Rock Island Argus. (Rock Island, Ill.) 1893-1920, 1895-12-04
WHAT CAUSED THE sHRINKAGE.
Several Reasons Given That Brought the
Reserve Down to s85, i38,3s6.

Among the fuses for this constant and uni
form sLrlnkase III tn fund may tie mentioned
the great filiiug off of exports under the oper-
alton of the tariff law until recently in force.
which crippled our exchange of commodities,
with foreign nations and necessitated TO some
in gold: the unnatural infusion of
silver into ouc currency and the
increasing agitation for its free and unlimited
coinage. which have created apprehension as
to our disposition or ability to continue gold
payment: the consequent boarding of gold az
egn capital. Us wen as the return OF our Sc
curities already sold abroad: and the high rate
OF foreign exchange which induced the ship
lnent of our gold to be drawn against, as a
matter of speculation.
In consequence of these conditions the gold
reserve ON the LIST day of February, 1891. was
S5lh1,'1l during the preceding nine months,
or since April, ls.tI
two first bond sales, but says that in both
cases disa lpointment was the result. the re-
serve after botn sales becoming depleted in the
same old way until in February 1895, the re-
serve had fallen in 81 $40, ISL He also tells of
his application TO congress for authority to
issue low interest bond. which met with
REFUSAL
End of Gold Payments Imminent.
In February lS.5. therefore, the situation
was exceedingly critical. With a reserve Iscril-
ousiy low and a re. u,al of congressional a,d
everything indicated that the end of gold pay
men. was imminent. Fac results OF prior bond
Issue, had been excecdi gly unsatisfactory anu
ly succeeded their publ.c sale IN open market
part of the roli paid =, the treasury upon
such sales promptly drawn ont again b !,
the pres mt ,tion Of tnitsd States notes or
treasury notes and found it, way9D the hands
of thoss who lad ly CARLY parted
with 1t i'll the purchase of bonus. In
this emergency, and IN view of its surrounding
perplexities. 1t becam, entirely apparent to
those u on whom the struggle for safety was
devoived not only that our gold reserve must.
for the third time in less than thirteen month,
be restored by another issue ana sale of bonds
bearing high rate of interest and badly suite
to the purpose. but that a pl II mus be adopted
for their disposition promising better results
than those realized GA previous sales.
The Celebrated lsOnsi syndicate.
An agreement was therefore made with a
number OF ninclers and bankers whereby i:
was stipulated that Londs described IN the re-
$ .mptlon act % 49, payable in coin thirty
rate OF iour per cent per anngm and amount
ing TO abodt S'l.,ot''S. should Ire exchan Ell for
gold. receivable 10y weight, amounting to a
little more than So bpt.t.h.
This gold was to be delivered in such install
ments a, would complete its delivery within
about six month from the date of the contract,
ana at least one half of the amount was
to BE- furnished from abroad. II
was also agreed by those supplying
contract they would by every means in their
power protect the government against gold
Withdrawals. The contract also provided that
1t congress would authorize their issue. bonds
payable 10y their terms in gold and bearing in
tcrp-t at ia" rate of ) per cent per annum
might within ten DAYS lie substituted at par
for the per cent. bombs described i'll the agree
mcnt.
On the day this contract was made its terms
we've communicated t. congress by Il special
executive message in which il was stated that
more than Sl6SsslV1 would he saved To the
government If gold bonds bearing 5
per cent. interest authorized to
he substituted for those mentioned in
the contract. 1ne ccngres, having declined to
grant the necessary authority to secure this
saving. the contract. unmodiled. was carried
out. resll ing in gold reserve amounting TO
elO.. I'D the 18th ia. of July. lSi,. The
performance OF TINS contract not only restored
The reserve. but checked for Il time the with
drawals Of gold and brought on a period OF
stored confluence and such peace and qJIie. in
business circles a. were II the greatest possible
value. to every interest tina: affects our people.
! have never had IN" slightest mIsgiving con
cerpin. the wisdom ar pruprety of this ar
raugemeut and ain quite Wiling 20 answer Tor
nay tuil share OF responsibility for Its promo
ton
Withdrawals of Gold Begin Again.
Though the contract mentioned stayed for a
tiIr. the tide OF gold withdrawal it, good RE-
suits could Eos IL permanent. Recent with
dravals have reduced the reserve from Sl0.,-
IS. I'D on the sfh day OF July 1875. to S.s.5Si.-
e6i. How long viii il remain large enough Ia
render its Increase unnecessary Is only a mat
ter of conjecture. though quite large with
drlwals for shipment in the immediate future
arc Predicted IN veil-iE!Orned quarters.
About S.ouE.tp was withdrawn during the
month ct November.
The foregoing statement IT events and con
. ;,u., - e,c-S tEe .Sct IT,. .!.e: -cc.e2Siar