The free press., 1895-12-19

1t thus resulted that the treasury notes
issued in payment of silver purchases un.
as gold obligations, ut the option Of the
holder. These notes on the fist
day Of November, 1898, when the
law compelling the month pug
purchase of silver was repealed amounted
to more than $l55U00,000. The notes Of
this description now outstanding added
to the United States notes still undimin-
ished by redemption or cancellation con-
stitute volume of gold obligations
amounting to nearly $5O000o,000. These
obligations are the instruments which,
ever since we have had a gold reserve.
have been used to deplete it.
This reserve, as has been stated, had
fallen in April, 1893, to 1911 $3.50. 1t has
from that time to the present, with very
few and unimportant upward movements,
steadily decreased, except as it has been
temporarily replenished by the sale OF
bonds.
In consequence of these conditions the
gold reserve on the first day of February
1894. twas reduced to S65, ,433, ,377, having
lost more than $3l ,050 900 during the pre-
cedng nine months or since April, 1898.
It's replenishment being necessary and no
other manner Of accomplishing it being
possible, resort was had to the issue and
sale of bonds, provided for by the resump-
ton act of 1878. Fifty millions of these
bonds were sold yielding $5S, 733, 10
which was added to the reserve fund of
gold then on hand. AS a result Of this OPP
Grafton this reserve which had suffered
constant and large Withdrawals in the
meantime, stoodIon the sixth day March,
1894. at the sum of of $107, ASS, ,802. It's de-
pletion was, however, immediately there
after so accelerated that on the 3Oth dAy
of June 1894, it had fallen to $64 ,S73 025r
thus losing by Withdrawals more than
S42, 100000 in five months and dropping
a. ott % la
of $50 000, 900 in bonds, was effected for its
replenishment.
This depressed condition grew worse,
and on the oath day of November 1894, our
gold reserve being reduced to $57 ,669, 10l,
it became necessary 10 again strengthen it.
This was done by another sale OF bonds
amounting to $50.000,0O0, from which
there was realized S5S, ,538, 500, with which
the fund was increased to Sill, 142, ,O21. on
the 4th day of December 1894, again dis
appointment awaited the anxious hope for
relief. Between Dec. 1st 1894, and early
in Feb. 1895, period OF scarcely more
than two months after the second rein
forcement of our gold reserve by the sale
of bonds it had lost by such Withdrawals
more than $50 000, 600 and had fallen to
Sal $40, 1871. Nearly $43,O00,O0o had been
withdrawn within the month Immediately
preceding this situation.
In anticipation of impending trouble,
nication to the congress, fully setting
forth our difficulties and dangerous posi-
ton, and earnestly recommending that
authority be given the secretary OF the
treasury to issue bonds bearing low rate
of interest, payable by their terms in gold,
for the purpose OF maintaining suncient
gold reserve and also for the redemption
and cancellation of outstanding United
States notes end the treasury notes issued
for the purchase of silver under the law or
1890. This recommendation did not, how
| ever, meet with the approval OF congress.
In February, 1895, therefore, the situa-
| ton was exceedingly critical with ire
| serve perilously low and refusal OF con-
| pressional aid everything ind icated that
| the end of gold payments by the govern
| mens was imminent. The results OF prior
| bond issues had been exceedingly unsatis-
| factory, and the large Withdrawals OF goid
Immediately succeeding their puphc SAFE
| in open market gave rise to reasonable
suspicion that large part OF the goio
| Maid into the treasury upon such saies
| was nromptly drawn out again by tne
nresentation of United States notes or
treasury notes and found its way to the
hands Of those who had only temporarily
| parted with it in the purchase OF oonas.
| An agreement was therefore made with
n numher of finauciers and bankers where
hv IL was stipulated that bonds described
| IN tne resumption act of 1875, payable In
coin thirty wears after their date, bearing
| interest at the rate OF 4 per cent. per an
mum. and amounting to about s62, ,ooV,Voo
| should be exchanged for go'd, receivaDle
by weight amounting 10 '''''o lo'-
| than So, 900, 900.
| This gold was to be delivered in such In
| stallments as would complete us delivery
| within about six months from the uate oi
the contract. and at least one hall OF the
amount was to be furnished from ABROAD
II was also agreed by those supplying tnis
gold that during the continuance y. ens
In their power to protect the government
/ against gold Withdrawals
| On the day that contract was mace ~
| terms were communicated TO congress "
| special executive message. III wnicn =
was stated that more than sixteen inliliou'
of dollars would be saved TO the govern
| ment il gold bonds bearing three per Sl't
| interest were authorized to be subsf'1n y.
| for those mentioned in the contrac' ~
| conaress having declined to graf M 90
| cesSorv authority to secure this SAVING
| the contract. unmodified was sarfirt ous
| resulting in gold reserve amouilu"T
| flO7, ,57l $50 on the sth day OF JuI!
| restored the reserve, but cheeeSed u
| lime the Withdrawals of gold and bron
| nm n period of restored confidence a}v 81
| peace and quiet in business circ'ss ~
| of the greatest possible value 10 every
terest that affected our peop.5 I hh Z
never had the slightest misgiv na as u
/ the wisdom or propriety OF tAe Arrange
ment and am quite willing to ans ger 70
( INV. full share of responsibility for .ts pre-
/ rrlb6n. believe it avertei' a'hs,ster IN
ia emence of which was, fo'tihateiy no
"a zoe time generrlly understood by oa
Though the contract mentioned stage
for time the tide of gold withdrawal, It
GOOD results could not be permanent. III
cent Withdrawals have reduced the r.
serve from SlO7, ,57l, ,230 on July 8. 1898, I
SO 333. 966 ncw long it will remain larR
enouph to render its increase unnecesar
is only matter of conjecture. thoug
quite large Withdrawals from shipmel
in the immediate future are predicted
well informed quarters. About $l600O,0
has been withdrawn during the month
| November.
The foregoing statement of events M
conditions develops the fact that after
| creasing our interest bearing bonded
debtedness more than Sl62, ,00O, coo to sa
| our gold reserve, we ara nearly where v
started, having now in such reserve 81
| 1888, ,9e6, as against sos, ABS, ,377 in Februar
1894. when the first bonds were issued