The record-union., 1897-12-07
PRESIDENT MCK|NLEY'S
MESSAGE TO CONGRESS-.

different forms of money; that is, keep
ing all of them at par with gold. We
surely cannot be longer needless of the
burden this imposes upon the people,
even under fairly prosperous conditions,
while the past four years have dem
onstrated that it is not only an ex-
pensive charge upon the Government,
but dangerous menace to the national
credit.
BOND ISSUES.
1t is manifest that we must devise
some plan to protect the Government
against bond issues for repeated re-
demptions. We must either curtail the
opportunity for speculation, made easy
by the multiplied redemptions Of our de-
mand obligations, or increase the gold
reserve for their redemption. We have
$500, 100000 of currency which the Gov
eminent, 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 re-
quired to redeem in gold. The Govern
nent is obliged to keep equal with gold
all its outstanding currency and coin
obligations, while its receipts are not
required to be paid in gold. They are
raid in every kind of money but gold,
and the only means by which the Gov
ernment can with certainty get gold is
by borrowing. 1t can get it in no other
way when it most needs it. The Gov
ernment, without any fixed gold rev.
enue, is pledged to maintain gold re-
demption, which it has steadily and
faithfully DONE and which. under the
authority now given it, it VIII continue
10 do.
The law which requires the Govern
ment after having redeemed its notes,
to pay them out again as current funds,
demands a constant replenishment of
the gold reserve. This is especially so
in times of business panic, and when the
revenues are insufficient to meet the ex-
penses of the Government At such
times the Government has no other way
to supply it's deficit and maintain re-
demption but through the increase of its
bonded debt, as was done during the
administration of my predecessor, when
S262, ,315 400 of AZ per cent. bonds We're
issued and sold, and the proceeds used
TO pay the expenses of the Government
in excess of revenues and sustain the
gold reserve.
of the proceeds of these bonds We're used
tc supply deficient revenues, a consider
abl portion was required to maintain the
gold reserve.
With our revenues equal to our ex-
penses, there would be no deficit requir-
ing the issuance of bonds. But if the
gold reserve falls below 500 100000
how will it be replenshed except by sell
ing more bonds? Is there any other
way practicable under existing law?
The serious question then is, shall We
continue the policy that has been pur-
sued in the past; that is, when the gold
reserve reaches the point of danger, is
sue 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 1egisla-
ton is had and the policy of selling
bonds is to be continued, then Congress
should give the Secretary of the Treas
ury authority to sell bonds at long or
short periods, bearing a less rate of in
terest than is now authorized by law
REDEMPTION AND PAYING OUT
OF NOTES.
1 earnestly 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 re-
demption in gold and are redeemed in
gold, such notes shall be kept and set
apart, and only paid out in exchange
for sold This is an obvious duty If
the holder Of the United States note pre-
fers the gold, and gets it from the Gov
eminent, he should not receive back
from the Government a United States
note without paying gold in exchange
for it,
The reason for this is made all the
more apparent when the Government
issues an interest bearing debt to pro-
vide gold for the redemption of United
/ States notes a non-interest bearing
debt. Surely il should not pay them
cut again except ON demand, and for
gold. If they are put out in any other
way. they may return again to be fol-
lowed by another bond issue to redeem
them-another interest bearing debt to
redeem a non-interest bearing debt.
GOLD FOR EXCHANGE AND EX-
PORT.
In my view, II is of the utmost import
ance that the Government should be re-
lieved from the business of providing for
all the gold required for exchanges and
export. This 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 Gov
eminent and the size Of The gold re-
serve in the treasury. and comes to be.
with Or without reason. the signal Of
danger or of security. This ought to be
stopped
NOW THE TIME TO ACT.
II we ale to have an era Of n,osnerifv
/ in the country. with sufficient recejpis
for the expenses Of the Government.
We may feel no immediate enbarrase-
ment from our present currency. bat
the danger still exists. and win be ever
present menaeing us as long as the
existing system continues. And be-
sides. II is in time of adequate revenues
and business tranquility that the Gov
ernment should prepare for the worst.
We cannot avoid. without serious con-
+ sequences. the wise consideration and
prompt solution Of this question
SUGGESTED PLANS.
The Secretary Of The Treasury has
outlined plan in great detail for the
purchase or removing threatened re-
currence of a depicted gold reserve. and
save Us from future embarrassment on
that account To this plan / invite
your careful consideration
concur with the Secretary Of The
Treasury IN his recongmendation that
national banks oe allowed to issue notes
to the face value Of .he bonds which