The morning call. [volume] (San Francisco [Calif.]) 1878-1895, 1893-02-12
is NOT DISTURBED.
Fosters View of the Gold
Drain.
HE WILL ISSUE NO BONDS.
But Just the Same, Sherman Has
Moved in the Senate for
Bond Issue.
HE WILL ISSUE NO BONDS.
Special to THE MORNING CALL.

WASHINGTON, Feb. ia prominent
treasury official, who is thoroughly con-
versant with the financial administration
of that department, said to THE CALL cor
respondent to-day that the report that the
Government had decided to issue bonds to
replensh Its stock of gold probably origi-
mated from the efforts now being made by
the department with the assistance of
number of banks. to keep the legal tender
reserve of 100000 900 intact
AS be explained the situation, q number
of the largest banks and those holding the
greatest amount of specie had decided to
turn part of their gold reserve over to the
Treasury Department in exchange for legal
tender notes, which are equally good for
reserve purposes. The movement origi-
mated with the banks and Secretary Foster
was not advised of IL until II was well under
way. The first step was taken last week,
when three leading New York banks offered
the Assistant Treasurer in that city $1,000. 900
in gold in exchange for egsl-tender notes.
The offer was accepted with promptness,
and since then the movement has spread,
owing principally to the efforts of those
who stated 1t and to the cooperative ac-
tiOn of the United States Treasurer, who is
using every legitimate offer to increase the
supply of legal-teuder notes for use in these
transactions. The principal portion OF the
notes now being redeemed by the depart
ment are legal tenders. and preference is
given to that form Of currency In the re-
demption division.
All sorts of Government issues. including
coin certificates, national bank notes and
silver certificates in various stages of mu-
tilation and DETACHMENT. have reached the
treasury in large amounts tor redemption
during the past month. Special attention.
however, has been directed TO the legal
tender notes, and most of the money re-
deemed has been OF that character. The
reason that nearly all the money lately put
in circulation has been in legal-tender
notes is In order that they may
be utilized by the Government in
obtaining gold from the banks. and the
argument of the bank officials who have
committed themselves 10 this policy is that
legal tender notes a:e as good for purposes
Of reserve as the gold they part with, and
that for all practical purposes they would
as soon hold an obligation Of the Govern
meBt as coin from its mint. Ii for any
special reason they should require gold
they argue that the Government Is pledged
to give to them upon the presentation OF
the notes, and they have not the slightest
doubt Of It's ability 10 fulfill allits contracts.
In some way or another the capitalists of
Wall street have acquired the notion that
when the so-called free gold' in the Treas
ury is reduced tc a point near Sl00,000000.
the legal tender reserve basis. crisis is
inevitable. The fact seems to be overlooked
that this amount is held specially for the
redemption of legal-tender notes. and that
large part of the gold exported recently has
been obtained upon presentation OF these
nOtes
Secretary Foster said to THE CALL CORE
spondent that he was not apprehensiye over
the situation and was confident of the ability
Of the Treasury Departmental withstand all
attacks on its gold balance. He admitted
frankly that he was doing all in his power
to keep the legal-tender reserve Of S100 000.-
600 intact, but said that no new or extreme
measures had been resorted to- He had
not. he said, issued any new bonds. and hal
no present purpose of doing SO.