Iowa state bystander. [volume] (Des Moines, Iowa) 1894-1916, 1895-12-06

| shipment Of our gold to be drawn
against as matter of specuiaatlon.
| In consequence OF these eonult,o ~ ~.
gold reserve on the first day or Fepfu-
ary. 1894. was reduced to $65, SS,oU, nay
ins lost more than $31,O0o,0o0 during inc
| precedirg nine months, or since April
/ 1899 It's replenishment being necessary,
| and no other manner of accomplishing ~
being possible, resort was had 70 ene 10
! sue and sale of bonds proVlded lof Wy
| the resumption act of 1873.
Raids on the Gold Reserve.
/ In February, 1895, the situation was
exceedingly critical. with reserve
perilously low and refusal or congres-
sional aid, everything indicated that the
/ end of gold payments by the govern
/ ment was imminent. The result OF prior
| bond issues had been exceedingly unsatc I
| isfactory, and the large Withdrawals OF
| gold Immediately succeeding thelr pun
lie sale in open market gave rise TO q
/ reasonable suspicion that large part
of the gold paid into the treasury upon
/ such sales was promptly drawn OUT
again by the presentation OF United
/ States notes or treasury notes ana louna
it's way to the hands or those VINO haa
only temporarily partea with !. AZ wy
purchase of bonds.
In this emergency and in view OF It's
surrounding perpleNities, 1t became en-
tirely apparent to those upon Whom tnf
struggle for safety was deVolVed, not
only that our gold reserve must, Tor
the third time in less than thltteen
months be restored by another issue
and sale of bonds bearing high rate
of interest, and badly suited to the pur,
pose; but that a plan must be adopted
for their disposition promising better re-
sults than those realized on previous
sales. An agreement was therefore,
made with a number of tinanciefs ana
bankers whereby it was stipulated that
bonds described in the resumption act
of 1875, payable in coin thirty years
after their date. bearing interest at the
rate of 4 per cent. per annuln, ana
amounting to about $62,ooo,oou, shouia
be exchanged for gold, receivable Dy
weight. amounting to a little more than
SCI. OGO, 600 This gold was to be delivered
in such installments as would complete
its delivery within about Sin months
from the date of the contract, ana az
least one-half of the amount was to be
furnished from abroad 1t was aiSo
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 Bond Contract.
The contract also provided that If congress
would authorize their issue, bonds payable by
their terms in gold and bearing interest at
in ten DAYS be substituted at par for the per
cent bonds described in the agreement. On
the day this contract was made It's terms were
communicated to congress by special eNecu-
tive message. in which it was stated that more
than SIC 0OO 600 would be saved by the govern
mont If gold bonds bearing per cent inter-
est were authorized to be substituted Tor
: those mentioned in the contract. inc con-
eress having declined to grant the necessary
t authority to secure this saving, the contract
rinl NttrF n
. gold reserve amounting to $i0I 81 $50 on the
t eighth day of July 1895. The performance oil
this contract not only restored the reserve, pu.
checked for time the Withdrawals OF solu
0 and brought on a period of restored confidence
c and such peace and quiet in business circle.
t as wore of the greatest possible value &c
: every interest that affects our people | have
q never had the slightest misgiving concerning
9 the wisdom or propriety OF this arrangement
d and am quite willing 10 answer for my fui
Q share of responsibility for it's promotion.
d believe 1t averted disaster the imminence
S which was fortunately not at the time gen
n orally understood by our people.
;, acou,rea Cold Also Wit drawn.
! Though the contract mentioned stayed for
It fine the tide of gold withdrawal, its good re
e suits could not be permanent. Recent Win
II drawals have reduced the reserve from Sloi,
Is 557. $50 on the eighth day OF July, 1892 =
l. s79 333 g6G. How long il will remain lars
j. enough to render its increase unnecessary
,e only matter of conjecture, though quite lars
IT Withdrawals for shipment in the iihtheu'a.
II future are predicted in wel-informed guar
,e tors About SIS 100000 has been withdraw
II the month OF November. The foregoing state
N mont of events and conditions develops III
fact that after increasing our interest peirih
bonded Indebtedness more than Si5z oDV'ooo
save our gold reserve, we are nearly Wte,e "
st started having now in such reserve $40 90, %
ID as against S65 1887 in February, 1854 WIZ
T. the first bonds were issued
Of Though the amount of gold ara"
Mt from the treasury appears TO De vel
NJ large as gathered from the Iacts an
g figures herein presented, IT actuaiS we
~ much larger, considerable sums ma,
{. ing been acquired by the treasury WITT
- in the several periods stated Wlthou
~ the issue Of bonds. In other words, IN
~ government has paid IN gold more tina
nine-tenths of it's United States note
j. and still owes them all. 1t has pala
D. gold about one-half of its notes give
o. for silver purchases without Xtlnsuisi
y. ing by such payment one dollar OF thes
to notes.
lie When added to all this we are remint
It ed that TO carry on this astoundin
~ financial scheme the government hs
be incurred bonded Indebtedness OF $50
a. 900 ia establishing a gold reserV
&c and or Sl62, 3l5.4 400 in efforts TO maintal
10 it! that the annual interest charge
:. SGcH D0nQe6 1nQeDleuiiSSS is liioi tiio
~ $11 900 900; that a continuance in OF
present course may result in turtn'
- bond issues, and that we have suftere
90 oS or are threatened with all this for II
80 sake Of supplying gold for foreign shi
a. merit or facilitating its boarding
= home, a Situation Is exhibited WHO
certainly ought to arrest attention az
provoke immediate legislative relief.
am convinced the only thorough al
an practical remedy for our troubles
" found in the retirement and CANCEL
'er ton Of our United States notes, cor
'us monty called greenbacks, and the on
for standing treasury notes issued by G
ed government in payment of silver pu
le- chases under the act Of 1890.
re- FOR National Bank Notes.
ba believe this could be quite readily q
"a conplished by the exchange of the
notes for United States bonds of small
- well as large denominations, bealing
80 low rate of interest They should be Ion
term bonds, thus increasing their dCsil
80 Dility as INVESTMENTS, and because M
io payment could be well postponed 10
~ -; period far removed from present financ
49, burdens and perplexties, when with
icy creased prosperity and resources III
- would be more easily met.
% 10 further insure the cancellation
the these notes and also provide a Hay
I'VE which gold may be added 70 our curren
re- In lieu of them, a feature in the pl
thc should be an authority given to the Secl
~ tary of the treasury to dispose OF ,
&C., bonds abroad for gold if necessary
ny complete the contemplated redenDu
~ and cancellation, permitting him to I
70 the nroceeds of such bonds TO take