148 THE POPULAR SCIENCE MONTHLY. 



and book accounts, without recourse to any actual money what- 

 ever. The money itself is used as an instrument only in the 

 petty transactions of life. Yet such is the delusion regarding the 

 necessity for a certain quantity of real or coined money, or for 

 substitute money redeemable in coin, to be kept in actual circu- 

 lation, that a panic nearly happened last summer because it was 

 assumed that an undue proportion of these various kinds of 

 money or currency would be called into the treasury and would 

 not be reissued for lack of appropriations. Even the most sa- 

 gacious bankers then appealed to the treasury for relief, as if 

 this country did not hold a demand check upon the reserves of 

 gold coin throughout the world sufficient to meet any such tem- 

 porary difficulty ! The panic was allayed, but allayed only by 

 the very judicious action of the Treasury Department ; but the 

 cause of the panic was very soon removed by the import of over 

 $30,000,000 in gold coin in response to our drafts during the sum- 

 mer and early autumn. 



The whole volume of the coin of the world is at our disposal 

 if we choose to draw upon it as we did last summer. If right 

 consideration be given to existing conditions there could perhaps 

 be no better use for the excess of revenue derived by Government 

 from taxation than its application to the payment of that part of 

 the demand debt, to wit, $250,000,000, which is not now covered 

 by gold in the treasury. There could then be no objection to 

 the continued circulation of United States notes in place of the 

 coin itself ; their form could be changed ; they could be made 

 into gold certificates corresponding to the silver certificates. 

 Then the whole financial system of the country would be placed 

 upon a solid foundation such as it had never before reached. If 

 such a course were adopted, the excess of revenue over necessary 

 expenses and probable appropriations by the present Congress 

 would be likely to amount to about the sum of uncovered notes, 

 viz., 8250,000,000, in the interval between the present time and 

 the time when the four and a half per cent bonds would become 

 due and payable in 1891. Any excess of revenue at that time 

 could then be applied to the payment of such four and a half per 

 cent bonds. Is it not a financial absurdity to buy bonds not yet 

 due at a high premium, and to make a forced loan by the issue 

 of notes due on demand for that purpose ? 



It may, therefore, be time enough to shape legislation on the 

 tnere ground of an alleged excess of revenue, when the legal- 

 tender notes and the four and a half per cent bonds shall all have 

 been paid, and not before. 



There may be other reasons for reducing taxation. The pur- 

 pose of this memorandum is simply to treat the alleged excess of 

 revenue and to show that there is as yet none above the positive 



