The Sauk Centre herald. (Sauk Centre, Stearns County, Minn.) 1886-current, 1896-01-09

ducticn Of duties and secured the passage
of law which reduced the revenue and
forced the treasury TO encroach upon the
redemption fund to meet current obliga-
lions. IL this policy Is adopted to compel
the people Of the United States to surren-
der the best paper currency they have ever
yet enjoyed, 1t will fail. II the revenue Il
wanted to meet current expenditures, 1t
will be furnished either by taxation or by
borrowing, or by both, but to create def
oiencies In order to compel the cancella-
ton of United States notes by the issue of
bonds will not, in the language Of the
president, inject with legislative approx
al"
Mr.. Cleveland in his message complains
that when notes are presented for redemp-
ton and are redeemed the law requires
that they. shall belong to the United States,
they shall not be retired, Cancelled or de-
stroyed, but they shall be reissued and
paid out again and kept in circulation.
The right to reissue Is q necessary Incl
dent to a circulating note. The United
States does what every bank does. BY this
provision 1t furnishes a note for circula-
tiOn better than any other yet devised by
mortal man.
He also says:
..The government was put in the anoma-
lous situation IL owing to the holders Of
Its notes debts payable in gold on demand
which could neither be retired by receiv-
ing such notes in discharge of obligations
due the government nor cancelled by actu-
al payment in gold. It was forced to re-
deem without redemption and to pay with
out acquittanoe"
It seems to me that when the govern
ment redeems It's note the former holder
Of the note has no right to say whether it
shall be reissued or not. The last sentence
Is without meantng. If the United
States redeems itsF note, the holder. has
nothing more TO say, and when the United
States pays out q note 1t always takes q
receipt, which Is an acquittance.
The president says that in April, 1893,
for the first time since it's establishment,
this reserve amounted to less than $780,
600, 900, containing at that date only $97,-
oil, $50. This significant statement made
as to the earliest days of his administra-
ton should have excited in the mind of
the president an inquiry into the cause of
the reduction of the reserve. The real re-
serve for redemption purpose was the pro-
ceeds of 500, 500, 900 bonds and no more.
In addition to this reserve 1t Is necessary
to have on hand to meet current expendi-
lures the sum of from $50, 600, 600 to $40,
100000. At certain periods large balance
Is accumulated to pay the interest of the
public debt and other large disbursements
for the army and navy. Any excess should
be at once applied to the reduction of the
principal of the public debt. This line of
public policy was continued from the 1st
of January, 1879, to the 4th of March,
1893, including the first administration of
Mr.. Cleveland. During this period many
times more gold was deposited in the
treasury than was paid out. Large amounts
of gold were deposited in the treasury for
gold certificates. The public debt was
largely diminished. Not shadow of a
doubt had been cast upon the ability of
the government to redeem it's notes or to
maintain it's reserves. The minimum new
er fell below 500, 600, 900.
The Resumption Law.
Nor would the reserve have fallen below
that minimum during and after 1898 but
for the known policy Of the president to
reduce duties on imported goods, followed
soon by the enactment of the tariff law
now in force, resulting in large reduc-
ton of revenue and in deficiencies that
could only be paid out of the resumption
fund.
1t is but fair to state that the resump-
ton act of 1875 did not segregate the re-
sumption fund from the general balance,
nor did it provide that notes redeemed
should be held in place for the coin paid
out. The secretary of the treasury in his
annual report to congress on the 9th of
December pointed out these defects in the
resumption law. He said:
The secretary expresses the utmost con-
fdence that without new legislation the
entire amount of United States notes now
authorized and outstanding can be easily
maintained at par in coin, even if the pres
ent favorable financial condition should
change, but in order to accomplish this
the coin reserve must be kept unimpaired,
except by such payments as may be made
from it in redemption notes. Notes re-
deemed should be temporarily held in
place of the coin paid out, especially if 1t
appears that the call for coin is greater in
amount than the coin coming in due
course into the treasury or the minis.
sit is suggested that congress might de-
fine and set apart the coin reserve as q
special fund for redemption purposes.
The general available balance is now treat
ed as such fund, but as this balance
may, at the discretion Of the secretary of
the treasury, be unduly drawn upon for
the purpose of payment of bonds 1t would
appear advisable that congress prescribe
the maximum and minimum of the fund. T"
Congress neglected to enact into law the
measures proposed, but neither the con-
gress nor the secretary Of the treasury an
ticipated that the time would come when
this fund would be. applied to pay current
deficiencies In the revenue amounting in
az years to $16e, 600, 600.
The President and ME-. Carlisle Corrected.
Both the president and the secretary
say that no provision was made for tho
happening Of such deficiencies, and say
their only resort was the general fund Of
the treasury composed Of the resumption
fund and the general balance In the treas
ury. But it is due to truth to say that In
February, 1893, short time before the
close Of the Fifty second congress, when
Mr.. Carlisle was member of the commit
tee on finance of the senate and it was
known that he was to be secretary Of the
treasury and when the probabilities Of a
deficiency became apparent, that commit
tee, upon my suggestion, with the appro-
baton Of Mr.. Carlisle, reported an amend
ment to the appropriation bill as follows:
To enable the secretary Of the, treasury to
provide for and to maintain the redemp-
tion of United States notes according to