Middletown transcript., 1897-12-11

p0Ttunlty for speculation maue easy
) the multiplied redempti ms of our d
mand obligations, or inceease the go
reserve for their redemption. We hay
5000, 600, 900 of currency which II
government by solemn enactment h'
undertaken to keep at par with goE
| Nobody is obliged TO redeem in gol
but the government. The banks al
| not required to redeem in gold. Th
government is obliged to keep equi
with gold all its outstanding currenc
and coin obligations. while its receipt
are not required to be paid in gold
They are paid in every kind of none
but gold, and the only means by whicl
the government can with certainty, ge
| gold is by borrowing. 1t can get it n
other way when it most needs it. Th
government without any fixed gol
revenue is pledged to maintain gold re
demption, which it has steadily ant
faithfully done and which under tn
authority now given it will continue Il
do.
The law which requires the govern
msnt after having redeemed its United
States notes to pay them out again al
currency funds demands constant re
plenishment Of the gold reserve. Thi'
is especially so in times of business
panic and when the revenues are in
sufficient TO meet the expenses of the
government. At such times the gov
ernment has no other way to support
its deficit and maintain redemption bul
through increase of its bonded debt, as
during the administration of my pre-.
decessor when 1862, 315, 400 OF four and
half per cent. bonds were issued and
sold and he 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 re-
venues, considerable portion was re-
quired 10 maintain the gold reserve.
With our revenues equal to our ,ex-
penses there would be no deficit re-
quirirg the issuance of bonds. But if
the gold reserve falls below $100, ,000,-
900 how will it be reIlenished except
by selling more brndsP Is there any
other way practicable under existing
laws? 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 to prevent
these recurring drains upon the gold
reserve? Ii no further legislation is
had and the policy of selling bonds is to
be continued, then Congress should
give the Secretary of the Treasury au.
thority to sell bonds ut long or short
periods, bearing less rate Of interest
than is now authorized by law.
I earnestly recommend that 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 re-
deemed in gold, such notes shall be
kept and set apart and only paid out
in exchange for gold. This is an OBJ
vious duty. If the holder of the United
States note prefers the gold and gets it
from the government he should not re-
ceive 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 inter
debt to provide gold for the
redemption of United States no es u
y n-interest bearing debt. Surely It
should no pay them out again except
on demand and for gold. If they are
put out in any other Way they may re-
turn again to be followed by another
bond issue to redeem them another
deb to redeem u non-
interest bearing debt.
In my view it ia of the utmost inn
portance that the government should
be relieved from the burden If pr0vid-
ing all the gold required for exchanges
ands export. This responsible y is
alone borne by the government with
out any OF the usual and necessary
banking powers tn help itself. The
banks do not feel the drain of gold re-
demption. The whole strain rests upon
the government and the size Of the gold
reserve 10 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 prosper
ity in the country, with sufficient re-
cepts for the exports of the government
we may feel no Immediate embarrass-
ment from our present currency; but
the danger still exists, and will be ever
present, menacing rs so long as the ex,
ing system continues. Aud besides it
is in times adequate revenues and bu.-
mess tranquility that the government
should prepare for the worst We can
not avoid without serious consequences
the wise consideration and prompt So
luton Of this question.
The Secretary Of the Treasury has
outlined plan In great detail for the
purpose OF removing the threatened re-
currence OF depleted gold reserve, and
save us from future embarrassment on
tnat account. To this plan { invite
your careful consideration,
j concur with the Secretary Of the
treasury Id bis Recommendation that
national banks be allowed to issue
notes to the face value Of the bonds
which they have deposited for cirGula-