Newspaper Page Text
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THE MACON TELEGRAPH: ’WEDNESDAY MORNING, DECEMBER 4, 1895.
(Continued from page 2.)
these efforts to improve the consular
service ought to be immediately sup
plemented by legislation providing for
consular inspection. This has frequent
ly been a subject of executive recom
mendation, and I again urge such ac
tion by congress as will permit the
frequent and thorough Inspection of
consulates by officers appointed for
that purpose or by persons already In
the diplomatic or consular service. The
expense attending such a plan would be
Insignificant compared with its useful
ness and I hope the legislation neces
sary to set it on toot will be speedily
forthcoming. I am thoroughly con
vinced that in addition to their sala
ries, our ambassadors and ministers at
foreign courts should be provided by
the government with official residences.
The salarlee of these officers are com
paratively small, and in most cases in
sufficient to pay their necessary ex
penses and the cost of maintaining
household establishments in keeping
with their Important and delicate func
tions. The usefulness of a nation's di
plomatic representative depends much
upon the appropriateness of his gufr-
roundings and a country like ours,
while avoiding unnecessary glitter and
show, should be certain that it does not
suffer in its relations with foreign na
tions through parsimony and shabbi
ness in its diplomatic outfit. These
considerations and the other advan
tages of having fixed and somewhat
permanent locations for our embassies,
would abundantly justify the moder
ate expenditure necessary to carry out
this suggestion.
THE FINANCIAL SITUATION.
As we turn from a review of our for
eign relations to the contemplation of
our national financial situation, we are
immediately aware that we approach a
subject of domestic concern more im
portant than any other that can en
gage our attention and one at present
in such a perplexing and delicate pre
dicament as to require prompt and
wise treatment. We may well be en
couraged to earnest effort in this di
rection when we recall the steps al
ready taken towards improving our
economic and financial situation and
when we appreciate how well the way
has been prepared for further progress
by an aroused and Intelligent popular
interest in these subjects. A customs
revenue system designed for the pro
tection and benefit of favored classes
at the expense of the great mass of our
countrymen and which, while ineffi
cient for the purpose of revenue, cur
tailed our trade relations and impeded
our entrance to the markets of the
world, has been superceded by a tariff
policy which In principle Is based upon
a denial of the right of the government
to obstruct the avenues to our people’s
cheap living or lessen their comfort and
contentmeut for the sake of according
special advantages to favorites and
which, while encouraging our inter
course and trade with other nations,
recognizes the fact that American self-
reliance, thrift and ingenuity can build
up our country’s industries and develop
the resources more surely than ener
vating paternalism.
The compulsory purchase and coinage
of silver by the government unchecked
and unregulated by business conditions
and heedless of our currency needs.
Which for more than fifteen years di
luted our' circulating medium, under
mined confidence abroad in our finan
cial ability, and at last culminated in
distress and panic at home, has been
recently stopped by the repeal of the
laws which forced this reckless scheme
upon the country. The things thus ac
complished. notwithstanding their ex
treme importance and beneficent effect,
fall far short of curing tho monetary
evils from which we suffer as a result
of long indulgence in ill-advised finan
cial expedients.
UNITED STATES NOTES.
The currency denominated United
States notes and commonly known as
greenbacks was issued in large volume
during the late civil war and was in
tended originally to meet the exigen
cies of that period. It will be seen by
a reference to the debates in congress
at the time the laws were passed au
thorizing the issue of these notes that
their advocates declared they were in
tended for only temporary use and to
meet the emergency of war. In almost,
if not all the laws relating to them
gome provision was made contemplat
ing their voluntary or compulsory re
tirement. A large quantity of them,
however, were kept on foot and min
gled with the currency of the country,
so that at the close of the year 1874
they amounted to $381*999,073. Imme
diately after that date, and in January,
3875, a law woji passed providing for
the resumption of specie payments by
which the secretary d? the treasury
was required, whenever additional cir
culation was Issued to national banks,
to retire Unlted'Statew notes equal In
amount to 80 per cent, of such addi
tional national bank circulation until
such notes were reduced to $300,000,000.
This law further provided that on and
after the first day of January, 1879, the
United States notes then outstanding
should be redeemed in coin, and in or
der to provide and prepare for such
redemption, the secretary of the treas
ury was authorized not only to use any
surplus revenues of the government,
but to issue bonds of the United States
and dispose of them for coin and to
use the proceeds for the purpose con
templated by the statute. In May, 1878,
and before the date thus appointed for
the redemption and retirement of these
notes, another statute was passed for
bidding their further cancellation and
retirement. Some of them had, how-
GORHAM’S SILVER.
THE PURPOSE m
; OF MAKING
[PRESENTS
feeing to give pleasure,
why not give all the
pleasure possible? Cause
the loved one to exclaim,
as she opens your Christ
mas gift of Silver:
“And it's GORHAM
Silver, too! 1 Seethe
Doc, Anchor, and Letter
G! How perfectly
\ delightful!"
Beyond "GORHAM,”
desire or expectation
never reaches.
Too good foe Dry Goods Stares-
Jewclen only.
IMfs
over, been previously redeemed end
cancelled upon the the Issue ot addi
tional national bank circulation as
permitted by the law of 1875. so that
the amount outstanding at the time of
the passage of the act forbidding their
further retirement was 5346,631.016.
The law of 1878 did not stop at distinct
prohibition, but contained in addition
the following express provision, "and
when { any of said notes may
be redeemed or be received Into
the treasury under any law
from any source whatever and
shall belong to the United States, they
shall not be retired, cancelled or de
stroyed, but they shall be reissued and
paid out again and kept In circulation.”
This was the condition of affairs on
Jan. 1, 1879, which had been fixed upon
four years before the date for entering
upon the redemption and retirement of
all these notes and for which abund
ant means had been provided.
The government was put In
the anomalous situation ot ow
ing to the holders of Its notos
debts payable In gold on de
mand which could neither be retired
by receiving such notes In discharge of
obligations due the government, nor
cancelled by actual payment In gold.
It was forced to redeem without re
demption and to pay without acquit
tance. There had been Issued and sold
595,609,000 of the bonds authorized by
tho resumption act of 1875, the pro
ceeds of which, together with other
gold In the treasury, created a gold
fund deemed sufficient to meet the de
mands which might be made upon It
for the redemption of the outstanding
United States motes. This fund, to
gether with such other gold as might
bo from time to time In tho treasury
available for the purpose, has since
been called our gold reserve, and 6100,-
000,000 has been regarded as an ade
quate amount to accomplish Its ob
ject. This fund amounted on Jan. 1,
1878. to 3114,193,360, and though there
after constantly fluctuating. It did not
fall below that sum until July, 1893.
In April, 1893, for the first time since
Its establishment, this reserve amount
ed to lees than $100,009,000, containing
at that date only 397,011,330. In the
meantime, and In July, 1890, an act had
been passed directing larger govern
mental monthly purchases of silver
than had been required under previous
laws, and providing that in payment
for such silver treasury notes of the
United States should be Issued paya
ble on demand In gold or silver coin at
the discretion of the secretary of the
treasury. It was. however, declared
In the act to be the established policy
of the United States to maintain the
two metals on a parity with each other
upon the present legal ratio, or such
"ratio as may be provided by law.”
In view of this declaration It was not
deemed permissible for the secretary of
of the treasury to exercise the discre
tion In terms conferred on him by re
fusing to pay gold on these notes when
demanded, because by such discrimina
tion In favor of the gold dollar the so-
called parity of the two metals would
be destroyed and grave and dangerous
consequences would be precipitated by
affirming or accentuating tho con
stantly widening disparity between
their actual values under the existing
ratio. It thus resulted that the treas
ury notes Issued In payment for sliver
purchases, under the law of 1890. were
necessarily treated as gold obligations
at the option of the holder. These notes
on Nov. 1, 1893, when the law compell
ing the monthly purchase of silver was
repeated, amounted to more than 5155.-
000,000.
The notes of this description now out
standing, added to the United States
notes still undlmlnlshcd by the redemp
tion or cancellation, constitute a vol
ume of gold obligations amounting to
nearly 3500,000,000. These obligations
are the Instruments which, ever since
we have had a gold reserve, have been
used to deplete It. This reserve, as has
been stated, had fallen in April, 189^,
to 397,011,330. It has from that time to
the present, with very few and unim
portant upward movements, steadily
decreased, except as it has been tem
porarily replenished by the sale of
bonds.
CAUSES FOR THE SHRINKAGE.
Among the causes for the constant
and uniform shrinkage In the fund may
be mentioned the great falling oft of
exports under the operation of the tar
iff law until recently In force which
crippled our exchange of commodities
with foreign nations and necessitated
to some extent to the payment of our
balances In gold, the unnatural Infu
sion of silver Into our currency and
the Increasing agitation for Its free and
unlimited coinage which have created
apprehension as to our disposition or
ability to continue gold payments. The
consequent hoarding of gold at home
and the stoppage of Investment of for
eign capital, as well as tho return of
our securities already sold abroad and
the high rate of foreign exchange which
Induced the shipment ‘ot our gold to
be drawn against as a matter of spec
ulation.
In consequence ot these conditions
the gold reserve on Feb. I, 1894, was
reduced to 365,438,377, having lost more
than 331,000,000 during the preceding
nine months, or since April 1, 1893. Its
replenishment being necessary and no
other manner of accomplishing It be
ing possible, resort was had to the Issue
and sale of bonds provided for by the
resumption act of 1875. Fifty millions
of thr-fie bonds were sold, yielding 158,-
6.13,295.76, which was added to the re
serve fund of gold then on hand. As
a result of thts operation this reserve,
which bad suffered constant and large
withdrawals in the meantime, stood on
March 6. 1894, at the sum of 3107,446,802.
Its depletion was. however, Immediate
ly thereafter so accelerated that on
June 30, 1894, It had fallen to 364,873,020,
thus losing by withdrawals more than
342,000,000 In five months and dropping
slightly below Its situation when the
sale ot 350,000,000 in bonds was effected
tor Its replenishment.
This depressed condition grew worse,
and on Nov. 24. 1894, our gold reserve
being reduced to 357,639,701, it became
necessary to again strengthen It. This
was done by another sale of bonds
amounting to • 350.000.000, from which
there’ was realized 358,5.18,600. with
which the fund was Increased to 3111,-
142,031.
On Dec. 4. 1894, again disappointment
awaited the anxious hope for relief.
There was not even a lull In the ex
asperating withdrawals of gold; on the
contrary, they grew larger and more
persistent than ever. Between Dec. 4,
1834, and the early part of February.
1895, a period of scarcely more than
two months after the second reinforce
ment of our gold reserve by the sale
of bonds. It had lost by such with
drawals more than 369.000,000 and had
fallen to 341.340.191. Nearly 341,000,000
had been withdrawn within the month
immediately preceding this situation.
NO AID FROM CONGRESS.
In anticipation of Impending trouble,
I had, on the 21th day of January, 1895.
addressed a communication to the con
gress fully setting forth our difficulties
and dangerous position and recom
mending that authority be given to the
secretary of the treasury to !«ue bonds
bearing a low rate of Interest, paya
ble by their terme In tn gold, for tho
purpose of maintaining a sufficient
gold reserve, and also for the redemp
tion and cancellation of outstanding
United States notes and the treasury
notes Issued for tho purchase of Bllvcr
under the law of 1890.
This recommendation did not, how
ever. meet with the approval of the
congress In February, 1895, therefore,
the situation was exceedingly critical,
with a reserve perilously low and a
refusal of congressional aid everything
Indicated that tho end of gold pay
ments by the government was Immi
nent.
The results of prior bond issues had
been exceedingly unsatisfactory, and
the large withdrawals ot gold Imme
diately succeeding theifi public sale in
open market gave rise to a reasonable
suspicion that a large part of the gold
paid Into the treasury upon bond sales
was promptly drawn out again by the
presentation of United States notes or
treasury notes and found Its way to
the hands of those who had only tem
porarily parted with It In the purchase
of bonds. .
In this emergency and in view of its
surrounding perplexities. It became en
tirely apparent to those upon whom
the struggle for safety was dependent
not only that our gold reserve must be,
for the third time In less than thirteen
months, restored by another Issue and
sale of bonds bearing a high rate of
Interest and badly suited to the pur
pose, but that a plan must be adopted
for their disposition promising better
results than those realized In previous
sales. An agreement was. therefore,
made with a number of financiers and
bankers whereby tt was stipulated that
bonds described In the resumption act
of 1875, payable tn coin thirty years
after their date, bearing Interest at the
rate of 4 per cent, pel* annum and
amounting to about 363,00().090 should
be exchanged for gold receivable by
weight amounting to a little more than
665,000.000.
This gold was to be delivered in sueh
Installments as would complete Its de
livery within about six months from
the, date of the contract and at least
one half of the amount was to be fur
nished from abroad. It was also agreed
by those supplying this gold that dur
ing the continuance of the’ contract
they would, by every means In their
power, protect the government against
gold withdrawals. The contract also
provided that If congress would au
thorize their Issue, bonds payable by
their terms in gold and bearing Inter
est at the rate of 3 per cent, per an
num might, within ten days, be substi
tuted at par for tho 4 per cent, bonds
described in the agreement.
On the day that tho contract was
made Its terms were communicated to
congress by a special executive mes
sage in which It was stated that moro
than 316,000,000 would he saved to the
government if gold bonds bearing 3
per cent. Interest were authorized to
be substituted for those mentioned In
the contract. Congress having declined
to grant the nccesary authority to se
cure this saving, tho contract, unmod
ified, was carried out. resulting In a
gold reserve amounting to 3107,571,230.
on the 8th day of July, 1895. ’
RESTORED CONFIDENCE.
The performance of this contract not
only restored the reserve, but checked
for a time the withdrawals of gold and
brought on a period of restored confi
dence nnd such peace and quiet In bus
iness circles as were of tho greatest
possible value to every interest that
affects our people.
I have never hod tho slightest mis
givings concerning tho wisdom and pro-
prlety of this arrangement and am
quite willing to answer for my full
share of the responsibility for Its pro
motion.
I believe It averted a disaster the Im-
mcnsltit of which was fortunately not
at tho time generally understood by
our people.
Though the contract mentioned
stayed for a time the tide of gold with
drawals. Its good results could not bo
permanent. Recent withdrawals have
reduced tho reserve from $107,671,230 on
tho 8th clay 1 of last July. 1895, to 370,-
333,966. llow long It will remain large
enough to render Its Increase unnec
essary, Is only a matter it conjecture,
though quite largo withdrawals from
shipment In the Immediate future arc
predicted In well Informed quarters
About 316.009,000 has been withdrawn
during the month of November.
The foregoing statement of events
and conditions develops the fact that
after Increasing our Interest bearing
bonded Indebtedness more than 3162.-
000,000 to save our gold reserve we are
nearly where we started, having now In
such reserve 370,333,966 as against 365,-
438,377 In February, 1894, when the first
bonds were Issued.
Though the amount of gold drown
from the treasury appears to bo very
large, oh gathered from the factr. and
figures herein presented, It actually
was much larger. Considerable sums
having been acquired by the treasury
within the several periods stated with
out the Issue of bonds. On the 28th
of January, 1895, It was reported by
the secretary of the treasury that more
than 3170,000,000 of gold had been with
drawn for hoarding or shipment during
the year preceding. He now reports
that from January 1,1877. to July 14.
1890, a period of more than eleven
years,’ only a little over 328,000,000 was
withdrawn and that between July 14,
1890, and the date of the passage of
the law for an Increased purchase ot
silver, and the tint day of December,
1895, or within less than five and a half
years, there way withdrawn nearly
3375,000.000, making a total of more
than 3403,000,000 drawn from the treas
ury In gold since January 1,1879, the
date fixed In 1876 for the retirement of
tho United States notes* Nearly 3327,-
000,000 of the gold thus withdrawn has
been paid out on these United States
000.000 Is HtlU uncanccllcd, and ready
notes; and yet every one. of the 3346.-
to do service In future gold depletions.
More than 176.000,000 in gold has.
since their creation In 1890, been paid
out from the treasury upon the notes
given on the purchase of silver by the
government, and yet the whole,
amounting to 3155,000,000, except a little
more than 116,000,000, which has been
retired by exchanges for silver at the
request of the holders, remains out
standing and prepared to Join their
older and more experienced allies In fu
ture raids upon the treasury gold re
serve. In other words, the govern
ment has paid In gold more than nine-
tenths of Its United States notes and
■till owes them all. It has paid In gold
about one-half of Its notes given for
silver purehasea without extinguishing
by such payment one dollar of these
notes. When added to all this we arc
reminded that to carry on this as
tounding fln&nlcal scheme the govern
ment has Incurred a bonded Indebted
ness of 315.000.000 In establishing a gold
reserve and 3162,315,400 In the effort to
maintain It, that then, the annual in
terest charge on such bonded Indebt
edness is more than 311.000,000, that a
continuance in our present course may
THE TRUE CRITERION
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ALL OUR BOTTLE WHISKIES ARE BOT
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MACON, CrA.,
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at WHOLESALE and RETAIL.
Wo Arc Offering Extraordinary Inducements to Buycra of
ib. an hi i ie m
Race Saddles, Horse Boots and a General Line of Turf Goods.
We manufacture everything in our line. We can and will sell for less than any
other house in tho South Call and see.
G.BEMD&CO., 4 rsr
result In further bond Isucs and that
wo have suffered or are threatened
with all this for the sake of supplying
gold foq foreign shipment or facilitat
ing Its hoarding at home, a situation
Is exhibited which certainly ought to
arrest attention and provoke Immedi
ate legislative relief.
RETIREMENT OF NOTES.
I am convlncodl tho only thorough
and practicable remedy for our trouble
Is found In tho retirement and cancel
lation of our United StateB notes, com
monly called greenbacks, and tho out
standing treasury note* Issued by the
government In payment of silver pur
chases under the act of 1891). I believe
this could bo quite readily accom
plished by the exchange of these notes
tor United States bonds of small as
well us large denominations, bearing
a low rale of Interest. They should, he
long termed bonds, thus Increasing
their desirability as Investments, and
because their payment could be well
postponed to a period far removed
frontl the present linaelal burdens and
perplexities, when, with Increased pros
perity ond resources, they would be
more easily met.
To further Insure the cancellation of
these notes and also provide a way by
which gold may bo added to our cur
rency In lieu of them, a feature In the
plan should be authority given to tho
secretary of the treasury to dispose of
the bonds abroad for gold If necessary
to complete the contemplated redemp
tion and cancellation permitting him
to use the proceeds of such bonds to
take up and cancel any ot the notes
that may be In the treasury or that
may be received by the government on
any account.
The Increase of our bonded debt In
volved tn this plan would amply be
compensated by renewed activity and
enterprise In all business circles the re
stored confidence at home, the rein
stated faith tn our monetary strength
abroad and the stimulation of every In
terest and Industry that would follow
the cancellation of the gold demand
obligation! now afflicting us. tn any
event, the bonds proposed would stand
for the extinguishment of a trouble
some Indebtedness, while In the path
we now follow there lurks the menace
of unending bonds with our Indebted
ness still undischarged ami aggregated
In every feature. The obligation* neces
sary to fund this Indcbtendness would
not equal In amount those front which
we have been relieved since 1884 by
anticipation and payment, beyond the
requirements of the sinking fund, out
of our surplus revenues.
The currency withdrawn by the re
tirement of the United States notes and
tho treasury notes, amounting to prob
ably less han 3486,(100,600, might ho sup
plied by such gold as would be used on
their retirement, or by on Increase In
tho circulation of our national hanks.
Though the aggregate capital of those
now In existence amounts to more
than 3664,000,000, their outstanding cir
culation based * on bond security
amounts to only abifiit 3190.000,000. They
are authorized to Issue notes amount
ing to 00 per cent, of bonds deposited
to secure their circulation, but In no
evont beyond the amount of tholr capi
tal stock, ond they are obliged to pay
t per cent, tax un tho circulation they
Issue. i
I think they should he allowed to Is
sue circulation equal to the par value
lit the bonds they deposit to secure It,
anil that tho tax on their circulation
he reduced to one-fourth of I par cent.,
which would undoubtedly meet all the
expense the government Incurs on their
account. In addition they should be al
lowed to substitute for deposit. In lieu
of the bonds now required a* security
for their circulation, those which
would be Issued for the the purpose of
retiring the United States notes and
treasury notes.
The banks already existing, If they
desire to avnll themselves of tho provi
sions of the law thus modified, could
Issuo circulation In addition to that al
ready uutstar.d ng, amounting to 3478,-
060. and which would nearly or quite
equal the currency proposed to be can
celled. At any rate. I should confident
ly expect to see the existing national
hanks, or others to be organized, avail
themselves of the proposed encourage
ments to Issue circulation, and prompt
ly Hill any vacuum and supply every
currency needed.
It has always seemed to mo that the
provisions of the law regarding tlje
capital of national banks, which op
erate as a limitation to their location,
fall to make proper comiwnsation for
the suppression of state banks, which
come nearer to the people In all sec
tions of the country and readily fur
nished them with banking accommoda
tions and facilities. Any Inconvenience
or embarrassment arising from the re
strictions on the location of national
hanks might well be remedied by bet
ter adapting the present system to the
creation of banks In smaller communi
ties or by permitting banks ot large
capital to establish branches In such
localities aa would serve the people, so
regulated and restrained aa to secure
their safe and conservative control and
management.
But there might not be the neceulty
for sueh nn addition to the currency
by new Issues of honk circulation hs nt
first'glance Is Indicated: If wo should
bo relieved from maintaining a gold
reservation under conditions that eon-
stltutn It tho barometer our solvency,
nnd If our treasury should no longer
be tho foolish purveyor of gold for na
tions uliroad. or for speculation and
hoarding by our citizens at home, I
should expect to sco gold resumo It*
natural and normal functions In the
business affairs of tho country and
cease to be an object attracting the
tlmbl watchfulness of our people and
exciting their sensitive Imaginations.
I do not overlook the fact that the
cancellation of the treasury notes Is
sued under the silver purchasing act
of 1890 would leave the treasury In tho
actual ownership of sufficient sliver, In-
eluding seigniorage, to coin nearly
3178,060.000 In standard dollars. It Is
worthy of consideration whether this
might not from time to time be con
verted Into dollars or fractional coin
and slowly put Into circulation, as In
the Judgment of tho secretary of tho
treasury the necessities of the country
should require.
Whatever Is attempted should be bo
entered upon fully appreciating the fact
that by careless, easy descent we have
reached a dangerous depth, and that
our ascent will not he accomplished
without laborious toll and struggle.
We shall be wise If we realize that we
(Continued on page 7.)
“Mothers’ Friend”
SEBraasl.
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is tho best remedy for RISING OF TUB
BREAST known, and worth the price
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Mrs. M. M. Brewster, Montgomery, Ala.
Sent by Express or mill, on receipt of price
SI.00 err hauls. Book “To Mothers" mailed
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BftAOriELD REGULATOR OO.. ATUUrTS.0*.
v For Sale at ’All Drug Stores.
Ji