The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1898-06-06

IL
in the future impaired or any doubt should
arise as to it's purpose and ability to main
tain the interchangeability or its demand
obligations with gold. The operation OF the
endless chain has been suspended: there is
now no demand upon the part OF the hold
ers of our demand notes for the gold in the
treasury because there is a well-grounded
conviction that ii is the purpose OF the gov
eminent and that il has the ability to fur
ntsh gold for the notes whenever required
II we depart from the past policy or limit
ing the United States notes and increase the
issue to larger amount than ever before
reached by the addition OF $3.50 900 900 as now
proposed there is serious danger that dis
trust of the governments ability and pur-
pose to maintain the convertibility of the
repeated a run upon the gold reserve which
will disturb commerce, affect business
credit, create distruSt and decentralization to
the infinite injury of our soldiers in the
field, our sailors on the sea and all farmers
laborers and wage earners interested in the
soundness of the dollar.
1t is not proposed by the honorable Cppo-
sition TO safeguard in any wise the con-
yertibility of the proposed issue of United
States notes in coin. 1t is not proposed to
give the holders of them the option of con-
vertng them into time bonds, as was done
in the original acts authorizing such notes
With war upon us there is necessity for in
creased governmental and individual credit
certainly time OF war is the most unpro-
pitious for exploiting unsound financial the
cries or adopting any experiments which
might tend to embarrass our credit in the
remoteSt degree. We now want strength in
our navy, in our army and i'm our treasury
Public credit is too sensitive and too impor-
tant TO be lightly placed in peril; its i'm
pairment Is too far reaching in its conse-
quences to be contemplated with patience
under any circumstances.
There is no present justification for the
creation of additional promises TO pay and
the endowment of them with legal-tender
power. There is no exigency likely To arise
making necessary the creation of unsound
money. Our credit is such that we can
borrow the best money i'm the world to meet
all our present and future requirements
and at a rate of interest not exceeding ) per
cent. The people of the country will vol
UNFAIRLY furnish the government all the
money necessary at rate of interest as
low substantially as prevails in time of
undisturbed peace.
it is a significant fact which will not es-
cape intelligent observation that the advo-
Gates of additional paper currency are those
who believe in and advocate the free and
Independent coinage of silver. me poncy
of issuing additional greenbackS mas It's root
in the same purpose and that is, cheap
money" The issue of irredeemable legal
tender paper money in sufficient quantity
would tend to disturb its parity with gold.
drive gold to premium, and hence out of
circulation. This would tend to open the
way to free silver coinage It has seemed
listing currency has its BIRTH not solely III
the professed desire to avoid the interest on
bonds for the interest involved is of COM
paratively small amount but in the hope
and confident expectation that the cause OF
free silver will be advanced by breaking
eddy he the direct, natural. logical tendency
of the proposed measure.
COMING THE SEIGNIORAGE.
The proposition to create $42. 100000 of cur
rency by the coinage of the seignorage in
the treasury is fraught with peril. 1t is
another attempt to debase the currency.
Segniorage is the profit remaining after
the government has coined the silver pur-
chased by it; it is the difference between
the cost and coinage values. Until the sill
yer is coined there can be no profit.
1t is a fact within the knowledge of every
one that the government has never since
the act of 1878 bought an ounce of silver
which does not represent a loss to-day
very considerable loss. Under the act OF
1890 it purchased 1854 6S2. 53 ounces OF sill
yer at cost of Sl55, 93l COZ, for which amount
treasury notes have been issued.
Some OF them have been redeemed in gold
some in silver, but $40, 9S1, $50 of them are
outstanding. For their redemption the un-
coined bullion, amounting to los, 1893, l59
ounces, stands pledged The he mn market va IS
of this bullion Is now 1853, 1863, 1854, or $3S, :
z12,061O6 less than the face value of the
treasury notes issued and now outstanding
against it. Yet it was first seriously pro
posed by the opposition to issue A2,OOOO0J
silver certificates lin advance OF colnage)
against the estimated profit on the coinage
OF this deprecated mass of silver and en-
dow it with legal-tender power. me issue
of greenbacks outright was much more to
be commended than this indirect method of
accomplishing the same end Now II IS pro
posed 10 coin the silver bullion held in the
treasury at the rate of not less than $4,0CJ. =
600 per month and to issue certificates 10
the amount of the gain or selgniorage: AS
ent prices of silver bullion any fair, actual
gain or seigniorage, and any provision for
coming it tends to increase unsound money
and to defraud the holders of outstanding
treasury notes.
The outstanding treasury notes. as we
have observed. were issued for the purchase
of. the bullion, and it was provided that
thew should be 'redeemable on demand in
coil;" and that upon demand of the holder
\ of, any of the treasury notes herein pro-
.GIded for the secretary of the treasury
shall under such regulations as ne may pre-
scribe. redeem such notes in gold or silver
coin, at his discretion, ii being the eStab-
lished policy of the United States to MAIN
tain the two metals on a parity with each
other.
clearly expressed? The secretary of the
treasury is invested with discretionary
power it is true but that power is to be
policy of the United States, and that is to
keep the gold and silver coin into which the
note holder may convert his obligation at
an absolute, unvarying equlvalency with
each other. Any exercise of the discretion
of the secretary so as to endanger the party
of gold and silver with each other e would
of the government, positive violation OF
law.
Inc unCOlne0 silver IN the treasury Is
pledged to enable the secretary to redeem
the notes issued for its purchase, and to
enable him to keep the gold and silver coin
in which he may redeem them at a parity
with each other.
If there be any doubt as to the soundness
of this view we should remove it. For in
equity and good conscience the silver bull
lion which was purchased with the treasury
notes should be held to redeem them. or to
enable the government to maintain the
parity between the gold and silver coin with
thew redeemed.
1t is not proposed by the pending bill to
redeem outstanding treasury notes, but TO
coin additional currency out of the very
much deprecated in value, and make more
difficult the maintenance of the parity OF
gold and silver coin which the government
declared to the note holder to be its estab-
liShed policy
There is no difference in principle between
issuing greenbacks and coming the so-called
Seigniorage, except that in the former case
there is no subterfuge, no indirection, no
fragrant violation of faith already pledged.
Each method involves the imitation, the de-
basement of our currency. Each is vto-
latiYe of sound finance and should be
avoided.
CERTIFICATES AND BONDS.
The alternative method, for supplement-
ing our revenues for war purposes, is pro-
posed by this side of the chamber. 1t con-
templates issuing $1OOOOO,OOO of certificates
of indebtedness bearing 3 per cent interest
and maturing not later than one year from
date of issue; and $500, 900, 600 of bonds, or Sc
much thereof as may be necessary, bearing
per cent interest, redeemable after ten,
and payable twenty years from date of their
issue 1t is wisely proposed that the GER
tificates of Indebtedness shall be issued In