een able to borrow at lower rates but had in vain
besought Congress to grant the necessary authority. The Government now
appealed once more to Congress for authority to issue bonds at a lower
rate of interest. Carlisle, the Secretary of the Treasury, addressed
a letter to the Senate committee of finance, setting forth the
great saving that would be thus effected. Then ensued what must be
acknowledged to be a breakdown in constitutional government. Immediately
after a committee meeting on January 16, 1894, the Chairman, Senator
Voorhees, issued a public statement in which he said that "it would
be trifling with a very grave affair to pretend that new legislation
concerning the issue of bonds can be accomplished at this time, and
in the midst of present elements and parties in public life, with
elaborate, extensive, and practically indefinite debate." Therefore,
he held that "it will be wiser, safer and better for the financial
and business interests of the country to rely upon existing law." This
plainly amounted to a public confession that Congress was so organized
as to be incapable of providing for the public welfare.

Carlisle decided to sell the ten-year class of bonds, compensating for
their high interest rate by exacting such a premium as would reduce
to three per cent the actual yield to holders. On January 17, 1894,
he offered bonds to the amount of fifty millions, but bids came in so
slowly that he found it necessary to visit New York to make a personal
appeal to a number of leading bankers to exert themselves to prevent the
failure of the sale. As a result of these efforts, the entire issue
was sold at a premium of $8,660,917, and the treasury stock of gold was
brought up to $107,440,802.

Then followed what is probably the most curious chapter in the financial
history of modern times. Only gold was accepted by the Treasury in
payment of bonds; but gold could be obtained by offering treasury notes
for redemption. The Act of 1878 expressly provided that, when redeemed,
these notes "shall not be retired, canceled, or destroyed, but they
shall be reissued and paid out again and kept in circulation." The
Government, as President Cleveland pointed out, was "forced to redeem
without redemption and pay without acquittance." These conditions set up
against the Treasury an endless chain by which note redemptions drained
out the gold as fast as bond sales poured it in. In a message to
Congress on January 28, 1895, Pres