UNITED STATES, FINANCES OP THE. 



$33,752 384, and on June 30, 1890, only $29,417- 

 003, and it has grown considerably less since 



The entire cash held by the Treasury, and 

 the purposes .for which it was held, was as fol- 

 lows on the dates named : 



It will be noticed that the fund held for the 

 redemption of bank notes has decreased from 

 $74,604,789 on Dec. 31, 1889, to $5,564,259 on 

 Dec. 31, 1890. This reduction resulted from 

 the operations of section 6 of the act approved 

 July 14, 1890, by which the balances standing 

 with the Treasurer to the respective credits of 

 national banks for the deposits then existing or 

 thereafter to be made to redeem their circulating 

 notes, excepting those constituting the 5-per- 

 cent, fund for current redemptions, were required 

 to be transferred to the Treasurer's general ac- 

 count, the bank notes thereafter to be redeemed 

 from the general cash, and reimbursement to be 

 made therefor to the Treasurer upon the certifi- 

 cate of the Comptroller of the Currency that the 

 notes in question had been destroyed and that 

 new ones would not be issued in their place. 

 This made the entire balance available for cur- 

 rent disbursement. The Government, however, 

 necessarily assumed the responsibility of meet- 

 ing on demand the redemption of the bank notes 

 for which the fund had been provided. On Dec. 

 31, 1890, the Treasury owed the banks for this 

 fund $51,323,030.75. The total cash balance on 

 that date, however, was but $38,418,806.63, a sum 

 no larger than usual for current business, show- 

 ing that the fund had been used in making pay- 

 ments from the Treasury as the law doubtless 

 contemplated it should be. One of the effects of 

 the law was therefore to put into circulation up- 

 ward of $50,000,000 legal notes which hitherto 

 had been held intact by the Treasurer as reserve, 

 thus inflating the circulation of the country to 

 that extent. 



The circulation, however, had increased since 

 1880 without the expansion in a greater ratio 

 than the population, as will be seen by the fol- 



lowing table. The amount of coin circulatior 

 is from estimates of the Director of the M 

 that of paper, from official reports - 



The release of the legal tender reserve for the 

 redemption of bank notes was not, however, the 

 main purpose of the act of July 14, 1890. This 

 act so modified that of Feb. 14, 1878, as to direct 

 the purchase by the Treasury of 4,500.000 ounces 

 of silver, or so much thereof as might be offered, 

 at the market price not to exceed one dollar for 

 371 grains of pure silver, and to issue in pay- 

 ment therefor treasury notes to be a Jegal tender 

 in payment of all debts public and private, ex- 

 cept where otherwise expressly stipulated in the 

 contract and when held by a national bank, to 

 be counted as a part of its reserve. The act fur- 

 ther declared that the Secretary of the Treasury 

 should redeem such notes, upon their presenta- 

 tion, in gold or silver coin at his discretion, and 

 that the established policy of the United Stales 

 was to maintain the two metals on a parity with 

 each other, upon the existing legal ratio or Midi 

 ratio as might be provided by law. The effect 

 of this act would necessarily be to put into cir- 

 culation every month about $0,000,000 in the 

 certificates authorized, and should the act remain 

 unrepealed its effect for good or evil, in a few 

 years, must be far reaching and important. 



Coinage. During the year ending June 30, 

 1890, there was deposited in the mints and assay 



