The Corvallis gazette. [volume] (Corvallis, Or.) 1862-1899, 1897-12-10
THE CURRENCY QUESTION.

THE CURRENCY QUESTION.
Necessity of Putting Our Finance.
Upon a Sound Basis.
Tariff legislation having been settled by
the extra session of congress, the question
next pressing for consideration is that oil
finances upon sound basis, difficult as ii
may seem, will appear when we recall
the financial operation of the government
since 1856. On the goth day of June OF
that year, we had outstanding demand
liabilities in the sum of $728, ,S6S, ,447 Al. On
the 1st day of July, 1879, these liabilities
had been reduced 10 $443. .SS9, 495 88. OF our
interest-bearing obligations, the figures
are even more striking. On July l, 1856
the principal of the est-bearing debt
of the government was S2,332, 3Sl, 2OS. On
the l5t day Of July, 1885, this sum had
been reduced to S5S5 0S7 100, or an aggre-
gate reduction of S1,7l7, ,294, 10S. The inter-
est-bearIng debt of the United States on
the 1st day of Decemb T, 1887, was $Si7,-
36o, ,620. The government money now out
standing December y consists of S346.
6S1 016 of United States notes; $107, 1893, $50
OF treasury notes issued by authority of
the act of 1890; 1884, ,963, 504 of silver cersff-
Gates and $51, ,2s0,761 of standard silver
dollars.
With the great resources of the govern
moQI ana with the llInG-nOnOTeQ GxdIplG
of the past before us, we should not hesi-
tate to enter upon a currency revision
which will make our demand obligations
less onerous to the government and re-
leve our financial laws II ON ambiguity
and doubt.
Che brief review of what was accom-
plshed from the close of the war until
1883 makes unreasonable and groundless
any distrust either of our financial abil-
ity or soundness; while the situation from
1858 TO 1897 must admonish congress of the
immediate necessity for so legislating as
to make the return of the conditions then
prevailing impossible.
There are many plans proposed as a
remedy for the evil Before we can find
the true remedy we must appreciate the
real evil. 1t is not that our currency OF
every kind is not good, for every dollar
of it is good; good because the govern
ments pledge is out to keep it so, and
that pledge will not be broken. How
ever. the guaranty of our purpose to keep
the pledge will be best shown by advanc-
ing toward is fulfllment.
Evil of the Present System.
The evil of the present system is found
in the great cost to the government of
maintaining the parity of our different
forms of money; that is, keeping all of
thsm at par with gold. We surely cannot
be longer needless of the burden this i'm
poses upon the people, given under fairly
prosperous conditions, while the past four
years have demonstrated that it is not
only an expensive charge upon the gov
ernment, but a dangerous menace to the
national credit.
1t 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
-spl culation made easy by the multiplied
redemptions of our demand obligations, or
increase the gold reserve for their re-
demption. We have $500, 900 of currency
which the government, by solemn enact
ment, 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 gov
ernment is obliged to keep equal with
gold all it's 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.
1t can get 1t in no other way when it most
needs it. The government without any
fixed gold revenue is pledged to maintain
gold REDEEM ption, which it has steadily and
faithfully done, and which, under the au-
thority now given, it will continue to do.
The law which requires the government,
after having redeemed its notes, to pay
them out again as current funds demands
a constant replenishment of the gold re-
serve. This is especially so in times of
business panic and whsn 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, as during
the administration of my predecessor,
when s262, ,315 400 of AZ per cent bonds
were issued and sold and the proceeds
used to pay the expenses of the govern
ment 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 reve
nues, a considerable portion was required
to maintain the gold reserve.
RepIenishing the Gold Reserve.
With our revenues equal to our expenses,
there would be no deficit requiring the is
suance of bonds. But if the gold reserve
falls below s1O0, ,O00, 900, how will it be re-
plenished except by selling more bonds? !?
Is there any other way practicable under
existing law? The serious question 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 legislation
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
less rate of interest than Is now author
ized by law. I earnestly recommend, as
soon as the receipts of the government
aIe 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 only paid out
in exchange for gold. This is an obvious
duty. II the holder of the United States note
prefers gold from the government, he should
not receive back from the government
. United States note without paying gold
in exchange for it. The reason for this is
made all the more apparent when the gov
egnment issues an interest-bearing debt