The record-union., 1893-06-24
STANFORD SAVED THE SITUATION.
The Last Act of His Life One of Service
to the People of California.
IF11711 I t0I7 I7OI77OO O9V'
no faNT. ,,-oalyc acrr o,>,D,ob


Some few weeks ago apprehension of a
financial panic in New \ Iork called for
the gold reserves of the banks of San
Francisco to large extent. AS the con-
dltlon here was one of perfect security,
the banks of this city loaned TO the bank
ers OF New York sums of money found to
be in excess of a proper bank and cash
reserve, or, to state this in another form,
they left with the bankers in New York
! the credit balances which they could
have drawn, and also loaned to them the
surplus found to exist above their re-
quirements here. 1t should be under
stood that the reserve in San Francisco is
40 per cent. of the deposits, while i'll New
\ ork 1t IS only % per cent. This is
prec&ution known only to San Francisco,
and 10 it has been due the superior credit
and solYency of the banks of this city.
AS soon, however, as the panic had
subsidized in New York it appeared to be
desirable that the money due from that
city to bankers here should be returned.
| There was no means of it's return except
to send the actual coin by express. There
was no available exchange by which
money could be transferred through the
ordinary methods of bank exchange.
There was no market for exchange at the
heavy discount required.
In this emergency and anticipating
some disturbance in financial circles, the
bankers appealed to the Secretary OF the
Treasury of the United States for the
privilege OF transferring sums of money
Dy deposits of gold certificates, convert
ible currency or gold. This privilege was
refused. 1t seemed to be a reasonable re-
quest because the Sub-treasury OF the
| L United States in this city hold large sums
of money, and if gold could be deposited
III New York and transferred here by
| Geographic order from the Sub-treasurer
IN New ork to the Sub-treasurer in San
| francisco the money would be- imme-
! dlately available here by drawing it from
| the Sub-treasury and the Government
| would have the benefit Of the exchange
without the expense OF shipment OF coin.
In this situation the Secretary of the
! Treasury refused to make any transfer
| by order upon the Sub-Treasurer in San
francisco except for gold certificates.
and those not being obtainable it virtu-
ally prevented the exchange from being
made. The bankers here desired to have
deposits of gold or greenbacks as well
as gold certificates made in the
| Sub-Ireasury in New York, the transfer
| being made payable on telegraphic order
in San francisco, thus avoiding the shin
ment OF coin and making the money in
the vaults of the United States Sub
/ Treasury Immediately available for COM
merclal uses. The Secretary of the
Treasury refused to accommodate in the
manner herein set forth, Notwithstanding
the appeals of the bankers of the city.
In this state Of affairs Captain y. T.
/ Smith, the Treasurer of the Southern Pa
| citlc Company, presented the case to Sen
ator Stanford. The vast and varied busi-
| ness experience of the late Senator Stan
| ford enabled him to comprehend the
! whole situation, and the reasonableness
as we'll as importance of the request made
! by the bankers. He Immediately tele-
! graphed to Washington as follows:
MEMO PARK, Cal, June 20, 1898,
Hon. GroUer Cleceld]td, President OF the
| United States, Washington, d. c.. have been
| requested by bankers here to ask that tbey
! may be allowed to deposit gold in New York
with the Suo-1reasury, ana draw an equal
| amount from the Sub-rreasury here thus
saving to the Government the cost of trans
! pOrtatiOn between New York and San Fran
cisco. The disturbance of credit makes the
/ money we have here in circulation insufici-
ent for the transaction of the business of the
! State. LELAND STANFORD.
! AS the result of this communication the
| President of theUnited States, out of re-
! spect for the request of Senator Stanford.
! instructed the Secretary of the Treasury
| to receive at the Sub-Treasury at New
York, gold, convertible currency or gold
certificates, and to permit the payment
| in like amounts at the Sub-Treasurv of
the United States in San Francisco. Thus
all the money which the New York banks
| had borrowed from the city of San Fran
! CISCO DSCdul6 payable 10 the banks IN this
| city by immediate transfer, and thus for
| tifyiug the banks here against any possi-
BILE contingency of any run that can be
made upon them.
The last letter of a business nature
writted by the late Senator was addressed
to Captain \. 7. Smith, Treasurer of the
southern Pacific Company, and is dated
June 20th. 1t was dictated to his Secretary
after dinner on the day of his death. In
this letter to Captain Smith he acknowl-
edges receipt of his note, says that he has
noted its contents and that he has tele-
graphed to President Cleveland, and in
the letter to Captain Smith the dispatch
is set forth fully.
On the last day of Senator Stanford $
life, therefore, he used his great office in
the most signal manner for the benefit OF
the people of California. This was practi-
cally the last act of the brave, useful and
busy life of the late Senator. Even be-
fore his interment the people of this city
and State are in the enjoyment of this
wise and judicious act. The bankers
throughout the State are congratulating
! themselves and the public upon the effect
of Senator Stanford's prompt and wise
action, and freely acknowledge that to
this action is due the strong position in
which the banks Of this city find them
selves to-day.