The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1895-12-03
PAYING In GOLD BARS
An ORDER THAT Is DEEMED w
FAVORABLE TO THIS COUNTRY.
How Ii Can He Taken Advantage of by
Leach Talks on the subject.


cations that the recent consultation be-
tween the President and Mr.. Whitney and
the visit OF Secretary Carlisle TO this city
were not devoted wholly to wedding cere-
noniais or the pleasures of the banquet.
One of these orders is characterized as the
first liberal order that has issued from the
Treasury Department since ii came under
the present administration. The other is
severely criticised, excepting by those who
will obtain pecuniary advantage from IL.
The first of these orders Instructed the
subtreasurer here and elsewhere TO pay out
gold bars in exchange for legal tenders or
gold certificates in case those offering
paper money of this kind asked for gold
bars
This is the first time that a Secretary of
the Treasury has used the discretion which
he possesses as to the kind of gold which
shall be given in exchange for legal tenders
or certificates since early in President Har-
risons administration. The law had COM
PEELED the Secretary to deliver gold bars
when they were demanded until Congress,
by practically a unanimous vote, changed
this law. Soon after Mr.. Leach, who was
appointed Director of the Mint by Presi-
dent Harrison. took charge of the mint.
he became satisfied that the mandatory law
compelling the Secretary to pay out gold
bars If demanded was sure at some time,
and might at all times operate to the dis
advantage of the Treasury Department
Putting the subject before Senator Sher-
man, the Senator cordially Endorsed the
view taken by Mr.. Leach and introduced a
bill giving the Secretary of the Treasury
the option whether he would redeem gov
eminent obligations in gold coin or in gold
q a =
is to export gold when there is a profit
in 1t learned that such bill was pending
they brought every influence they could
command TO bear that ii might be defeated.
They even denounced the Director of the
Mint and attempted to persuade some men,
bers Of the Cabinet that the proposed meas as,
Secretary Of the Treasury an unfair adj
vantage. Notwithstanding this opposition.
and when it was considered in Cabinet
meeting Mr. Leach appeared personally be-
tore the Cabinet and explained why he
advocated II.
HOW THE LAW OPERATED.
A number of illustrations used to
show how the law had operated. For IN
stance. cases were cited where gold export
ers had deposited gold coin which had been
subject to wear and tear. but were never
theless still acceptable. with the subtreas-
urer, received legal tender for them. and
d
ders, demanding gold bars for them. What
ever loss was entailed fell on the govern
men, A number of cases were referred TO
where brokers who had deposited gold coin
which had been in use and. therefore.
abrased, and had received gold certificates
for them, presented these certificates soon
after. demanding gold bars bars . When these
posted gold coin in exchange for these GER
tihcates, and ought to be willing to accept
gold coin for them again. they they insisted S
ceived gold bars which were worth, per-
haps. one-tenth of l per cent. more than
the gold coin. Whereas had the Csc Secretary aan
PEELED them to accept coin for the certifi-
Gates.
disadvantage of the government by facili-
tating the export Of gold, and in this way
when the rate of exchange was so near
the az 70 god bars could be
cured then there could be no question about
the profit. When a broker buys gold
exactly what it is worth, and what il will
command in the Bank of England. When
he exports gold coin he is not so sure about
that. So il was noticed that upon these
occasions when exchange was near the gold
exporting point. II bars could be procured
that fact Influenced the brokers so that
they withdrew bars for export
THE SYNDICATE'S PURCHASE
action Of the Morgan Belmont syndicate.
When last spring and summer that syndi-
cate was compelled to get gold to meet its
obligations and to protect its exchange. it
bought all the available private gold in
bars that were in the market. 1t then knew
exactly what it possessed, and what its
credit for that gold would be in Europe.
So it was felt that IL there were facilities
n t~o~
to influence exporters to ship gold.
These arguments were sufficient to per-
suade President Harrison that the bill be-
fore him was good one and he signed it.
Since the law was thus established the
Treasury Department has always insisted
upon using gold coin for the redemption OF
legal tenders and gold certificates. Thus it
has followed the example of the Bank OF
England, although 1t does not go so far as
that bank; for when the Bank of England
receives gold coin 1t carefully weighs 1t,
and when gold is sought from it for export
purposes 1t always furnishes the lighter
weight gold.
Some curious illustrations of the sharp
ness Of the gold exporting brokers are re
the operations of the subtreasury. For in
stance, one firm which desired to export a
half million in ebld offered legal tenders
for a million dollars and received coin for
it, Then this coin was carefully weighed.
the heavier coin being placed in one pile
and the lighter ones in another. The pile
a
which was the heavier was shipped to Eu-
rope. and the pie containing the coins OF
lesser weight was again converted into
legal tenders.
The Treasury Department, so long as
the Secretary of the Treasury exercised
his discretion and paid out gold coin for
legal tenders, had whatever advantage ex-
listed between the possession of ful-weight
gold bars and abraided gold COIN Great
pressure has been brought to bear upon
those who have or who are supposed to have
influence with the present administration
SO that Secretary Carlisle might be persuad-
ed to instruct the subtreasurers to furnish
gold bars II they were demanded. and this
pressure has at last proven successful. ii
was exerted through some of those infiu-
ences which have always seemed to be
against the interests of the United states
and in favor Of those which will benefit
Great Britain 1t is believed in Wall street
that some journalistic influences of this
kind were brought to bear. Whether the
President himself felt them or whether
they went no further than the Secretary of
the Treasury, who was persuaded that the
time was at hand to use his discretion in
favor of gold bars of course. is not known
Mr. Leach, who was Director OF the Mint
a banker in this city. He said this morning
that II would be unseemly for him to criti-
else the order of Secretary Carlisle. and he
added that perhaps to-day. in view of the
very high rate of exchange. the Secre-
tary might be wholly justified in issuing the
order At the same time he felt that this
country ought to protect its gold supply.
so far as 1t lawfully could. and might well
study the example of the Bank of England,
which retains to itself all possible advan-
faees. while In France this protection goes
a,,en f,,rther for there they refuse TO pay