The independent. [volume] (Lincoln, Neb.) 1902-1907, 1903-10-01
THAT GOLD RESERVE
Some Peculiar s34 ,o0o, 00O
Notes Outstanding, Yet Not in
Circulation

Editor Independent: Since writing
my last article, in which | called at
tention to the want of agreement IN
the statement made by'New York city
national banks to the comptroller and
the reports of the New York clearing
house as published in the daily press,
nv attention has been called to the
rumor current in Washington that
Secretary Shaw has been making de-
post loans to Inc national banks ont
of the gold reserve fund. 1t seems to
me Improbable that MIR. Shaw has been
guilty of so audacious violation or
law when, if he wants to make loans
to these banks, he can do it out OF the
general fund and conceal 1t in the
same way he would have to conceal II
is loaned out of the reserve. There
is ground, however, for believing that
there is something wrong in the man
agement of funds that ought to be kept
in the United States treasury.
On June / last, the gold reserve was
made up of S50,000,000 in coin and
S100, 100000 in bullion. At the same
time the gold in the general fund
was $96. ,4S7 of which $59,67S
was bullion. There is, possibly, not
much change in this particular on
August /.
Mr.. Shaw could not very well make
the bullion available to assist the
banks in stringency.
| have just received No. /, OF ser
les 1868 and 1904, Of the Monthly SUM
mary of Commerce and Finance. The
public debt statement for July is ON
page ia, and the circulation state
ment and the statement of outstand-
Ing paper currency is on page l75. It
Is quite well understood that banks,
when they desire, can, by methods OF
entries in bookkeeping, conceal what
they do not want known and make
their conditions appear very different
from what they really are. It ought
to be understood, if it is not, that the
treasury department can do the same
thing. The July debt statement makes
Il appear that there is $34,43S, 53S more
cash on hand than there is. The two
sides of this account are headed
classification and Demand Liabil-
tiles" Under the. first head are the
items different kinds of money-tha1
make up the funds held by the de-
partment.
Those who are familiar with the
subject will know that every "golt
certificate" issued has dollar for dol
lar of gold, and every silver certih
cate has dollar for dollar OF silver II
the trust funds of the treasury-ol
ought to have. 1t ought to be cleai
that when dollars in gold are hele
against gold certificates. and dollars
in silver are held against silver GER
tificates. that both ought not to DC
counted as cash in the treasury, ever
If on the other side of the account, liza
bilities are increased by the same
amount to make the accounts balance
In this statement for July, there Is
on one side of the account $4l2,o8t, 90
of trust funds in gold coin, and On the
otf.ee side the same amount OF gol6
certificates. The circulation statement
shows that there was only $3S6,3e9 ,a9s
of gold certificates outstanding. Ihf
gold certificates in circulation are
S25.71S470 less than reported in the
debt statement. These certificates ap.
pear in. the general fund and the golt
they represent in the trust funds, ane
beth are counted as cash on hand
This doubles to this extent the CAST
on hands. There is a similar situa
ton in regard to silver certificates
The coin held against the certificates
is a trust fund for their payment, bu
the bookkeeping entries show $34,
,5SS of certificates in the genera
furl arc tie same amount in coil
held for their payment in the trus
funds. AID both are counted as casl
on hands OF course, the account il
made to balance by reporting unde
the head of Demand Liabifities" S34,
438,53S more gold and silver certifi
Gates than are in circulation, but tn
account shows that amount more caSl
on hands than there really is.
These certificates find their way bacl
into the treasury in one of two ways
by presentation and payment, in whicl
event the gold and silver go out a
they go in; by the payment of custom
du.es. taxes and dues, in which even
no geld and silver go out, but the gol
deposited for their issue in the frs
instance ceases at once to be a par
OF The trust fund and becomes par
Tn Tho fret in