The herald. [microfilm reel] (Los Angeles [Calif.]) 1893-1900, 1895-03-03
AN ADMINISTRATION VIEW

| taCC. NAT. OuTJtS dTSuiuCnv VIII P'OSss'Ay
be regarded by antagonistic partisans as
special pleading on behalf of the admins
tration, but his position and knowledge OF
his subject must compel attention even IL
his deductions do not meet with ap-
proval by the politicians and financiers.
The Government found itself in pecu-
liar position, said Mr.. Curtis in his prem
ises-a position that might be likened to
that OF bank on the verge OF run with
out sufficient funds to meet it.
At various times during the last two
years the Government has been compelled
to issue bonds to replenish its gold re-
serve, and, as the Government was deal
! ing with a community more or less ex-
! cited and paricly, foreigners became dis
! trustiul regarding American securities,
p, and sent large quantities of them to this
country for sale or redemption.
! An effort was made to relieve the situa-
ton in November, and the gold received
for the bonds then sold was expected to re-
main in the Treasury, but the Govern
ment's confidence was misplaced.
After watching the large Withdrawals
of gold until January 18th, it was con-
sidered that the people Of the United
States felt that our gold payments could
not be sustained without Congressional
help, and that could not be obtained.
From early in year every effort had
been made TO gather gold coin and collect
it at New York and Boston, the prin-
cipal points OF Withdrawals for shipme MT
abroad but on the 81 OF February all the
gold coin which could be collected with
safety was collected AT these points. On
Saturday, the second day of February,
the total amount of free gold coin in the
Sub Treasury at New York amounted to
50, 100, 33i. 50, and the only posi- BILE way of
adding to that was from the mints,
whose total coinage at San Francisco,
New Orleans and Philadelphia was only
about $500, 600 per diem. The total amount
of gold coin owned by the United States
Government was exceeded by the demand
certificates outstanding against it, and
the Government was practically borrow
ing gold coin from the owners of these
demand certificates, and substituting gold
bullion in its place, i'll order to carry on
specie payments in gold. The reserve on
that day of coin and bullion over out
standing certificates was $40, 6l2, 432. %.
The Assistant Treasurer at New York
reported to the Treasury Department in
Washington on Wednesday evening, the
30th OF January, that he thought he could
hold on until Saturday, but that the next
day might decide the situation.
1t was a most critical period, for we
could not exchange gold bullion for coin.
The people were frightened and had begun
to hoard gold coin.
The total amount of Withdrawals Of gold
between December 1, 1854, and February
10, 1895, was $780, 7s6, 302, and the exports
OF gold during the same period amounted
to only $3.50. S52, 3S9, showing that about
$43, 600, 900 had been withdrawn for hoard
ing purposes in this country during this
period. In other words, the citizens OF
the United Statce had lost faith in the
ability OF their government to pay gold for
its notes, and run on the Treasury COM
menced. That this gold has not gone into
the banks is shown by the fact that on
December /, 1894, the total amount held
by the banks was sos, 900, 900, and on Feb
ruary 1, 1895, $s3, O00 900, or $13, 00o 900 less
than was held on December l, 1894.
So general was this boarding becoming
that on January 30, 1895, one banking es-
adjustment in New York informed the
treasury that it had $50 requests for gold
in exchange for notes on that day.
The first indications of general with
drawal of gold for the purpose of boarding
in this country were noticed on January
II, 1885. These increased rapidly, culmin
ating on the 25th of January in total with
drawals OF 81, 156, 045 on that day. The
first IN essage OF the President on the ur
gency OF the situation was presented to
Congress on the 25th of January. On that
day over $4,0Oo, 900 were withdrawn. On
the following day, January %, over IS, 0o0,-
900 were withdrawn, and, owing to the
failure Of Congress to act, or apparently
to appreciate the situation, the withdraw
ais rose on the Both OF January to nearly
S. 000,000 On the evening of that day
the negotiations were taken up in New
YORK, and the first publication in the
newspapers that the Government was
about to undertake something appeared,
and on the morning OF the 31st OF January
the Withdrawals dropped to $2 359, 92s.
The gold that was paid for bonds in No
Der was at once drawn out again, and
the Withdrawals might continue indei-
nitely unless some other plan was pur-
sued.
The negotiations at first met with no
success, and it was insisted that the
bonds should be payable in gold as an in
itial condition; but for doing this Con-
gress had given no authority. The nego-
tiations, however, were continued, and a
contract made by which the bonds were
well sold.
When the result of the negotiations was
considered to be doubtful gold withdraw
ais were renewed, and one day went as
high as 5000, 900. When the negotia-
tons were completed and the contract &C
cepted, Withdrawals practically ceased and
no gold was exported.
AS result CT the negotiations the Gov
eminent now holds the market, does not
have tremendous daily Withdrawals, and
all bonds OF the United States have ad-
vanced in value in the market.
1t was currently reported and generally
accepted by the public, that rate of 3 IL
per cent would be obtained. This is equiva-
lent to little over 100 IA. The actual
amount paid by the contractors is 104, =
4946l, or a shade below the rate of 3 3-4
per cent. The difference in the two prices
is about 3-4 or somewhat under So, 000-
o00, out of which is to be paid the ex-
penses of controlling the market exchange,
the difference between London and New
Vnr- hai nor ppOfe or, tho mound or nvor