The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1897-07-30

We observe that our Republican
friends, who are still telling the people
that they must "be patient" and wait
a little while longer for the return Of
prosperity that was promised as soon
as the advance agent should be elected
president. are filed with a somewhat
lively concern about the future of the
federal finances. And we'll they may
be. Unless We are nightly mistaken
the condition of the treasury is going
to plague Mr.. Mckinley before the end
Of his administration as severely as it
did his predecessor. He has signed a
tariff bill that insures a deficit of from
$50, 1000, 900 to $4,000, 900. This is on the
assumption that imports Of foreign
products will continue on as liberal a
scale when duties have been made
practically prOhibitive as they did I'M
der the tariff rates in force before last
Friday. That conception cannot be
realized. Unless something now unex-
pected and unforeseen should happen
the treasury deficit is destined to be
paramount until the new tariff is sup
plemented by some measure for the
raising of revenue. If this is a true
representation, then the necessity for
further bond issues must arise. 1t is
only question of time. Already the
Republican organs are discussing, with
not unnatural anxiety, the condition
of the treasury and the possibility Of
other bond sales The MINNEAPOLIS
Tribune says that "the necessity for a
bond issue is not. apparent" And it
then proceeds to give reasons for its
faith which tell powerfully in exactly
the opposite direction. 1t says:
The treasury gold reserve on Tuesday was
$d45 f'2iO, and the cash balance in the
treasury was $239, 975, 253 Deducting the S1CO :
OOO,OOO gold reserve which the law requires to
De Kept nearly $40, 1000, COO of available cash
Is left to tide the country over until the rev
enues shall increase sufficiently to- make the
treasury self-supporting. 1t is hardly presu-
mable that the deficit in the next ten months
Will amount to as much as that.
The Tribune makes the foolish mis-
take. which any tyro should have
avoided, of suppOsing that the law re-
quires" the treasury to keep $1O0, O00, 900
as gold reserve. The law is silent on
the subject. Conservative policy on
the part Of the secretary of the treas
ury has fixed this limit, and experience
shows that it must be maintained. AS
1t is, the gold surplus is little more
than $l4O,O00,000. 1t would not take
long to exhaust that if withdrawals
should be resumed at any time as ac-
lively as in 1894, 1895 and the early
part Of 1896. In about a month we
would be skating around on thin ice
again; and if the alarm were once rails
ed. nothing could replenish the gold re-
serve but another bond sale.
The reason for this appears when we
consider the quality of the $40 900 900
of available cash" that constitutes the
remainder of the treasurys cash bal
cree. This is practically all green
backs and treasury notes. From the
very moment that the gold reserve be-
gan to dwindle, it would not be avail
able in any proper sense of the term.
The legal tenders are locked I'D in the
treasury solely to prevent them from
being used to draw out gold. Since
congress has neither the wisdom nor the
courage to retire these bills, the treas
ury has to make the best of it's embar-
RAISING situation. 1t has virtually re-
tired large quantity of them by using
the proceeds Of bond sales to purchase
them and to put them into the
vaults where they cannot be used as
the familiar endless chain" These
$l40,0O0,o00 are just as non-available in
case of run on the treasury gold as
If they were not there. With the deficit
that the new tariff bin assures. a Dor
ton of them must be paid out to meet
the ordinary expenditures of the gov
eminent. There are 5000, 900 of them
still outstanding outside of the treasury
We. can see, therefore, that this avail
able cash balance" is source of weak
ness, rather than of strength; and that
the federal treasury, with a continued