The Topeka state journal., 1897-12-06


| maintaining the parity of different
forms of money, that is, keeping all of
them at par with gold. We surely can
not longer be needless of the burden this
| imposes upon the people.even under fairly
prosperous conditions, while the past four
years have demonstrated that it is not
only an expensive charge upon the govern
nent, but dangerous menace to the na-
tional credit
It is manifest that we must devise some
plan to protect the government against
bond issues for repeated redemptions. We
must either curtail the opportunity for
speculation, made easy by the multiplied
redemptions of our demand obligations.
or increase the gold reserve for their re-
demption. We have S9O0,OOOe00 of cur
rency which the government by solemn
enactment has undertaken to keep at par
with gold. Nobody is obliged to redeem
in gold but the government. The banks
are not required to redeem in gold, the
government is obliged to Keep equal with
gold all its outstanding currency and coin
obligations, while its receipts are not re-
quired to be paid in gold. They are paid
in every kind Of money but gold, and the
only means by which the government can
with certainty get gold is by borrowing.
It can get it no other way when it most
needs it.
The government without any fixed gold
revenue is pledged to maintain gold re
demption. which it has steadily and faith
fully done and which. under the authority
now given, it will continue to do.
The law which requires the government
after having redeemed it's notes to pay
them out again as current funds demands
a constant replenishment of the gold
serve. This is especially SO in times of
business panic and when the revenues are
insufficient to meet the expenses of the
government. At such times the govern
ment has no other way to supply its def
icit and maintain redemption but through
the increase of its bonded debt. Under
this necessity $3.50, ,315. 400 of AZ per cent
bonds were issued and sold under the ad-
ninistra ton of my predecessor and the
proceeds used to pay the expenses of the
government in excess of the revenues and
sustain the gold reserve. While it is true
that the greater part of the proceeds of
these bonds were used to supply deficient
revenues, a considerable portion was re-
auired to maintain the gold reserve.
With our revenue equal to our expenses,
there would be no deficit, requiring the
issuance Of bonds. But if the gold re-
serve falls below S1O0,0O0O00, how will it
be replenished except by selling more
bonds? Is there any other way practica-
BILE under existing law? The serious ques-
tion then is shall we continue the policy
that has been pursued in the past, that
is, when the gold reserve reaches the point
of danger issue more bonds and supply
the needed gold, or shall we provide other
means to prevent these recurring drains
upon the gold reserve? If no further leg
islation is had, and the policy of selling
bonds is to be continued. then congress
should give the secretary of the treasury
authority to sell bonds at long or short
periods, bearing a less rate of interest
than is now authorized by law. 1 ear
nestly recommend as soon as the receipts
of the government are quite sufficient to
pay all the expenses of the government,
that when any of the United States notes
are presented for redemption in gold and
are redeemed in gold. such notes shall be
kept and set apart, and only paid out in
exchange for gold. This is an obvious
duty. If the holder of the United States
note prefers the gold and gets it from
the government, he should not receive
back from the government a United States
note without paying gOlG in exchange for
it The reason for this is made all the
more apparent when the government IS
sues an interest bearing debt to provide
gold for the redemption of United States
notes-a non-fnterest bearing debt Surely
it should not pay them out again except
on demand and for gold. If they are put
out in any other way, they may return
again. to be followed by another Jond is
sue to redeem them-another interest
bearing debt to redeem a non-interest
bearing debt
In my view 1t is of the utmost import
ance that the government should be re-
lieved from the business of providing all
the gold required for exchanges and ex-
port The responsibility is alone borne
by the government without any of the
usual and necessary banking powers to
help itself The banks do not feel the
strain of the gold redemption. The whole
strain rests upon the government. and the
size of the gold reserve in the treasury
has come to be, with or without reason.
the signal of danger or of security This
ought to be stopped.
If we are to have an era of prosperity
in the country, with sufficient receipts for
the expenses of the government. we may
feel no immediate embarrassment from
our present currency; but The Danger still
exists and will be ever present, lnenacing
US as long as the existing system con
tinues. And besides, it is in times Of
adequate revenues and business tranquil
lity that the government should prepare
for the worst We cannot avoid without
serious consequences the wise considera-
ton and prompt solution of this ques-
ton.
The secretary of the treasury has out
lined a plan in great detail for the pur-
pose of removing the threatened recur-
renee Of a depleted gold reserve and save
Us from future embarrassment on that
account To this plan 1 invite your care
flI consideration.
I concur with the secretary of the treas
urv in his recommendation that national
banks be allowed to issue notes to the
face value of the bonds which they have
deposited for circulation, and that the
tax on circulating notes secured by the
deposit of such bonds be reduced to one
half of one per cert per annum- also
ioin him in recommending that authority