The advocate., 1890-07-16
"A FRAUD ON THE PUBLIC"


From The National Economist
During Senator Teller's speech on the
silver bill he was interrupted by Senator
Mcpherson, who said:
The Senator n probably aware Of the fact that
In the past two years II has been necessary Tor
the treasury department ~ make large loans Ol
gold In the city Oi New York, for lhe purpose OF
maintaining lts obligations which tire treasury
department received ~ De payable In gOldY A!
one time no less than 9lO0O000O WAS borrowed
by the treasury department from the New YORK
bankers Therefore VIZ have been pretty near
the point when We should have been Obliged tO
pay some Of the obligations OF the government In
silver
After making a thorough search
through the reports Of the treasury de-
partment, in which no mention could be
found Of single loan spoken Of by Mr.
Mcpherson, a letter OF inquiry was sent
10 the secretary Of the treasury in refer
ence 10 the matter, which brought the
following reply:
DEAR Slls.-I am In receipt Of your recent
letter, referring tO statement ~ The eneCt tnat
the treasury department. has found II necessary
10 make large loans Of gold in the city Of New
York for the purpose OF maintaining los Obliga-
tlOnS and that "At one time no less than 100000
no was borrowed by the treasury department
from New York bankers" and asking " be fur-
uIshed with Conformation regarding the amount
OF gold borrowed, together with the rate and
amount Of interest paid from and including july
1896.
The only transaction which resembles the sub.
leCt OF your Inquiry occurred, ! learn, In July,
1895, when the then secretary Of Che treasury ana
the treasurer Of the United States made an ar
rangement with the associated banks OF New
York 10 take from the treasury subsidiary silver
In exchange for gold coin. The total amount 20
exchanged was eB,OlbOOO, aB shown ON page ~ In
the lnclOsed report. No Interest WAS, however
agreed upon or paid for this exchange, and In
latter part Of October 1885, reexChange OF the
whole sum was made.
During the present administration no gold has
been borrowed by the treasury department from
the New York banks or elsewhere, and the ease
referred tO IN the only Instance within the time
named when any such transaction has occurred.
Very truly yours, W. WINDOW.
Not being satisfied with this, a further
letter Of inquiry was written Senator Nc
Pherson, which is given in full:
GENTLEMEN;-I have the honor 10 acknOwl
edge the receipt Of your letter OF the 3ist ult.,
with copy Ofa letter OF the honorable secretary
VI treasury, both OF which refer 10 remark
made by me during the delivery Of the speech OF
Senator Teller ON the 18th Of May
IN reply 4 Utk bO hhy UIltiIy bnNL lily ftlllhFkh
were not reported correctly IN the Record. In
stead OF using the words ''in the past two years"
used the word sew" instead OF two" SO as 10
Say 'in the past few years" which 10 seems WAS
not distinctly heard by the repOrter-a mistake
likely TO occur, as you will readily perceive.
/ knew Of the arrangement with the associated
banks OF New York shortly after lt was made
and, AZ understand, II was for 9l0,OO0,00O, and
until the receipt Of your letter had not been In
formed that tile fun amount had not been eX-
changed.
! had no intention Of conveying the impression
that this exchange was made under the present
administration, or any administration within two
years, which the Record apparently makes me
say, but which Is "A mistake Of the reporter
Yours very truly j. X. MCpulERsON
Senator MCPhersons communication
was still less satisfactory, and a letter was
addressed TO Senator Teller on the same
ect,which elected the following reply:
DEAR SIR;--I am in receipt Of yours OF the
18th Instant, and In reply would say that know
Of no loan except the one mentioned by me In my
speech and That was fraud on the public
Yours truly, II. NJ TELLER
Having exhausted the sources from
which the proper information could have
been obtained, and receiving nothing
definite, il became necessary 10 resort to
the report mentioned by the secretary Of
the treasury, and draw such deductions
as may seem reasonable The facts sur
rounding this dark and unlawful trans
action are fully explained in the follow.
ing, sent by Secretary Manning to the
House OF Representatives in response to
resolution Of inquiry;
TREASURY OF THE UNITED STATES,
WASHINGTON, January y, l88G.
SIR:--I am In receipt, by reference, Of the let
ter Of -, requesting copies Of correspondence
In regard 20 the exchange OF gold or silver coin
with the banks OF New York last summer: OF the
certificates issued I'm the transaction, and a brief
statement Of the character Of funds In which the
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