Rock Island Argus. (Rock Island, Ill.) 1893-1920, 1897-05-13
RESERVE OF GOLD.
How It Is Affected by a Deficiency
Of the Revenue,
ACCORDING TooHARMAHD1NeLEY

He Explains the Protection Plan of Pro-
tscting, It Against the Raid ofthe Green
backs and Also How the Deficit Caused
the Borrowing OF So Much Money Dur
Ing Cleveland's Term, as He Views the
Matter-Beps 1T on Cuba Preparing.
Washington, May i3.-Chairman Ding
ley. Of the ways and means committee,
In regard to how a sufficient revenue
would protect the treasury reserve,
said: Where there is revenue sufficient
to pay the current expenses of the gov
eminent and leave a small surplus and
a run takes place upon the treasury
reserve by the presentation of green
backs for redemption, those notes do
not have to be paid out to meet de-
fciencies, and are held in the treasury
either for exchange for geld or for the
payment of bonds. The difficulty Of the
past four years has been that we have
had a constant deficiency. amounting
to over 5000. 000. 900. or $50, coo, COO per an
mum. and to meet this deficiency the
greenbacks presented and redeemed have
Immediately been paid out again. this
placing them in a position requiring a
second and even third redemption.
Borrowed to Meet a Deficit.
THUS. as matter of fact, while we
have borrowed about s293, 600. 900 of gold
by issuing bonds during the past four
years. ostensibly to maintain the gold
reserve, yet as matter of fact over
s200,00O,OO0 Of that has in the last an
alysis been borrowed to meet the de-
dciency of revenue and only $50, COO. 900
10 maintain the gold reserve. The result
has been that We have had the endless
chain Of which Secretary Carlisle has
spoken, and this endless chain is posi-
bles long as there is insufficient revenue
to meet current expenditures. While n
deficiency of revenue may not have of
itself created the distrust which caused
run on the treasury, yet it greatly
strengthened the distrust and made it
chronic.
Neither Theory Nor Speculation.
IF we had had sufficient revenue to
meet the current expenditures of the
government in the fiscal year beginning
July l. 1893, unques:ionably a sale OF
$50, 600, 900 of bonds would have been
sufficient to maintain the reserve, as in
that case the redeemed greenbacks
would have been kept in the treasury,
and before s50,000,000 had been redeemed
there would have been such a scarcity
OF legal tender notes that the holders
of gold would have been glad to present
1t to the treasury and obtain the more
convenient greenbacks for use. This is
neither theory nor a speculation, be-
cause from 1879, when weresumed specie
payments, up to 1893, during which
period We had an abundant revenue,
there were comparatively few United
States notes presented for redemption in
gold, every one recognizing the fact that
the government had it in its power to
hold these notes in its reserve to any
extent. because none of them was re-
qutred to meet current expenditures.
No Danger with Small Surplus.
Enthusiastically, If we can now Sc
cure abundant revenue to meet all ex-
penditureS and leave q small surplus
to gradually reduce the principal Of the
war debt, there. will be little danger
of any serious prolonged presentation Of
greenbacks for redemption. Not only
because the fact that we have a solvent
government will aid in maintaining con-
f1dence and the credit of the govern
ment, but also because every one will
recognize the fact that the government
will be able to hold greenbacks re-
deemed so long as there is a tendency
for run on the treasury. 1t is for this
reason that the revenue legislation now
pending, designed to secure sufficient
revenue to carry on the government. is
of itself fundamental step N main
tanning the credit Of the government
and ayerting any danger Of a deprecia-
ton Of the currency.
Reply to Another Objection.
I'm reply to the objection that the
holding Of greenbacks in case Of a run
on the treasury. except for the purpose
OF exchange in gold, would tend to
contract the currency, 1t is only neces-
sary to say that every dollar Of green
backs redeemed and temporarily held
lets out a dollar In gold. and there
fore that the amount of money out
standing is not disturbed. If, for ex-
ample. We have $3.50. 600. 900 of gold in our
reserve and $50, 600. 900 Of greenbacks are
presented for redemption, there goes out
at the same time $50, 1000, 900 of gold. In
ordinary times, when confidence reigns
supreme, business is good and the rev.
enue SUFFICIENT to meet all expenditures
and leave considerable surplus. there
Will be no run upon the treasury and
necessity for holding greenbacks to pro-
tect our reserve. Then the surplus will
be used to reduce the principal of the
interest-bearing debt, just as 1t was
from 1879 to 1893"
CUBA GOES OVER FOR ONE nav
And Proceedings In the Senate Are Conse-
quently Very Tame.
Waehinofon
yesterday the sugar investigation of 1894