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held twenty-two and a half millions in cash and public securities. Its deposits at that time were one hundred millions. Certainly its business was large, and the confidence in its management must have been great. On an analysis of its available means, however, it seems to have had about twenty-five per cent. of its deposits in that shape, and the principle governed it which Judge Kelley's bill applies to the United States Treasury, that its so-called reserve shall always equal one-fourth of its obligations. It used to be thought true that he who made two blades of grass to grow where one previously grew was a public benefactor, and it is now only about to be found out that the process which gives to capital double use and extracts from it the principle of idleness is the cause of all our demoralization. In large cities the concentration of capital in institutions of good repute is not remarkable. The bank alluded to issues no circulation, but it does make the means entrusted to it as active as possible, but no more active than the plan under consideration requires that the Treasury should make the deposits committed to it.

The third question is one of great moment. Is it wise for the government to absorb the active capital of the country, that on which the farmer, the mechanic, the manufacturer and the merchant now depend to facilitate their daily transactions, to the extent of five hundred millions of dollars in six months, that it may be converted into gold, transferred to Europe, and there exchanged for bonds of the United States? It will be remembered that bonds can not be brought home from Europe except in exchange for gold or its equivalent. Judge Kelley says this process "would relieve us of that amount of debt abroad which so curses us." A curse more intense will follow the act which takes so much capital from our own people who need it, who cannot continue producers without it, who in being deprived of it would be ruined or crippled, and send it abroad to the present holders of the debt who desire to hold it at a low interest, and cannot he compelled to take the principal excepting on their own terms. Which is the greater curse to a young and vigorous country, where capital is needed for the development of its resources, to send away five hundred millions in gold at once, or to send two-and-a-half per cent. on that amount semi-annually? The advocates of such a policy cannot be familiar with the condition and movements of capital in the community in which they live. At this moment capital may be inactive, but it is not in excess. Large sums are

continually sought for, and almost invariably they are obtained abroad. Could this suggested operation be carried out without serious disturbance at home, which is a vain thought, the vacuum produced here would be filled by the negotiation abroad of loans of less repute and bearing a higher interest; and the most favorable result that could be hoped for would be a larger amount of foreign indebtedness, by the difference in value of the security, at a higher rate of annual interest. The depletion, which it was proposed to stop, must be seriously aggravated.

A foreign debt under our present circumstances is merely a proof that capital is more valuable to us than to those who hold our obligations; and when the country can from its increased wealth pay off its foreign debt it will be wise to do so; but at this moment no other than a legitimate process can effect that desirable purpose to the advantage of the country. Our savings and our earnings are the reliable means. Let us look to them. "It would be," said Mr. Young, of the Bureau of Statistics, " of particular advantage if the greater proportion of our public debt was held in this country, and thus prevent the continual drain of gold to pay the interest." How much in sympathy with this philosophical reflection are many whose pockets are not equal to the demands upon them?

Connected with this proposition there is a delusion, which even its advocates may not be aware of. The thought presented for public consideration is that the government would become a borrower at the rate of 3.65 per annum, and with the money extinguish its existing indebtedness bearing five and six per cent. interest, and thus profit largely. Let us examine if it be so. The rate of interest to be paid is 3.65 on 100, but of that 100 one-fourth becomes a reserve; therefore, 3.65 is paid for the use of 75, and the interest becomes 4.86%, and this is without any allowance for the very large cost which would be incurred in carrying the plan out in all its details." The loans which are now being negotiated are had on more favorable terms.

The conclusions which this examination has brought me to are that the low rate of interest becomes a full rate; inflation is a necessary consequence; the invested capital of this country is to be violently disturbed and its industries deranged;—and all this that our

5 N. B.-This feature is treated from another standpoint by Mr. Knox, Controller of the Currency, in his able report of November 29, 1875. See page 20.

foreign debts may be increased and the annual outflow of interest in gold be materially enlarged. I believe these conclusions to have been reached without prejudice, and they are not such as the advocates of the scheme have presented for the public ear. When I reflect upon them they do not seem to me to admit of a doubt, and why the serious consequences involved in it are not apparent to them is one among the many mysteries of the present day.

THE GOLD STATEMENT CORRECTED.

EVERAL reports recently called for by Congress have been

Treasury, and to the balance or reserve of coin and bullion, gold and silver, which is stated as being held at the several dates for which statements are made public. Of these statements there are the following made public regularly: First, the daily telegraphic statement given at the Treasury Department to the Associated Press, and published in the financial column of the daily journals at New York. Next the monthly debt statement made up at the close of the last business day of each month, and printed on a slip at the Treasury for distribution, from which it is taken for telegraphic despatch to all the papers on the first day of each month. Lastly, the annual report of the Secretary of the Treasury and the United States Treasurer at Washington, printed with the Secretary's report in the finance report for each year. This gives the state of the Treasury on the closing day of the fiscal year. Perhaps it should be said that in addition to these the Assistant Treasurer at New York gives to the press the statement of the condition of that office at the close of each business day.

Of the special reports of the condition of the Treasury called for by Congress, two have been made, under date respectively of January 25th and February 24th. In one case the account was stated of the items held and "counted as cash" at the several mints and depositaries on January 25th; the other and later statement was of the gold, silver or other items of coin or specie balance belonging to the United States. These statements, so far as they have been made public, are as follows:

The Secretary of the Treasury sent to the House of Representatives to-day, in response to the resolution of January 31, a detailed statement showing the actual amount of cash on hand in the Treasury, the several depositories and mints. The account is as follows:

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Legal tender notes held on special deposit for the payment of certificates of deposit issued under sections 5,193 and 5,194 of the Revised Statutes, and for the redemption of notes of the national banks failed and in liquidation, and for reducing the circulation.......

Other legal tender notes..

Gold coin.....

5,123,730 41

59,750,756 75 17,608,684 26

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The Secretary says that this amount does not include any money in transit, nor is the amount of Treasury debts, outstanding at that time, taken into consideration. The amount of money in bank depositories at the close of business hours on the 22d of January (the latest date that could be reached) was $10,140,611 61.

The second statement, made to represent the state of the Treasury on Feb. 24, is as follows:

The resolution of Mr. Sayler, calling for a statement of the component parts of the coin balance of the Treasury, has brought out the following report as showing the condition of the items on Feb. 24th:

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4. Sinking Fund and interest...

IO 00 1,427,200 00 1,873,825 50 ..13,832,553 65 9,254,634 50

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5. Bonds redeemed and interest................ .....................................

6. Interest due and unpaid.........

7. Outstanding bonds called for Sinking Fund.. 2,548,000 00

8. Outstanding coin certificates......

9. Silver coin and bullion.........

...33,968,300 00

..14,193,618 70 78,645,604 41

10. Leaving as owned by the Government.........

$13,341,423 76

To these it would be proper to add :

The following table shows the amount of gold held by the Government on the 1st instant (March) as exhibited by the debt statement :

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"We have made no deduction of the accrued interest to date, from the amount reported as coin, as only $4,864,167.50 were due and payable on the Ist. Subtracting this amount would leave $3,092,517.82. The $15,349,191 of silver coin and bullion held in the Treasury for the purposes of resumption are included in the amount above reported as coin."

To understand these statements, and those of the monthly debt report and daily balance, it must be borne in mind that the accounts of the several sub-treasuries and U. S. depositories are kept as if each was independent of and separate from the central office at Washington, and that the general report of the state of the Treasury is a summary of these several reports, without the intervention of any clearing of balances among them. Whatever is sent to any one of these offices from Washington having the character or quality of money in the uses of the office to which it is sent, is charged against that office, and is carried on its books and in its reports as money. In this way unissued gold certificates, varying in amount from seven to eleven millions of dollars, are held at the New York sub-treasury, appearing in its daily reports as part of the coin balance. A smaller amount is held at other sub-treasuries in the same manner. On Jan.

25 last the sum of $8,787,761 in gold certificates was held by the several sub-treasuries, and formed a part of the seventy millions of "coin" reported from Washington as being in the Treasury on that day. On June 30, 1875, the amount reported as being at the N. Y. depository unissued was $6,490,700; and at the same time $161,400,000 of these certificates was held in reserve at Washington ready for use; not, however, appearing in the "coin" statement, though necessarily so appearing for all that was transmitted to New York.

All forms of gold indebtedness in bonds or coupons deposited with or held by any one of these depositories after payment, must also be held and counted as "coin" until the account in each case

N. Y. Journal of Commerce, March 3, 1876.

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