The Austin weekly statesman. (Austin, Tex.) 1883-1898, 1895-02-14
PURCHASE OF GOLD TO BE PAID
IN BONDS.
1t is At the Option of Congress Whether
the Bonds Will be 4-PerneC
the Bonds Will be 4-Per-Cents Pay
able in Coin, or 3-Per-Cents
Payable in Gold.

hension then existing in business circles
have continued.
"As u precautiOn therefore, against the
failure of timely legislative aid through
congressional action, cautious prepara-
lions have been pending to employ to the
best possible advantage, in default of
better means, such executive authority
as may, without additional legislation
be exercised for the purpose of rein
forcing and maintaining in our treasury
an adequate and safe gold reserve
SIN the judgment of those especially
charged with this responsibility, the bus
mess situation is critical and the legisla-
tive situation is so unpromising, with
the omission thus far on the part of the
congress to beneicially enlarge the pow
ers of the secretary of the treasury in
the premises, as to enjoin immediate eX-
ecutive action with the facilities now ut
hand.
Therefore, in pursuance with section
300 of the revised statutes, the details
Con.luded with parties anundantly able
under the act of July Ia, 1873, payable
in coin, 80 years after their date, with
interest at the rate of 4 per cent per an
mum to the amount of little less than
$62, 100000 are to be issued for the pur-
chase of gold coin amounting to sum
slightly in excess of $50, 000,0 900 of dol
lars to be delivered to the treasury of
the United States, which sum, added to
the gold now held in our reserve, will
make it amount to more than 100000
600. Such premium is to be allowed to
the government upon the bonds as to fix
the rate OF interest upon the amount of
gold realized at the rate of B 81 per cent
per annum. At least one-half of the gold
to be obtained is to be supplied from
abroad, which is a very important and
favorable feature of the transaction.
The privilege is especially reserved to
the government to substitute at par with
in ten days from this date in lieu of the
per cent coin bonds, other bonds pay
able In gold and bearing only per cent
interest if the issue of the same should
in the meantime be authorized by con-
gress.
"The arrangement thus completed,
which after careful inquiry appears in
the present circumstances, and consider
ing all the objects desired the best re-
suits attainable, develops such differ
ence In the estimation of investors be-
tween bonds made payable in coin, and
those specifically made payable in gold
in favor Of the latter as is represented
by three-fonrths of q cent in annual in
terest.
ain the agreement thus concluded the
annual saving in interest to the govern
ment if three per cent gold bonds SHOULD
be substituted for 4 per cent coin bonds
under the privilege reserved would be
$539,159, amounting in 30 years ut the
maturity of the coin bonGs to Slo,1T4,
no.
"Of course, there never should be Il
doubt in any quarter as to the redemp-
& tion in gold of the bonds of the govern
ment, which are made payable in coin.
Therefore the discrimination in the iudg-
ment of investors between our bond OBJ
legations payable in coin and those speci-
fically made payable in gold is very sig
niiicant.
1T is hardly necessary to suggest that
whatever may be our views on the sub.
iect the sentiments and preferences of
those with whom we must consider in
distressing If our p,nGs !tr R"ld mr- not
subject to Orr dic;ation.
81 have urly to add I II; m nv opinion
the transaction herein mtimn'"J for the
information of the ,ongc'SS promises
better results than the ones previously
made in the direction of effectively add
ing to our gold reserve through the sale
of bonds; and | believe it will tend, as
far as such action can in present circum-
stances, to meet the determination ex-
pressed in the law repeating the silver
purchasing clause of the act of July IA,
1890, and that in the language of such
repeating act the arrangement made Will
aid our efforts to insure the maintenance
of the parity in value Of the coins of the
two metals and the equal power of every
dollar ut all times In the markets and in
The payment of debts.
"GROVER CLEVELAND"
Exc utiye Mans on. February s, 800.
Washington, Feb. S.-The bond tran
saction consummated today, strictly
L., 81 hon do NJ
but q purchase of gold to be paid for
in bonds, The issue was not made UNI
der the authority granted by the re.
sumption act, but under section 800 OF
the Revised Statu es, which reads as
follows:
.'The secretary of the treasury, may
purchase coin with any OF the Donds
or notes of the United States authorized
nv law at such dates and upon such
terms as he may deem best advantageous
to the public interests" =,
The contract was made with August
Belmont & Co. of New York in behalf
~ Messrs. Rothschlds & Son of London
< and themselves and J. =. Morgan d
Go. of New York in behalf OF D. L;
Morgan of London and themselves, ana
provides for the delivery to the United
States of 100000 ounces OF stahdar9
rold coin of the United States to be pald
for in United States per cent bonds.
a large number of other banks and imam
cial institutions are interested in the
transaction, but their names are not men
toned in the contract itself. The depart
ment does not know in what proportion
tbe various parties interested are sup
NV the coin or receive the bonds, as 1t
IS matter for the arrangemnt among
themselves. BY the terms of the CONTRACT
the parties are to bear all expense OF
bringing the gold from abroad.
Another stipulation of Importance is
that Messrs. Morgan and Belmont agree
to assert all their financial strength ana
influence to protect the treasury against
Withdrawals of gold, pending complete
performance of the contract. NO bonds
are to be delivered except in payment
for gold actually delivered. In view OF
the probable failure of congress, treasury
officials declare that these terms are the
best that could be procured with coin
bond. Those who are in a position TO
know the presidents views on the sub
ject give it as his opinion that the issue
will so far restore public confidence at
home and abroad that any other issues
will be unnecessary, at least until the
meeting of the next congress in Deem
Der. If, however, it should become nee
essary, the president will act as promptly
aa naceaaaIv tn protect the public credit.