And the $50, O00 900 or so outstanding;
why are they outstanding? Surely they
were not given away. They were paid
away to meet the expenses of the govern
ment, because during the twenty three
months since the first bond issue, receipts
have failed to meet the expenditures of
the government by $90,000,000, and, it
being necessary to meet this indebted
ness, the greenbacks and treasury notes
redeemed with the gold borrowed, were
used for this purpose.
February, 1894 the gold reserve stood at
$65, 00O, 900, and the net cash balance at
less than $2O,o0O,O00 Today the gold re-
serve stands at less than $65, 600, 900, and
the net cash balance. chiefly greenbacks
and treasury notes redeemed with the
borrowed gold, at $780, 100000 Thus the
notes received in return for the gold Dor
rowed, to an amount of over $190,000,000,
have been used, $90,000,000 to meet the
defici:, and $9O.0O0,O00 are still in the
treasury.
The greenbacks and treasury notes are
not given away. If not required to NEE;
the deficiency in revenue, they would &C
cumulate in the treasury. As it is, 800,
100000 have been used to meet the ex-
penses of the government, $90,000,000
are in the treasury, and the government
is paying running expenses with the
notes received in exchange for the gold
so arbitrarily and unnecessarily Dor
rowed