The Sauk Centre herald., 1896-01-09

secretary GOULD easily have maintained the
reserve and met deficiencies as they OCCUR
red by the proceeds Of the bonds described
An It.
Reduced Revenues Caused Deficiency.
Nor would deficiencies have occurred
had not the president and both houses of
the Fifty-third congress, then In political
sympathy, united In passing law reduc-
Ing the revenue below expenditures for the
first time since the close Of theiwar and
compelled the executive authorities to ap-
ply a fund created for the redemption of
United States notes to meet the ordinary
expenses of the government This DEM
onstrated fact Is the source and foundation
Of all our present financial difficulties.
I do not wish to criticise the sales of
bonds authorized by the resumption act to
meet these deficiencies Under the oircum-
stances the administration was justified in
doing this, even to the Impairment Of the
resumption fund, but 1t ought frankly to
say that the cause of the invasion of the
resumption fund was the deficiency of rev.
enue created by faulty tariff legislation by
the last congress
Such q deficiency is discreditable to the
United States, with its vast wealth and
resources. There is no difficulty In collect
ing by taxation all and more money than
is necessary for Its expenditures 1t is hu-
initiating to read in the newspapers of the
day that our government is negotiating
for money from associated bankers, and,
. like distressed debtori in view of bank
ruptcy, is offered by friendly power it's
accumulated gold to relieve us from our
Supposed financial distress. The true rem
edy is to supply by taxation in some form
nIA mud ,,,,fil is ho
effected, to borrow from the people of the
United States enough money to cover past
and future deficiencies. This done, gold
will readily be exchanged for United
States notes, as was done from January,
1879, to the election of Mr.. Cleveland.
The two defects in existing law relating
to redemption are mentioned by the pres
ident:
First.-That the notes presented for re-
demption must be reissued. 1t seems from
the newspapers that he has found the pow
er to hold notes redeemed until they can
be exchanged for coin, discovery that he
should have made sooner.
Second.-That the resumption fund is a
part of the general balance in the treasury
and may be applied to current expendi-
lures.
Congress neglected to cure the defects
pointed out by me as secretary of the
treasury in 1880, but I hope will correct
them now at the request of the president
1t was not then anticipated that def
cheney of revenue would occur or that if
it did occur the government would use a
fund specifically pledged for another pur-
pose to meet current liabilities.
Redemption of Notes.
Notes once redeemed should only be re-
issued for gold coin, and such reissue
should be mandatory when coin is depos-
tied in the treasury. With this provision
of law the scarcity of currency would
create such demand for it that gold would
be freely deposited in exchange for the
more portable and convenient notes of the
United States. The resumption fund
should be segregated from all other mon
eys of the United States and paid out only
in redemption of United States notes.
With such provisions in the law the re-
sumption fund could not be invaded to
meet deficiencies in the revenue. They
should be provided for by bonds or certifi-
Gates of indebtedness of small denomina-
tions at low rate of interest, which would
be readily taken by the people through ma
tional banks, subtreasuries and postoffices.
There seems to be a misapprehension of
the difficulties Of maintaining the redemp
tion of United States notes. The nominal
value of these is $346, 6S1, ,016. This is the
reduced volume from the maximum out
standing during the civil war of $3.50, 000,-
600. But this sum of $346, 600, 600 includes
all the,notes lost and destroyed by casual
ty since the first issue in 1862. The amount
thus lost has been estimated from $40, OOO,-
900 to SAC, 900, 900, reducing the notes that
could be presented to $500, O0O 600 or less.
The national banks In certain large cities
are required to keep on hand in lawful
money of the United States an amount
equal to at least 25 per cent of the aggre-
gate amount of their notes in circulation
and their deposits, and all other banking
associations are required at all times to
have on hand in lawful money Of the
United States an amount equal to at least
Is per cent of the aggregate amount of
their notes in circulation and of their de-
posits.
AS the term "lawful money" includes
gold coin there is a disposition by timid
banks to convert their United States notes
into coin, thus aiding in depicting the re-
demption reserve. This ought to be pre-
vented by provision of law that the bank
reserve of lawful money shall be United
States notes or treasury notes only Ma
tional banks are the creation and inStru-
ments of the government and ought not
to be allowed to discredit the money with
which they can redeem their. own notes,
nor should the government itself be per-
mitted in any way to weaken the credit
and confidence of the people in their paper
money by using it for current expenses in
excess of current revenues.
1t is practical fraud for the govern
ment to use these notes for such purposes,
and it never has been done except during
this administration. Every dollar thus
taken is an Impairment Of the redemption
fund. 1t is the misapplication Of fund
specially created by law for another pur-
pose. The effect is to destroy confidence in
the credit and safety of our paper curren-
0y. It has led to the demand for gold coin
for the United States notes. do not be-
lieve that has been the design of the exc
cutive branch Of the government, but that
has been It's effect, and 1t should be prevent
ed by the Immediate actor. of congress-.
The resumption fund IL the. safeguard Of
the money Of the people, and its use for
any other purpose Is O practical repudia-
tion Of the public faith.
The president complains that the notes
are presented and paid, reissued and paid
again. making a continuous circuit When