The sun. [volume] (New York [N.Y.]) 1833-1916, 1897-12-08

natural OF commercial value OF the one 40 com.
pared With the other. Nevertheless, Il must DO
recognized that this undertaking involves n
large financial responsibility. and requires
proper and adequate legislative provisions for
Its continued execution.
s1oo,ooo.ooo GOLD RESERVE INSUFFICIENT.
Tho responsibility OF the Government in this
respect mems that In addition to its liability
Tor In gold on demand OF $3i6,000,-
600 OF legal tender notes, 1t must also hold
itself In readiness to redeem in like manner
$ll4'ooo,ooo OF the Treasury notes OF 1890. and
TO maintain through its Treasury III, free inter
changcnoility with gold. my part or all Of
$4'o.ooo'ooo In silver now current with our
people. Tho aggregate OF these liabilities
amounts to $780, 900. 900. It is not intended
to convey tho iden that tho Government will
ever DO called upon to pay Mt any one time
or over any one period OF time, however pro-
traeted. tho total Of liability thus shown.
1t 10, however, indispensable that the Treas
ury be endowed with power and resources
ample TO meet all claimants who may como,
and with margin sufficient to give full as
suranco to all who do not come, that It's
ability for continuance Is unimpaired. Tho
statement that the traditional $780, 00.O 900
of gold reserve is insufficient for these purposes
need not DO supported by argument. 1t Is
'sihiSo a ENNOkuiGcu ihdutquhNy VI hub
amount has on more than one occasion brought
fear and arrangement to all ntorcsts-indus-
trial. commercial. and financial. Tho losses
suffered by the body polite through these do
rangoments having their origin In the state Of
the public Treasury cannot be named. oil.
though 1t Is not beyond the limit of reasonable
ceeds the total of the demand liabilities Of the
Treasury. as above set forth. II 1t BIO urged in
answer to these considerations that the state of
Inn IfenkMrv IA fairly aAflafnCtOTv nnV Tint
gold is flowing freely toward the Treasury and
not ava, from 1t. and that there Is a good state
OF confidence in our present financial con-
a perfectly correct one. It might DO further
conditions will endure for an indefinite period.
With public revenues sufficient for public ex-
ing; with trade relations normal. with ample
no war or weifdehned rumors OF war we might 70
on with q growing sense Of security. Unfortu.
nately tho continuance OF these good conditions
cannot be, assured to us. Commerce and indus.
try. sensitive to all unfayorablo events. and
unseen. need for their full recovery from past
that the Government finances are to DO firmly
placed on stronger and more enduring founda-
lions than now exist.
As long as the Government shall operate to
any important extent in supplying the currency
Of the country by the direct issues OF It's notes
parity. so large a volume of silver money. so
long will all our trade and industries remain in
" bthIo OF uepcnOenCy upon tue HnRnClnl WIS.,
dom, foresight. and courage of Congress. This
forced dependency on the one part begets cor
Considered from the standpoint OF national
defence the argument is reinforced. We appro.
pirate millions to create q navy. which. through
obsolete and worthless. We appropriate other
millions to provide coast defences against at
timely and wise as 1t may be. is inconsistent
with a Treasury condition so extended In a time
| DPODle bahnre the frat aound of fhe enemy's pima
In modern days q well.supplied war chest with
an in,presnable credit is as important as are
national Treasury, with Its accompanying bene-
forcementof the public credit. can. l believe, be
secured without my unsettling legislation, In q
WintIh" smai Cost to II The eG peop 5fA'A''' '' a''' anu
The recommendations 1 mako must be con-
strued not as being in themselves final meas
which, eoisistentiy pursued. viii lead to condi.
tions~ ultimately desirable. The condition Of tho
requires that one of two steps promptly DO
taken. lie one may, be a large reinforcement
Be ibH by aa IMPORTANT sI redu aesHsn in 'p The elSer may
able form of liabilities. The latter Is, In my
opinion. me more desirable.
RECOMMENDATIONS.
enacted. which will establish. separate and
apart Aom the ordinary operations OF the
penditaes. a department to be- designated and
knownLas the issue and ,rssdemption division;
should be set over from the general fund In the
posesand oil the silver collars now held for
silve1 bullion and dollars coined therefrom.
bought under the act Of 1890. should be passed
100000. 600 in the legal tender notes OF the
Unisd States, known as greenbaeks. DO col.
ley. tss sa "a f }ssss snd r SsssTiSsd and SiS aisRTSsi' to b ie
disursed therefrom only upon the receipt in
exchange therefor of an equivalent amount Of
god coin, such gold, when SO secured. to be held
inbaid division as part Of tho general redemp-
Becond-I recommend that provision be made
fr the issue of rcfunding loan bonds. payable
ftor ten years at the pleasure Of the Govern.
hent, such bonds to bear interest at the rate Of
interest, In gold coin; and that tho Secretary of
the Treasury be authorized to issue such bonds
table allowance for the difference in interest.
any part or all of the outstanding loans of the
United States which mature by their terms Of
payment In the years 1904, 1907, and 1925.
TO BE GAINED.
The advantage involved In the proposed action
lies in this: 1t removes an ambiguity from our
| unfavorably tho Government credit. The word
"coin now, used to express the obligation in
no doubt understood by the more discriminating
public creditor to mean gold coin. and the sol
emn act Of Congress %pledging tho maintenance
4 impossible to oonstrue the word coin" as
therein used. to mean anything other than gold
or its full equivalent. Yet AS this Is a conclusion
Of logic rather than a clear statement OF fact.
the simpler and more humble investors or
would-be investors in the public debt are con.
fused and doubtful. and the public credit Is the
weaker therefor.
Nor Is the course thus recommended without
wise precedent. The earlier issue: Of our, Gov;
eminent bonds were payable in dollars
With Rreonbacks a legal tender, with gold and
silver on a substantial commercial parity. but
both at q large premium over paper money. a
similar question arose. What did dollars
meant And in 1869. to remove all doubt upon
the subject" an act was passed solemnly pletg-
ing the faith OF tho United States to the pay
ment In coin or its equivalent OF all its interest
bearing obligations. except when otherwise ex-
pressly provided in tho law. The commercial
disparity between our "legal;tender dollars
greater than the present commercial disparity
judicious. To refund our outstandins bonds
now payable In coin into bonds payable. in gold
would strengthen and confirm the public credit
and put us In a position to NJ the mar
kets OF the world for our securities on the most
advantageous tcrms.
1t may be urged that the adoption of a specific