The times. (Owosso, Mich.) 1882-1897, 1895-12-06

and the increasing agitation Tor It's free
apprehension as to our disposition or abil-
ity to continue gold payments; the conse-
quent boarding of gold at home and the
stoppage of investments OF foreign capital
as well as the return of our securities sold
abroad; and the high rate or foreign ex-
change, which induced the shipment of our
gold TO be drawn against, as a matter of
speculation.
Bond Issues Necessitated.
In consequence of these conditions, the
esq., was Sa the to o. having cy
more than $31 100000 during the preceding
nine months, or since April, 1893. It's re-
punishment being necessary, and no other
manner of accomplishing it being possible,
resort was had to the issue and sale of
bonds proyided for by the redemption act
sold, yielding $751; ,2951 which was add
ed TO the reserve fund of gold then on hand.
AS a result of this operation this reserve.
which had suffered constant and large
withdrawals in the meantime, stood on the
9Th day of March, 1894, at the sum of $l07,-
446, So2 Its depletion was. however, i'm
mediately thereafter so accelerated that
on the Goth day of June 1894, 1t had fallen
to s64,S79025, thus losing by withdrawals
dropping slightly below its situation when
the sale of $50,000,0 900 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 S57,6G9 701, 1t
became necessary to again strengthen 1t.
amounting to $50,000,00O. for which there
was realized $5S,53S 800. with which the
fund was increased to si11,142,O2 on the 4th
day of December, 1894.
Congress Refused to Act.
Again disappointment awaited the anxi-
Gus hope for relief There was not even
lull In the exasperating Withdrawals of
gold. On the contrary. they grew larger
the 4th day of December. 1894 and early in
February. 1895. a period Of scarcely more
than two months after the second rein
forcement of our gold reserve by the sale
Of bonds, 1t had lost by such Withdrawals
more than 100000. and had fallen to
Sal ,34o.1S1 Nearly $43,O0o.0 900 had been with
drawn within the month Immediately pre-
ceeding this situation. In anticipation of
impending trouble. i had on the 2Sth day
of January. 1895, addressed a communica-
difficulties and dangerous position, and
earnestly recommending that authority be
given the secretary OF the treasury to is
sue bonds bearing a low rate of interest
payable by their terms in gold, for the pur-
pose of maintaining sufficient gold re-
serve, and also for the redemption and
cancellation of outstanding United States
notes and the treasury notes issued for
the purchase of silver under the law of
$780, This recommendation did not, how
ever, meet with legislative approval.
Another Emergency.
In February, 1895, therefore, the situation
was exceedingly critical With a reserve
perilously low and refusal of congress
end of gold payments by the government
was imminent The results of prior bond
issues had been exceedingly unsatisfac-
tory and the large Withdrawals Of gold
in open market gave rise to reasonable
suspicion that a 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 and found its way to the
hands of those who had only temporarily
nllrchaSe bonds.
In this emergency, and in view of it's sur
rounding perpleXities, 1T became entirely
apparent to those upon whom the struggle
for safety was devolved not only that our
gold reserve must, for the third time in less
than 13 months, be restored by another
issue and sale of bonds bearing a high rate
OF interest and badly suited to the purpose,
but that plan must be adopted for their
disposition promising better results than
those realized on previous sales.
Tho Syndicate Agreement.
An agreement was therefore made with
a number of flnancierS and bankers where
by it was stipulated that bonds described
in the resumption act of 1873 payable in
coin 30 years after their date, bearing in
terest at the rate of four per cent: per an
mum, and amounting to about $62,QOOQCO,
should be exchanged for gold, receivable
BY weight, amounting to little more than
S65, 1000. This gold was to be delivered In
such instruments as would complete It's
delivery within about six months from the
of the amount was to be furnished from
abroad 1t was also agreed by those sup
plying this gold that during the continu-
means In their power protect the gov
eminent against gold Withdrawals. The
v would authorize their issue, bonds payable
by their terms in gold and bearing interest
at the rate of three per cent. per annum
par for the four per cent. bonds described
In the agreement.
Thinks Disaster Was Averted.
On the day this contract was made Its
terms were communicated to congress by
q special executive message, in which IT
was stated that more than $16,000,000 would
be saved to the government If gold-bearing
bonds bearing three per cent: interest were
authorized to be substituted for those men
toned in the contract. The congress nav
ing declined to grant the necessary author
ity to secure this saving, the contract, I'M
modified, was carried out, resulting In
gold reserve amounting to S107, 51 $50 on the
9Th day of July, 1885 The performance or
this contract not only restores, the reserVe;
gold and brought on period or restored
confidence and such peace and quiet in
business circles as were OF the greatest pos,
our people. have never had the slightest
misgiving concerning the wisdom or pro-
priety of this arrangement, and am quite
willing to answer for my full share of re-
sponsibility for it's promotion. l believe 1t
averted disaster the imminence of WHICH
was fortunately not at the time generally
understood by our people.
Good Results Not Permanent.
Though the contract mentioned stayed
for a time the tide Of gold withdrawal, its
good results could not be permanent. Re-
cent Withdrawals have rduced the reserve
from $l07, ST. ,230 on the Sth day of July,
1895, to SO, 966. How long 1t will remain
large enough to render its increase unnec-
essary is only matter of conjecture, though
quite large Withdrawals for shipment in
the immediate future are predicted in we'll
Informed quarters. About $16,000,O00 has
been withdrawn during the month of Mo-
Situation Still Critical
The foregoing statement of events and
conditions develops the fact that after in
creasing our interest-bearing bonded in
debtedness more than $162,0OO,OOO to save
our gold reserve, we are nearly where we
started, having now in such reserve 49,
333. 966, as against $685. 43s,377 in February,
1894 when the first bonds were issued.
Though the amount of gold drawn from
the treasury appears to be very large, as
gathered from the facts and figures herein
presented 1t actually was much larger,
considerable sums having been acquired
by the treasury within the several periods
stated without the issue of bonds.
on the 2Sth of January, 1926, 1t was re-
ported by the secretary OF the treasury
that more than 900 of gold had been
withdrawn for boarding or shipment dur
ing the year preceding. He now reports
that from January /, 1879, to July ID, 1890,
a period of more than II years, only little
over $4,000, 600 was withdrawn, and that
between July IA, 1890, the date of the pas
sage of the law for an increased purchase