The sun. [volume] (New York [N.Y.]) 1833-1916, 1897-11-20
The Cost of the Gold Reserve.

At the dinner given by the members Of
the Commercial Clubiof this city to its Gov
ernors on Thursday evening, Mr.. C. H.
FANcHER, the President of the Irving
National Bank, speaking on the topic,
shall the Treasury Notes Be Retired r.
began his remarks as follows:
"our Government notes should be retired. nst, be.
cause OF their enormous and useless cost Of mainte-
nance. We are informed that the Actuary of the
United States Treasury says that since 1879 it has
cost the United States Government $3.50, sS4, 222 to
maintain our paper upon q gold basis. or an average
OF SCI 900, 900 per annum. Who is there among US
that will dare even to estimate the fabulous losses to
the people and commerce during the last two dec.
AIDES occasioned by their existence?
ITO my mind they resemble on the body polite o
cancer on the human body that has been lily treated.
awfuily sore. but with tendrils SO deep that the
financial doctors are at asad loss how TO treat II, and
are now securing the country for remedies"
MIR. FANCHER. undoubtedly, had in mind
when he said this, not information given
by the Actuary of the United States Treas
ury. there being no such officer, but a state
ment prepared by the chief of the loans
and currency division of the Treasury De-
partment at the request of the Comptroller
Of the Currency, Mr.. JAMES II. ECKELs, and
~ piNoOhICo III his EcpOEU
of Dec. z, 1896, page 1OS. The statement
Is headed, Cost of the Gold Reserve, In
Guiding Liability for Principal of Bonds
Sold and Interest Thereon to Their Ma
turity," and is this:
Principal ~ Bonds Sold for Redemption Purposes.
1877 and sos, 800. 600
100, 600. 900
so. 815, 400
100, 1000, 900
Total..."...".."........... 1857. 49, 400
Interest at 4 per cent. on tho average
amount of free gold In Treasury Jan.
J.. 1879. to Jan. /, 1895 ........ SOS, 44O, 900
Interest from Jan. /. 1898. to July I,
1907, on sos, 900. 900 bonds Of 1907
at 4 per Observation-Disclosures. A7.7bo.o 900
Interest from Jan. l. 1895, to Feb. ],
1904. on ol00. 000, 900 bonds at o
per OBSERVATION-DISCLOSURES. Ao.+lc.seo
Interest from Feb. !. 1896. to Feb. l.
1928. on $50, 3l5, 400 bonds at 4 per
ACKNOWLEDGEMENTS. 7t.77s.4so
Interest from Feb. l. 1898. to Feb. l..
1928. on 800. 600. QUO bonds at
per cent 49, 600. 900
Total cost. including liability, ex.
cept U. s. notes outstanding. .... 1886, 900, $40
Add u. 8. notes outstanding .......,. 84B, 8Sl, Ol8
Total cost and liability ............ o.. OsI, ssi ,boa
After presenting these figures Mr.. EcKELs
goes on to give credit for what has been
saved by not funding the greenbacks on
Jan l, 1879, into 3O.year 4 per cent. bonds,
due.July l, 1907. He allows:
Principal of bonds 0sis, esI 900
Interest from Jan. /, 1879, to July /.
90o, 2lo, $40
iotai e14l, Sy7, $40
Deducting this $741, s97, $40 from the
$l,Os1 1881 500 which Mr.. ECKELs figures
to be the cost of keeping the greenbacks
outstanding, gives a difference of $780,
3 1922, which he asserts Is the amount
which would have been saved to the nation
II the whole issue of them had been funded
on Jan. l, 1879, into the 3O-year 4 per
cent. bonds of 1907. He is candid enough,
however, to concede, although he leaves
his statement unchanged, that perhaps the
item of 500. i4O, 900 charged as interest on
the free gold In the Treasury from Jan. /,
1879, to Jan. l, 1895, should be deducted,
as 1t obviously should be, but he still claims
a debit balance against the greenbacks of
&2l4,O44,2 22.
Mr.. FANCHER was wrong, therefore, first,
In putting the cost of maintenance of the
g~reenbacks, as computed by Mr.. EcKEI4s, at
$3.50, 9S4 ,222, instead of $214, O44, 900,
and, second, in distributing this cost over
the period of Is years from Jan. i, 1879,
to date, whereas Mr.. EoKEI.s distributes it
over the 2sls years from Jan. l, 1870, to
July l, 1907.
This Is, however, a trihing matter com
pared to two gigantic errors which vitiate
the whole of Mr.. EcKELs's computation.
Mr.. FANcHER will look at the figures We