Evening star. [volume] (Washington, D.C.) 1854-1972, 1895-12-03

| ais would be destroyed. and grave and dan
eerous consequences would be precipitated
by Affirming or accentuatIng the constantly
widening disparity between their actual
values under the existing ratio.
1t thus resulted that the Treasury notes
| issued In payment of silver purchases under
the law Of 1880 were necessarily treated as
| gold obligations, al the option Of the holder
These notes on the LIST day of November
1883. when the law compelling the monthly
| purchase Of silver was repealed, amounted
! to more than $155,OOO,OOO. The notes of
| this description now outstanding added to
the United States notes still undiminished
| by redemption or cancellation constitute a
| volume of gold obligations amounting TO
| nearly $5O0.00O,OO0 These obligations are
the instruments which. ever since We have
| had a gold reserve, have been used to de-
| Pete 1t.
The Depleted Reserve.
This reserve, as has been stated, had
| fallen in April, 1893. to s9T,O11 $50 1t has
| from that time to the present, with very
few and un!mportant upward movements,
steadily decreased, except as it has been
temporarily replenished by the sale of
| bonds.
| Among the causes for this constant and
| uniform shrinkage in this fund may be
mentioned the great falling Off of exports
| under the operation of the tariff law until
recently in force, which crippled our ex-
change Of commodities with foreign ma
tons and necessitated to some extent the
| payment of our balances in gold; the I'M
natural infusion Of silver into our currency,
and the increasing agitation for its free
and unlimited coinage, which have created
| 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 al
| ready sold abroad: and the high rate of for
eign exchange, which induced the shipment
| 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, 1894,
| was reduced to SIS, ABS. 81, having lost more
! than 81,OOO,GoO during the preceding nine
months. or since April 1873. Its replenish-
ment being necessary, and no other manner
| of accomplishing it being possible resort
| was had to the issue and sale of bonds pro-
vided for by the resumption act of 1879.
| Fifty millions Of these bonds were sold,
| yielding s5S,653. 295.71 which was added 10
| the reserve fund of gold then on hand. As
result of this operation this reserve, which
had suffered constant and large with
drawals in the meantime, stood on the 9th
| day of March, 1894, at the sum of $l07, 446,-
So2 Its depletion was, however, Immediate
| ly thereafter so accelerated that on the
Both day of June, 1884, it had fallen to s6i,-
SI3O25, thus losing by Withdrawals more
than $i2,OO00O0 in five mon tbs and dropping
slightly below its situation when the sale
of SJO0O0OOO in bonds was effected for its
| replenishment.
on the 2ith day of November, 1894. our gold
reserve being reduced 20 1863, 701, it be-
came necessary to again strengthen it. This
was done by another sale of bonds amount
ing TO s50.OO0.OO0, from which there was
| realized S5S,53S, 800, with which the fund
was increased to Sill, iI2,O21 on the 4th day
of December, 1891
Again disappointment awaited the anxious
hope for relief There was not even a luiI
In the exasperating Withdrawals of gold.
On the contrary, they grew larger and more
persistent than ever Between the 4th day
of December, 1894. and early in February.
| 1895, period of scarcely more than two
months after the second reinforcement of
our gold reserve by the sale of bonds. it had
lost by such Withdrawals more than s6?,-
100000 and had fallen to $41,340 ISL. Near
| ly $43,OOO,OO0 had been withdrawn within
| ton.
In anticipation of impending trouble,
had on the 2Sth day of January, 1895, ad-
dressed communication to the Congress
fully setting forth our difficulties and dang
erous position, and earnestly recommending
that authority be given the Secretary Of the
Treasury to issue bonds bearing a low rate
of interest, payable by their terms in gold,
Tor the purpose of maintaining a sufficient
gold reserve, 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
1890. This Recommendation did not. how
ever meet with legislative approval
In February, 1895. therefore, the situation
was exceedingly critical With a reserve
perilously low and refusal Of Congress
sional aid, everything indicated that the end
| of gold payments by the Government was
| imminent. The results of prior bond issues
| had been exceedingly unsatisfactory, and
| the large Withdrawals. of gold Immediately
| succeeding their public sale in open market
| gave rise to a reasonable suspicion that 4
| large part of the gold paid into the Treas
| ury 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 parted with it in the purchase
of bonds.
| The Recent Bond Issues.
In this emergency, and in view of Its sur
| rounding perplexities, 1t became entirely ap-
parent to those upon whom the struggle for
safety was devolved not only that our gold
reserve must, for the third time in less than
| thirteen months be restored by another
| issue and sale of bonds bearing a high rate
| Of interest and badly suited to the purpose,
| but that a plan must be adopted for their
| disposition promising better results than
| those realized on previous sales. An agree
ment was therefore made with a number of
| fnanciers and bankers whereby It was
| stipulated that bonds described in the
sumption act OF 1915, payable in coin thirty
years after their date, bearing interest at
| the rate of four per cent per annum and
| amounting to about s62,O0O,000. should be
exchanged for gold. receivable by weight.
amounting to little more than S65,u0o,vOo.
rafl I.s Iar; IN, c,,,l,i.