Evening star. [volume] (Washington, D.C.) 1854-1972, 1886-08-20
A FINANCIAL SURPRISE.
What Secretary Fairehild Says Of the
Flfteen MilliOu Bond Cali.

TT WAS ISSUED BRcACsE THE CONDITIONS
WE'RE ALL FAvoRADLE. AND WILL BIB roll
LOWED By OTHER GALA II THE CONDITIONS
coFTINUK-Nor CARRYING OUT THE MoRRI-
SON RESOLUTION, WHICH WAS MANDATORY.
The fifteen million bond call made late yes
terday afternoon was great surprise. coming
Is It does right on the heels OF the ten million
CALL Almost up TO the moment the order was
issued nothing was known Of 1t, even by the
Treasury officials who have to do with II under
the Secretary.
STAR reporter asked Secretary Fairchiid
today IL this was not . change Of policy for the
department.
"No." he said, at 10 not a change OF policy.
The receipts are unusually large just at this
time Silver is being absorbed by the people
pretty we'll, and the conditions generally are
quite favorable for such q call ~ this time. The
caii does not affect the money market enough
bonds are mostly held by the national banks,
but what little effect 1t has 10 hopeful and the
%s . sss 'as osns' ~
out the Morrison resolution, the secretary said,
with smile. that IL went far beyond that. He
erect The reason Secretary Manning had not
made such calls was that the conditions were
not favorable The thing had been overdone
wnen ne assumed control Of the department,
and Mr.. Mccullough was In doubt about the
result when he went out. Secretary Manning
AA>A " Wdit uutll the COQOltlO0 OIL the treasury
would warrant further reduction OF the debi.
To have gone on calling bonds with the Treasury
In the condition IL was might have reduced the
sale TO call more bonds at that time il the two
metals, gold aud silver, were to be kept on an
e et In susostanes." he said, "the situa-
gold. silver and paper money, the fractional
currency and silver certinoates. In paying out
select which he prefers. pW Whenever he wants
Roio, silver or paper-he can have. The one Is
as good as the other, and he will take that
which is most convenient for his use. But IL q
scarcity of one OF these moneys precludes this
selectfon-if the government hands out silver,
tor instance. and says, "Here, you must take
ton IL changed. For instance say the govern.
ment pays man in this way Q hundred thou
SAND dollars In silver. He has no use tor more
IMAM SoO,OOO. He cannot use more than that
IN his business or distribute 1t among the people.
He has the other $5O,OOO on his hands. He
mus must DO one OF two thng. with it-buy prop
erty, the man he buys of does not want the
silver any moro than he does. He must, there
Butit is most likely that he Win put the money
all II can, so there is no demand for silver. It
it don't stop there. This discount runs through
all the silver In circulation and all there is in
the Treasury. We then have a deprecated
currency. SO you see we cannot run the risk
OF this The Treasury must be the reservoir in
which 10 held all the money that cannot bs alb
Soroeu ny BUSINESS anu Dy Tue people. The
natural condition OF equality between the
moneys must be preserved. The coinage of two
million silver dollars per month was an un-
natural condition made by statutory action. To
balance this the Treasury surplus had to be in
creased SO as TO provide for that which could
not be used Even if there l. no more silver than
the people want 1t takes time to distribute it,
and 1t must he held In tho Treasury and let
out to meet demands. 1t must be let out just
fast q the people will absorb II, no faster. The
department had to wait before making large
bond calls until the condition OF the Treasury
was such as 70 allow the choice of money. Now
the receipts Of the government are large the
people are taking the silver pretty well. The
calls are by Way of experiment. We will call as
much Us We can. Thus far the calls have
amounted since the LIST of July to $37 900, 900.
The probability is that the calls during the year
Will very farexceed the amount necessary for
the sinking fund. They will be made as often
as the condition Of the Treasury will warrant.
There is no fixed limit. No one can tell three
months ahead what can be done in the way of
bond calls. The trouble with the Morrison
resolution was, as Was said in Congress, that it
made 1t obligatory 10 call just SO much. This
cannot be done. 1t is impossible to tell just
what the situation may be at any future
tim0n