Evening star. [volume] (Washington, D.C.) 1854-1972, 1894-11-12
1t is Expected a Call Will Be Shortly
Made.
SECY CARLISLE Sees THE NECESSITY
The Movement, However, Orig
mated With the President.
LO w GOLD RE s e r V E

Now that the secret Is out, 1t Is admitted
| that the administration has practically de-
| termined upon another issue of bonds at
some time not yet definitely fixed upon, be-
| fore, however, the meeting of Congress
| Secretary Carlisle's statement on Saturday
was that no action of that kind would be
taken Immediately, and that statement has
been substantiated to date. What he evil
| IDENTIFY meant to indicate was that proposals
| for the purchase of the bonds would not be
| invited for two or three days at least. He
| is disposed to hold off long possible,
but has finally reached the conclusion that
the condition of the national exchequer will
| not justify much more delay. 1t was his
| desire to submit the question to Congress
| for settlement, but his recent conferences
with the President have convinced him, so
| it is said, that there is no prospect of relief
| from that source. The President has been
| in correspondence with New York bankers
| on the subject, and has been assured Of
| their assistance in floating the loan. He
| had full conference with Secretary Car
| Isle at Woodiey saturday evening, and 1t
| was agreed that it was impolitic to delay
| action until the meeting of Congress.
The Cail Expected I'm II Few Days.
There are indications that a circular call
| ing for proposals will be issued by Secre-
| tary Carlisle within the next few days, and
| before the end of the present week, in order
| to get returns by the middle of December,
as it is customary to give months notice
| of desire to sell bonds. For some time
| past the conviction has been growing upon
| the President that issue of another
| $5OO0O,OOO would soon be necessary, and on
| his return from Buzzard's bay he expressed
| to the members of his cabinet his belief
that the issue could not be long deiayed and
| that the sooner it was made the better. He
| saw the treasury receipts constantly grow
| ing less, with no immediate prospects OF any
| favorable change. Already the gold re-
| serve had reached a point A.OU0,0Oo below
| the lowest point touched previous to the
| last issue, with the probabilities strongly
| in favor of still further and larger with
| drawals for export as soon as the usual
| spring outflow sets in. For the last several
| years the spring withdrawals for export
| have ranged in amount from $4,000, 900 to
| $jOOOOOOO and even more, and 1t was not
good business judgment, in the opinion of
| the President, to wait until the gold reserve
| was in fac: wiped out before measures
should be taken TO replenish it, Secretary
Carlisle, II IS understood, took more hope
| ful view of the situation. He argued that
| the receipts from internal revenue and Gus
toms lnGSL or necessity, soon SHOW a mark
| ell increase, but he, too, mas finally con-
cluded that the outlook does not warrant
| any further delay.
| The Proposed Issue.
The proposed issue will be similar in char
| acter to that made early in the year, name
| ly, SJO,OO0,OOO Of per cent bonds .
| per cent basis, running ten years. Authori-
| ty was given the Secretary OF the Treasury
| to Issue per cent bonds by the act of Con-
gress of January Ii, 1919. In that year the
| right was exercised, also in 1879, and then
| not AGAIN until last winter. Congress was
urged ldst winter to authorize a short-term
] bond at low rate Of interest but the GEM
oCrduC majority of that body, whlCn In all
| its actions proved totally incompetent to
| deal with economic and financial legislation,
| refused 20 Srant the Secretary the neces-
| Sars power.
| When Congress refused to relieve the
| financial srinSenCy OF the government by
| authorizing snort-term, low-priced bond,
| the gold reserve was down to SIO,G3l,0i5,
| and the Secretary Immediately called for
| subscriptions to a $JO,UUU,OOO per cent bond
| issue, at an upset price of 1lT.223. After
| considerable delay, caused by the unpopu-
| iarity OF the terms OF the issue, by the Sec
| retaryS refusing to consult the New York
bankers until necessity compelled him to do
| so, and by i fear as to the validity of the
issue, the total amount was subscribed for,
| and the treasury received, including the
premium, $jS,UoO,UOO. Today these bonds
are quoted at 119 and 12O.
The Gold Reserve.
The gold reserve of the treasury Is now
| down at a lower figure than it was when
| the issue was made last January. Gold
exports will begin probably before Christ
mas, and the necessity of some immediate
action by the administration is said to
| have been admitted by the President and
| the majority Of his cabinet.
| The cash balance in the treasury is $1O4,-
| 70J, 4SS; gold reserve, $Ol,Ul5, lOl. The re-
,celpts from ali sources SO lar this month
! amount TO $G,O4O, ,llJ, making the total re-
| ceIpts since july / last Sis, 3,627,5Z9. The
| disbursements during the ten days of the
| present month amount 10 Sl1, I2I 900, and
| since July l to $l4J,O ZI3, leaving deficit
| OF $5,Ood,I IS5 during the last ten days, ana
| SlD,+4O, IA since July l last. AS compared
| with February l. 1874, Wnen the last bond
| issue was made, there is an increase in the
| cash balance of over S2O5OO,OOO. The gold
reserve, however, has decreased about
| S4UUO,OOO.
Although there is a large amount of un-
employed money and the demand for first
class investment security is more active
than usual, it is asserted that there will be
some trouble in floating the proposed loan
with advantage. The sole purpose of the
loan is to replenish the gold balance. A
popular subscription Will hardly accom-
plish that, for the reason that nearly all
the gold outside of the treasury is i'll the
hands of national banks and other financial
institutions. The people hold very little
gold. In order to buy the bonds they would
have to exchange legal tenders for gold and
this gold would have to be obtained from
the subtreasuries. Consequently the gov
ernment would be no better off so far as its
gold stock is concerned than it was before.
1t would have more cash, 1t is true, but the
| increase would not be of the desired kind.
What Would he a Satisfactory Price.
Another important consideration is the
price the government might consider sat
isfactcry for the bor ds. According to the
| treasury actuary, the returns upon per
cent bords at the average price for October
| is ZIG per cent, and from the fours the
| yield is 2642 per cent. 1t is said by some
| financers that the government cannot float
| a new loan on the basis of these figures
| and that such bonds cannot be sold at a
| bette tasis than per cent-that is, 111.223
which was the average price obtained for
| the $50, O,O0O, 900 bolds scld last January. in
| fact it is understood that the moneyed in
stitutCns of New York, which must be
reled en- to make the lean a success, have
| intin ted strongly that they will make no
bids on n higher basis than per cent. 1t
| is not believed that there would be much
| foreign demand for government bonds at
| the necessary low rate of interest.
The probabilities are that the important
details of amount, rate of interest and time
of issue will be considered and finally de-
termiT ed at the meeting of the cabinet to-
morrow.