The Penn's Grove record., 1895-12-06

uecIrna excepting as II has been tenn
po1erhsy replenlshed by the sale of bonds.
AmonE the causes for this constant and
uniiorh9 shrinkage IN this fund may be
mehlloifd the great falling off Of exports
uhnei operation of the tariff law until
reVena'Ih Iorce, which crippled our en-
mango III commodities with foreign ma
tVns' necessitated to some extent the
pn5nsi % our balances in gold; the I'M
ht1urn. INFUSION OF silver into our cur
TehcS nqu the increasing agitation for its
Iree unl unlimited coinage, which have
cTeatsu apprehension as to our disposition
" upihJ 70 CONTINUE gold payments; the
cohseqtent hoardlng of gold at home, and
ltns saoEpage OIL Investments of foreign cap
itai, a wen as the return of our securities
hireu sold abroad; and the high rate of
foreia 4~exchange, which induced the ship
ment our gold to be drawn against, as
a mattVr of speculation.
IN consequence of these conditions. the
gold reserve on the LIST day of February,
" was reduced TO $65, 438,377, having
lost more than S31,0O0,000 during the
preceding nine months, or since April. 1893.
Its fcplenishment being necessary. and no
other npanner of accomplishing it being
posspief resort was had to the issue and
sale OF bonds, provided for by the esump.
tlon act of 1875.
Fifty millions of the bonds were sold,
yleloinR SoS,633,29a.11, which was added
TO the reserve fund of gold then on hand.
AS a re5uit OF this operation this reserve,
which lad suffered constant and large
withdra walls in the meantime, stood on the
9th day of March. 1894, at the sum of
y1O1, 44f,S02. Its depletion was, however,
immediYtely thereafter so accelerated that
on the ~ day of June, 1894, it had fallen
to $o4,T3,O21, thus losing by Withdrawals
more tffn $42,00O,00 in five months and
dropping slightly below its situation when
the sal9 of S~5O.O00,000 in bonds was eff
fected ffr its replenishment. This depressed
c0ndltiop grew worse. and on the 21th day
of Noy4mber. 1894, our gold reserve being
reducedfto 57,669, 701, it became necessary
again u strengthen it. This was done by
anotheri sale of bonds amounting to $780,
UOO,DpO{ from which there was realized
$5S,53S500. with which the fund was in
creaseH $l11,l42O2l on the 4th day of
Decent Ter, 1894.
AgaifV disappointment waited the anxious
hope fot relief. There was not even a hull
In the yxasperating Withdrawals of gold.
On thet contrary, they grew larger and
more persistent than ever. Between the
4th dayH of December. 1891, and early in
February, 1895, a period of scarcely more
than TWO months after the second rein
forcem9nt of our gold reserve by the sale
of bonds, it had lost by such Withdrawals
more than $69,000,000 and had fallen to
$41,340,IS1. Nearly $43, 900 had been
WlthuIdWH WltnlH the month lmmeolately
preceding this situation.
In anticipation of impending trouble, 1
had on the 18th day Of January, 1895, adj
dressed a communication to. the Congress
fully setting forth our difficulties and dan
gerous position, and earnestly recommend
ing that authority be given the Secretary
of the Treasury TO issue bonds gearing a
low rate of interest, payable by their
terms in gold, for the purpose of main
tanning q Snt1pipDt pOl1 rngarua and algn
for the redemption and cancellation of
outstanding United States notes and the
Treasury notes issued for the purchase of
silver under the law of 1890. This recon-
mendation did not, however. meet with leg
%islatiye approval. G r
The Situation was Critical.
In February, 1895, therefore, the situa-
ton was exceedingly critical. With a re-
serve p~erilously low and a refusal of Con-
gressiohal aid, everything indicated that
the end of gold payments by the govern
ment was imminent. The results of prior
bond issues had been exceedingly unsatis-
factory, and the large Withdrawals of
gold immediately succeeding their public
sale in open market gave rise to a reason
able suspicion that a large part of the gold
paid into the Treasury upon such sales
was promptly drawn out again by the pre-
sentation of United States notes or Treas
ury notes and found its way to the hands
of those who had only temporarily parted
with it In the purchase of bonds.
In this emergency and in view of Its
surrounding perplexities, it became entirely
apparent to those upon whom the struggle
for safety was devolved not only that our
gold reserve must for the third time in less
than thirteen months be restored by an
other issue and sale of bonds bearing a
high rate of interest and badly suited to
the purpose, but that n plan must be adopt
ed for their disposition promising better re-
suits than those realized on previous sales.
An agreement was therefore made with
a number of fnanciers and bankers where
by it was stipulated that bonds described
in the resumption act of 1875, payable in
coin thirty years after date, bearing in
terest at the rate of four per centum per
annum, and amounting to about $62,OOO,-
000, should be exchanged for gold, receiva-
Bile by weight, amounting to a little more
than $65, 100000.
This gold was to be delivered in such
instruments as would complete its delivery
within about six months from the date of
the contract, and at least one-half of the
amount was to be furnished from abroad
1t was also agreed by those supplying this
gold that during the continuance Of the
contract they would by every means in
their power protect the government against
gold Withdrawals. The contract also pro-
vided that if Congress would authorize
their issue, bonds payable by their terms
in gold and bearing interest at the rate of
three per cent. per annum might within ten
days be substituted at, par for the four
per cent. bonds, described in the agree
ment.
On the day this contract was made its
terms were communicated to Congress by
a special executive message, in which It
was stated that more than Sl6,O0O,OO0
would be saved to the government II gold
bonds bearing three per cent. interest were
authorized to be substituted for those
mentioned in the contract.
The Congress, having declined to grant
the necessary authority to secure this saw
ing, the contract, unmodiied, was carried
out, resulting in a gold reserve amounting
to $1O7.571, 230 on the 9Th day of July,
1895. The performance of this contract
not only restored the reserve, but checked
for a time the Withdrawals Of gold, and
brought on a period of restored confidence
and such peace and quiet in business cir
| Giles as were of the greatest possible value
to every Interest that affects our people.
| / have never had the slightest misgiving
concerning the wisdom or propriety Of this
| arrangement, and am quite willing to
| answer for nv full share of the RESPONSE