The herald., 1896-03-02
MONDAY, MARCH 2, 1890.
THE MKINLEY LAW AND BONDS

A Hsmet subscriber for The HERALD,
having read recently in these columns
that the first issue Of bonds during
President Clevelands present admin
istration was made some months pre-.
vious to the expiration of the McKin-
Icy tariff law, writes to learn the date
Of each of these events.
The issue of government bonds to
which reference was had was in pursu.
ance of public notice dated January
IL, 1894, and the bonds bore date of
February 1, 1894. The bonds we're 5
per cents, and the face value of the is
cue was $500OOOOO. The bonds were,
however, sold at premiums sufficiently
high to bring the net interest paid by
the government down to less than 3
per cent. The repeal of the Mckinley
tariff law took effect August q, 1894,
or more than six months after the bond
issue just noted.
The inquiry of The HERALD's COR
respondent has been no doubt stimu-
lated by repeated declarations made
in the Mckinley organs to the effect
that the bond issues have been neces-
STATED by the iuadequacy of the pres
ent tariff law as a revenue producer,
and that 'if President Cleveland had
the Mckinley law at his back he
would not be obliged to sell bonds in
order to maintain the gold reserve"
These statements are made with such
frequency and positiveness that many
people are deceived. There is no
question but that lie we'll stuck to
will make an impression; of course
truth weighted down with its leaden
heel will in time get around and with
its iron hand efface that impression,
but not until after considerable harm
has been doue.
The simple facts sdduced by The
HERALD on more than one occasion
will make it apparent to all that read
them that as a preventive Of bond
issues and maintainer of the gold
reserve the NICK inley law was a gilt.
tering failure, just as it was as wage
fore stated by The HERALD, a bond
issue for maintaining the gold reserve
was contemplated-in fact, actually
prepared for-long before the first
issue made by the present administra
tion. In the last days of Presi
dent Harrison's term the shad.
ow of the coming raid on the
reserve made its appearance. For
more than year previous to
the departure of Harrison from the
White House, the financial world had
been disturbed by doubt and distrust
It is not pertinent to the question in
hand to discuss the causes of this con-
dition, it is enough to know that the
condition existed. The treasury Off
cials we're conscious of its existence,
and they began to prepare for the
storm that was coming. One of the
steps of preparation was to order the
plates for the printing of bonds, and
when President Cleveland came into
Office he found the facilities for bond
issue ready for use. And this was
ONE YEAR AND A HALF before the
Mckinley measure ceased to burden
the trade of the people. What was the
matter with the Mckinley law as bull
wark of the gold reserve about that
time?
AS matter of fact the potency of
the present tariff law as revenue
raiser. has little if anything to do with
the upholding oe the gold reserve and
the obviating of bond issues. The
revenue might be $l00,000,00O per an
mum greater than it is and yet the sale
of bonds be necessary to keep the re-
serve at par. Practically no gold is re.
ceived in the payment of customs
dues. The receipts OF the treasury are
in silver certificates, United States
notes AMI treasury notes issued for
the purchase Of silver during the ex-
istencs of the Sherman silver pur-
chase law. Gold in quantities has
only been obtained through the sale of
bonds. The depletion of the reserve is
brought about by the redemption of the
Paper promises to pay, which under
the law have to be reissusd as fast as
redeemed. 50 long as the endless note
chain keeps in motion, bond issues for
gold are possible if not probable. The
remedy for the bond evil of the kind
we have had lately lice not in more
taxation but in change of our finar-
oial system. The government will have
v 50 out of the banking bnainAss and