Middlebury register. (Middlebury, Vt.) 1886-1937, 1895-10-18
rAE SILVER QUESTION.
IContinued from last week'l
IAN Appendix to MIR. Batten's letter. !

Firth, the necessity Oh our S"NVl"-
ment borrowing gold for redemption pur-
poses is entirely due to its not using
silver.
Mr.. Cleveland's administration has al
ready borrowed slG2 5000 in gold.
This was made necessary becaus.. sub
servient to the money power, it has re-
deemed, in gold, greenOacks and treas
urv notes that are redeemable in coin
ii. @. gold or silver and silver ccrtiti-
Gates redeemabe in silver. Had the gov
ernment used its option to redeem in
silver. there would have been no occasion
to borrow gold. So in the future
should it redeem in silver at its option. 1t
would not have to borrow, whilst, If it
continues to redeem in gold. it undoubt-
edlv will. In other words, this bor-
rowing of gold for redemption purpos-
es is abs ,lutely unnecessary.
The last loan of gold made by Mr.. Cleve-
land was of SG2, 100000 for 80 years at
four per cent. on Feb. $. 1893, with
American and foreign bankers. OF this
loan the Hon. l.. + Chittenden. register
of the treasury under President Lincoln,
thus writes:
The time which II government bond
has to run is as great factor in its value
as the rate of interest On the 10Th of
the present June, per cents, maturing
, i'm 1907 sold in Wall street for lll8,
while the Is maturing in 1928, sold for
1921, or II per cent higher. On the Sth
of February, the date of the contract,
the bond market had been depressed
about , per cent. by crude and absurd
bills. which Secretary Carlisle had sent
to Congress. but with that depress-
ion our Is of 1907 were selling at ll04.
We had at that time no long IS with
which to make comparison. But the
difference in value between a long and
short bond is permanent and understood
bv all dealers. 1t was II per cent on
Saturday last, between bond of 1907
and one of 1925. Add thus II per cent.
to ll04, the price of the Is of 1897, and
we have the market value of the bonds
demanded by the foreigners, at l224.
The same bonds on Saturday last sold
for l23 IS There was not an intelligent
Office boy in brokers' office in Wall
street who could not have Informed the
Assistant Secretary of the Treasury that
per cent. gold bonds having thirty
wears to run would sell at auction on the
floor of the Stock Exchange for within
a half per cent. of a premium of twenty
three cents on the dollar.
As wax before the fire, so was tins
Young Assistant Secretary in the hands
of these experienced traders. They
must have satisfied him that none but
themselves could save the Treasury from
bankruptcy. for they made him agree.
ard his superior to ratifY the agreement,
10 sill Sirty-t,ro and h0lf million doil0rS,
in tour per cent. boadS, ,rouh in hc dcpreSS-
ed market of'Hot dug n premium oftcenty-
ttro per cent. on cccry doHor, FOR n premium
of 0nty fOur and II hQif per- cent: which
they knew would sell at above one
hundred and twenty as soon as they
were put on the market.
1t is humliating to write the shameful
story. There was not safer security
in existence. Yet this guardian of the
Treasury was then and there, by our for
eign competitors, traded out of a con-
tract in which there was profit to the
foreigners of almost twelve million dol
lars, before the ink of its signatures was
dry.
Nor was this the largest profit or the
most Objectionable part of the transact
ton. Having the opportunity, the for
eigners demanded and were conceded
bona Wnlcn WouIu remain 10 uTdW US
excessive interest for its full term of
thirty years. The established practice
of the Treasury to reserve the right to
pay after five or ten years, which gave
the opportunity to reduce the rate of
interest or to apply any treasury surplus
in payment. provision which eX-
perience had shown to be of great value
was waived at the bidding of the foreign
ers. In ordinary times, the Secretary
can borrow all the money he wants at
two per cent If the right had been re-
served. he could in any favorable con-
dition the money market have given
holders of these bonds the alternative
of payment or two per cent interest.
The difference between two and four per
cent. interest is therefore an additional
profit of nearly twentv-eght million dol
lars, which only differs from the first
profit in that it is distributed over a
period of thirty years.
Another provision in this contract was
disgraceful to those who consented to it
on the part of the United States. 1t sold
TO foreigners the right to control our
Treasury for three-quarterS of year.
During that time the Secretary agreed TO