as, taking the Secretary's authority, it has no adequate conception of the situation nor of the conditions necessary for its restoration. The Secretary in his Annual Reports warmly recommended the retirement of the gold-bearing notes of the Government, so excessive was the annoyance caused in providing the means for their redemption. During his administration of the finances he was driven into the street to raise therefor some $293,000,000. It was natural that he should wish to avoid such mortifying alternatives. But he must have known that a recommendation to retire the legal tender notes of the Government would not for a moment be listened to unless some provision was made to fill the vacuum that would be created. He proposed no such measure. He did indeed recommend in his Report for 1895 an amendment of the banking laws so that the notes to be issued under it should equal the nominal value of the bonds put up for their security. But such provision would only add a few million dollars to the currency. A proposition for calling in the Government notes with nothing to take their place would have instantly precipitated a currency panic. Before any steps are taken for the retirement of a currency, colossal in amount like that of the United States, the alternative must be alike adequate and palpable. He could not propose any, as he was committed to the maintenance of the system of National Banks, and, of course, from the traditions of his party, wholly against a National one. accepted the situation as it was, his only care being its maintenance. In his Report for 1895 he was for maintaining the whole amount of silver notes in circulation, of which some $433,000,000 had been issued. The reason why the silver notes caused no annoyance was that they were not legal tender. They were not held by banks and bankers, consequently were not used for drawing gold out of the Treasury. They remained almost wholly in the channels of circulation, banks and bankers sedulously avoiding them, although, according to the Secretary, they were payable in gold. But these notes, apparently so harmless, were the chief cause of the embarrassments and annoyances to which the Government was subject. Being receivable in the payment of all the dues, they cut it off wholly from all power to demand gold in their collection. But for them the revenues would have been paid in gold, or in the gold notes of the Government; such employment so far as the latter were used adding to their value. They were paid in gold, or in gold notes, until

He

from the great increase of silver notes and the consequent distrust excited, the latter wholly superseded the former mode of payment. According to Mr. Carlisle, every dollar of the public revenues may be payable in silver notes, the acceptance of which cannot be forced upon a single creditor of the Government! With a Treasury overflowing with silver notes it might not be able to use a single dollar for any purpose whatever except to draw silver coins out of the Treasury. And yet this is the monetary system which Mr. Carlisle would set up as an institution for our people.

In his annual message under date of Dec. 7, 1896, Mr. Cleveland said:

I believe our present tariff law, if allowed a fair opportunity, will, in the near future, yield a revenue which, with reasonable economical expenditures, will overcome all deficiencies. In the meantime no deficit that has occurred or may occur need excite or disturb us. To meet any such deficit we have in the Treasury, in addition to a gold reserve of $100,000,000, a surplus of more than $128,000,000, applicable to the payment of the expenses of the Government, and which must, unless expended for that purpose, remain a useless hoard, or, if not extravagantly wasted, must, in any event, be perverted from the purpose of its exaction from our people. The payment, therefore, of any deficiency in the revenue from this fund is nothing more than its proper and legitimate use. The Government thus applying a surplus fortunately in its Treasury to the payment of expenses not met by its current revenues is not at all to be likened to a man living beyond his income and thus incurring debt or encroaching on his principal.

During his last administration Mr. Cleveland was incessant in his demands for the retirement of the gold-bearing notes of the Government, the sole cause, he declared, of the disastrous condition of affairs that prevailed. For their retirement, by his direction, bonds to the amount of $262,000,000, producing $293,000,000, were issued. The amount of the notes taken in was equal to the proceeds of the bonds. Of these $165,000,000, up to Dec. 7, 1896, had been paid out for the current expenses of the Government. The notes, Mr. Cleveland declared, were an endless chain for pulling money out of the Treasury. The only way to break it was to render the Government self-supporting from its revenues a proposition which he persistently refused to countenance. The endless chain was consequently allowed to run with full force. If by means of it gold could be pulled out of the Treasury, a bigger sum could be put in by borrowing. The whole proceeds, $293,000,000, of the loans, or the

amount on hand at any one time, became a "surplus in the Treasury," to be applied to the wants of the Government. Otherwise it would be squandered or stolen. To what better purpose could the Government put its money "an exaction from the people" than by means of it to defray the expenses of the Government of the people! The idea of retiring the notes, if it were ever entertained, seemed wholly lost. But not a dollar could be raised by the issue of bonds for the support of the Government. In his annual message

for 1895 Mr. Cleveland expressly declared that "the Secretary of the Treasury has no authority whatever to issue bonds to increase the ordinary revenues, or to pay the expenses of the Government." Certainly he could not do indirectly what he could not do directly. Had the Government been self-sustaining from its revenues, every note taken in could have been held in the Treasury, — in effect, retired, no occasion arising for its reissue. In using the surplus $128,000,000 in the Treasury, "the Government was not to be likened," said Mr. Cleveland, "to a man living beyond his means by incurring a debt or encroaching upon his principal." But in what form was the $128,000,000, the surplus in the Treasury? In that of promissory notes payable in gold on demand, for the discharge of which debts in another form had to be contracted. Is the power to create a debt a surplus in the Treasury? It is difficult from its wildness and incoherency to reply to Mr. Cleveland's stateIn making it he was mentally widely astray.

ment.

THE SOUND MONEY WING OF THE DEMOCRACY.

The principles of the Sound Money wing of the Democracy. .were set forth in the platform adopted at its National Convention, held at Indianapolis, Sept. 3, 1896. Its first declaration was against "Paternalism and all class legislation." In reference to the currency, it said :

The experience of mankind has shown that by reason of their natural qualities, gold is the necessary money of the large affairs of commerce and business, while silver is conveniently adapted to minor transactions, and the most beneficial use of both together can be insured by the adoption of the former as a standard of monetary measure, and the maintenance of silver at a parity with gold by its limited coinage under suitable safeguards of law.

Thus the largest possible enjoyment of both metals is gained with a value universally accepted throughout the world, which constitutes the only practical bi-metallic currency.

The substance of this is that gold is to be the standard of value, but silver money is also to be provided, its value to be maintained at the standard of gold by limiting its coinage. In this way, "the largest possible enjoyment of both metals is gained"— in other words, practical bi-metallism will be secured. The statement begs the whole question. Coinage imparts no value to that which will never be used. Debased subsidiary coins are maintained at the value of gold for the reason that they serve equally with gold in the payment of the revenues, in the purchase of postage stamps, for example. They are constantly returning to the Government to be again paid out in exchange for gold, or its equivalent. But silver dollars will never be used in the payment of the revenues on any considerable scale, as a more convenient kind of money will necessarily be provided. They never will be used as the ordinary instrument of exchange from the inconvenience of their use and uncertainty as to their value. They are a wholly superfluous form of money with every commercial people, who, on a large scale, will have only two kinds - gold as a standard of value, and paper, the symbol of merchandise, as the instrument of its transfer: The Sound Money wing of the Democracy is still a victim to the old delusion that money derives its value from the necessity of a medium of exchange that anything may serve as such if the amount be not excessive. It differs from the Free Coinage wing, not in principle, but in the matter of quantity. It says there may be too much of one kind of money, silver; that perhaps $500,000,000 would not be too much, while $1,000,000,000 would be. The reply of the other wing is if $500,000,000 are good money to-day, $1,000,000,000 will be by the time that that amount could be coined. Before any ordinary audience before that composed of the people of the United States -the Free Coinage wing of the Democracy would carry the day, the question turning wholly upon quantity, every one wishing to see that increased. As it is, the Sound Money wing, instead of leading the way, is the great obstacle to any adequate measure of reform. Their first purpose is to discharge "Paternalism " from Government. But the exercise of a great deal of "Paternalism" will be required before we can be placed upon firm and solid ground. Mere negation will never place us there.

THE FREE COINAGE DEMOCRACY.

The principles of the Free Coinage wing of the Democracy the unlimited coinage of silver at the ratio of sixteen to one - are too well known to require statement here. That it has an illustrious ancestry is well shown by a letter addressed by its great leader, Hon. William J. Bryan, late candidate of the Democracy for the Presidency, in reply to an invitation to the banquet, Jan. 8, 1897, of the "Jackson Democratic Association," of the District of Columbia. In it he said:

I regret that circumstances prevent my celebrating Jackson Day with you. We have reason to commemorate the virtues of the hero of New Orleans. His courageous defence of the rights of the people against the assaults of consolidated capital made him the idol of his party, and the remembrance of his achievements should inspire the Democrats of this generation to renewed devotion to a government of the people, by the people, and for the people. His final triumph in a struggle similar to that in which the Democracy was engaged this year gives the encouragement and hope of ultimate success.

THE ADMINISTRATION.

In his inaugural message, March 4, 1897, President McKinley said:

now,

The country is suffering from industrial disturbances from which speedy relief must be had. Our financial system needs some revision; our money is all good but its value must not further be threatened. It should all be put upon an enduring basis, not subject to easy attack, nor its stability to doubt or dispute. Our currency should continue under the supervision of the Government. The several forms of our paper money offer, in my judgment, a constant embarrassment to the Government.

Therefore I believe it necessary to devise a system which, without diminishing the circulating medium or offering a premium for its contraction, will present a remedy for those arrangements which, temporary in their nature, might well in the years of our prosperity have been displaced by wiser provisions.

With adequate revenue secured, but not until then, we can enter upon such changes in our fiscal laws as will, while insuring safety and volume to our money, no longer impose upon the Government the necessity of maintaining so large a gold reserve, with its attendant and inevitable temptations to speculation.

Most of our financial laws are the outgrowth of experience and trial, and should not be amended without investigation and demonstration of the wisdom of the proposed changes. We must be both "sure we are right" and "make haste slowly."

If, therefore Congress in its wisdom shall deem it expedient to create a commission to take under early consideration the revision of our coinage, banking,