Evening star., 1898-09-12
DEMAND FOR PAPER
Gold is Being Poured Into the
Treasury.
MORE CONVENIENT MONEY is NEEDED
Proceeds of Bond Issue Making a
Big Surplus.
RETIREMENT OF GREENBACKS

RETIREMENT OF GREENBACKS
The predictions of ar overaowins treas
ury the result of the liberal provision
made by Congress for carrying on the
Spanish war are being rapidly verified by
the treasury returns. The cash halance,
which fell to a minimum of s1S5. .sIa .G04
June 18. about the time of the passage Of
the war revenue BILL had risen at the close
OF last week to SSC9, 1856 1O1. This gain Of
1924 .O0O.0C0 Is the result Of payments for
the 3 per cent bonds and the proceeds of
the war revenue bill. The war with Spain
cost up to the close of August about sl16,-
000.O00. OF this amount about $4,000, 600
was provided by the collections under the
new revenue law during July and August.
The returns thus far during September do
not indicate that the aftermath. or the ex-
renditures necessary for settling contracts
and paying the troops still in the service.
will much more than absorb the proceeds
of the new revenue law. The first ten days
or September have witnessed An Increase
in the cash reserve of S14 900 900 and an in
crease in the gold reserve of more than
Sl9WOOOO. Receipts from ordinary sources
expenditures were $14.522,oOO. This shows
a net defcit of only ST24,6OO, in spite of
drafts by the War Department during
September amounting to s5.970.000 and by
tho navy amounting to $.0O.0O The
amount thus far received for the 3 per cent
bonds is S14.3s4. .40J, leaving q little more
than S25 5.o0O, 900 to come in. A part of this
Will be delayed, pending the decision of
suspended cases of subscriptions for the
bonds and the maturity Of the last INSTALL
ments: but most subscribers have paid up
promptly in full upon receipt of the notices
of allotment of the bonds. The treasury Is
Hkely, therefore, to witness A further in
crease of the cash hslance before the close
of September to $500, 100000. and is not
likely to witness any material reduction of
this amount until there is Legislation. for
reducing taxation or providing for the use
of the money.
Reason for the Big Surplus.
The reason for this great excess of cash
in the treasury is found partly in the
shortnes5 of the war and partly in the
ample provisions made for it by the 8 per
cent loan and the new revenue law Secre-
tary Gage, although desirious of meeting
the war with d resolute financial policy. did
not at first propose to issue more than
SiehWO.WU of bones. He was urged by
leading tinancicrs to make the amount
S2O O,O0.oD because 1t might be more diff
cult to place two separate lots than one
large loan. 1t is now apparent that ii loan
of $l0OGOO0 would have been just about
adequate for the necessities of the treas
ury. and would have left balance of more
i L
new revenue law has proved unexpectedly
productive. and seems likely to yield nearly
$lio.e1,ED if it is left in force for an en-
tire year.
able to separate the proceeds of the new
revenue law from the old internal taxes,
but it is apparent that nearly half Of the
total internal revenue receipts are from the
new law. The Internal revenue receipts Of
July We're $26.1IO.S7. and those of August
We're $240l5,9I5. The receipts for the first
ten days of September We're S7,37l .314. This
would Indicate receipts of only s22 O0O 900
for the month if the first ten days REPRE-
sented one-third of the business days of
September but the happening of two holi-
days diminishes the productiveness of the
first ten days. and indicates slightly in
creased receipts during the remainder of
the month.
Even if the total internal revenue receipts
for September are only S2:3, 800 OOo 1T is rea-
sonable estimate that nearly sl1 900 900 will
be derived from the law. In view of
the small drafts made by the War and
Navy Departments thus far during the
month, 1T seems likely that the proceeds
of the new revenue law will cover the ex-
pense of garrisons and the government of
Cuba. Porto Rico and the Philippines and
that no serious drafts will be made here
after upon the accumulated cash balance
Growth of the Gold Reserve
The rapid growth of the gold reserve is
one of the most remarkable phases of the
titdSuiS SITUATION ana lnGlCdtcS the
strength which has come to the treasury
by the cessation of paper and silver in
fation under the Sherman law There
have been since 1898 only two means of in
creasinS the circulation-the Importation Of
gold and issue of bank notes upon United
States bonds. The latter resource has
been trif.ng. because of the high price
of the bonds in the market Many of the
banks ordered large quantities of new
notes to be printed in anticipation of the
recent per cent loan, but the unexpected
success Of the small bidder compelled
the banks to seek such bonds as they have
been able to obtain in the open market.
They have been Toderately successful in
such purchases, and up to the close of last
week had deposited with the treasury 3d.
GG6J'D in the new bonds to secure circu-
lation and s13.957. $50 to secure public de-
posits. The increase in the bank note cir
culation since 1893 however has not af-
fected materially the money supply of the
country.
The total bank note circulat ation on Jan
uary l, 1894, was sos S44. The amount
ran as high $3.50 663 11S at the beginning
of 1897, but fell April l. 1893, to SPA
39S.0l9. The Increase the result of the
recent bond issue has produced very slight
results. 1he total circulation AT the close
of last week was $229. .O3O 29J, and the
bonds on deposit to secure circulation We're
500, S26, 710.
The real increase in the circulation of
the country, therefore. has depended upon
lHe Oh SOlu anu InSSe nave been
very heavy. The treasury has not in it's
custody much gold by about s6O, 900
was the case when the gold reserve was
at its highest in 1888 and gold certificates
were outstanding to the amount of more
than 800 ,GOG0.OOO. The difference in the
gold in the treasury, however, is fully COW
cred by the big fund of gold in the New
York clearing house belonging to the state
and national banks of the city of New
York.
Proposed Retirement of Greenbacks
The country never so well supplied
with gold as at the present time, and some
of the treasury officials believe that the
moment is ripe for forcing gold coin into
actual circulation. Whether this is ad-
visable or not it is probable that Sacre-
tary Gage will recommend to Congress the
retirement of a considerable block of the
greenbaCks by the payment of gold coin
for their redemption. This course might
be criticised tending to produce corI-
traction of the currency if it were not
accompanied by provision for a larger
issue q hank notes general