Tazewell Republican. [volume] (Tazewell, Va.) 1892-1919, 1904-05-12
The Truth About the Gold Reserve
Philadelphia Press.

Philadelphia Press.
Ex-President Cleveland has written in
the Saturday Evening Post" of this city
review of the efforts Of Ills Admnistra-
ton to protect the Treasury gold reserve
which omits the most important factor in
volved--the Treasury deficit. Whether
this is done Willingly or unwlttingly is OF
no consequence. 1t remains true that
Mr.. Cleveland in writing history has omit
ted part of the history.
AS President Hadley, Of Yale College,
pointed out decade ago in his work on
political economy, presidents and legs-
lation brought it about that the demand
notes of the ACKNOWLEDGEMENTS and
the rest-depended for their current SOL
yency not on the final credit Of the Gov
eminent, but on its Treasury balance and
the gold reserve which made part of this
balance. 1t was, as Mr. Hadley shrewdiy
put it, as if merchants credit in borrow
ing on bis paper were to turn not on his
assets, but on the size of his current bank
balance.
President Cleveland was 80 little aware
of this fact and this distinction that be
admits, with a simplicity that does his
heart more credit than bis head, that be
was not even aware, until Mr.. Pierpont
Morgan told him, that he had right to
sell bonds to protect the gold reserve. If
President Cleveland had known this, as
he and bis advisers should have known it,
and announced early that bonds would be
sold as fast and as long as needed, 1t is
probable that the raid on the gold reserve
would have been checked. 1t certainly
would never have been necessary to sell
1852 900 900 of bonds.
Ignorance is not an indictable ohense;
but in the Chief Elective of great ma.
ton ignorance is both perilous and costly
Ignorant, as he himself confesses, that he
had the legal power to sell bonds to gain
gold for the reserve-until Mr. Morgan
told hlm-President Cleveland left the
demand notes of the Government depend
ing for solvency on the Treasury reserve
the current bank balance of the Govern
ment, to resume Mr.. Hadley's apt charac-
terization.
Had this balance been kept up by ade-
ouate revenue the 'endless chain" would
never have been created But President
Cleveland and a Democratic Congress let
this balance be exhausted by deficits at
the very time the gold solyency of the de-
mand notes of the Government was at
tackled by President Cleveland's own par
ty. It is IA foolish answer to this to say
that the Mckinley tariff of 1890 furnished
inadequate revenue. Whether it would or
would not have given enough revenue If
the election of free trade President had
not destroyed confidence no one will ever
know
But it is matter of record that March
8, 1898, Democratic President came into
power and with him House Democratic,
2l9 Democrats to 127 Republicans, with 10
Populists, and a Senate Democratic, A
Democrats to 99 Republicans, with Pop
ulists. The Democratic party wss in pow
err. For two years it was in full control.
Four years later President Mckinley, I'M
der like conditions, called Republican
Congress IN extra session and passed rev.
enue measure equal to the needs of the
Government. The Republican party ac-
copied the responsibilities Of power and
acted on them. The Democratic party did
not.
President Cleveland called no session
for months. When he did it was August
81, 1894, before revenue act was passed.
It was neither constitutional nor adequate
to the needs of the Government. Neither
President Cleyeland nor a Democratic
Congress sought 10 make it 30. For the
first time in the history of the Federal
Government, in time of profound peace,
with legislative responsibility in the hands
of one party long enough to pass an sde-
ouate revenue bill, these deficits occurred
in the four years of President Cleveland's
Administration, taking even fiscal years,
of which the last had four months under
President Mckinley