The herald., 1896-01-07
TUESDAY. JANUARY 7. 1890
BONDS AGAIN

Faced by a declining gold reserve
and an incapable and cowardly con-
gress, the administration has deter
mined on another issue of bonds for
the purpose of replenishing the treas
ury with gold. The issue is as regret
table as it is necessary. Under the
circumstances, however, there is no
other course to be pursued The credit
of the government of the United States
rests on the ability of the latter to
continue the redemption of its paper
in the standard money of the country
When it ceases redemption it will be-
considered as the individual unable to
meet obligations at maturity-bank-
rupt. President Cleveland has time
and again deprecated the necessity of
buying gold for the purpose of satisfy
ing an apparently interminable de-
mand, and he has repeatedly asked for
the kind of relief that would obviate
such necessity. But his depreciation
and requests have been in vain. Con-
gress, in its incapacity or cowardice or
both, has failed to take the needed ac-
tion. and the responsibility of uphold
ing the public credit with the means at
hand has been left on the president.
He has borne that responsibility ably
and courageously.
The situation is plain, and to those
who will frankly and without prejudice
consider it the remedy should bs ap-
parent.
The country has outstanding about
$346, 100000 in greenbacks and about
$155,000,000 in treasury notes of 1890.
besides silver certificates. We have
pledged ourselves by law to redeem all
this paper in coin. This presumably
means any legal tender coin, and nom
inally gives the secretary Of the treas
ury the option of paying out gold or
silver in redemption, but really does
nothing of the kind. The option as to
the kind of money that government
paper is to be redeemed in rests prac.
tically with the holder Of the paper, be-
cause of the statutory declaration that
it is the policy and intent of the gov
ernment to maintain all its dollars at a
parity.
The gold dollar is commercially
worth one hundred cents; the silver
dollar is similarly worth about fifty
cents. The silver dollar will be taken
in the exchanges of trade and the
liquidation of debts just so long as it
is exchangeable at the treasury
for the gold dollar. When the
holder of greenback or treasury note,
either Of which represents silver as
much as gold, presents the same at
the treasury and demands and receives
gold to the amount the paper stands
for, the cover nment has preserved the
equality of the silver dollar with the
gold unit. If the holder of this paper
we're refused gold he would know that
the government did not, despite its
formal declaration, intend to keep the
silver equal to ths gold dollar, because
it refused to give the latter for the
former. And as the gold dollar is sat
isfactory to everybody and the silver
dollar distrusted by many, the holders
of government paper invariably seek
its redemption in the former. So it is
gold and not silver that in response to
the unceasing domand of the paper
goes out of the treasury vaults.
This withdrawal OF the yellow stuff
from the treasury would have limit
but for another law that constitutes a
most important part of the wondrous
financial system which the genius Of
the Sherman tribe of financiers has
given patient and rather goodnatur-
edly Indifferent people, and that is the
law which requires the treasury de-
partment to reissue the greenbacks and
notes as fast as received and thus keep
them in circulation. That is, their re j..
demptionis but temporary. They are
repeatedly redeemed and never paid.
The greenback and the treasury note
represent public debts, they are
promises to pay money, aud not in
themselves real money. Yet with ex-
listing financial legislation the country
is continually paying the debt they
signify without decreasing the amount
one dollar.
Though gold is the REDEEM ptive metal
there is no way by which the govern.
ment can secure it in desired amounts
with certainty except by the issue Of
bonds, for under the law the paper
money is receivable for taxes and is in
consequences practically the only
money the government receives for
public dues. And as before stated, this
paper must be again sent out to take