New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1895-12-04

Nshment this reserve amounted TO less than
Sioo.ooo.o0c. containing at that date only w.
OIL $3.50
In the mean time. and in July 1890. an act
had been passed directing larger Governmental
monthly purchases Of silver than had been re-
quircd under previous laws and provicing that
in payment for such silver Treasury notes OF
the United states should be ISSUED payao'e on
demand In gold or silver coin at the discretion
Of the Secretary Of the Treasury. IL was. how.
ever. declared in the act 10 be the established
policy Of the United States TO maintain the two
metals on a parity with each other upon the
present legal ratio. or such ratio as may be pro-
vided by law" In view Of this declaration II
was not deemed permissible for the Secretary
az the Treasury n exercise The discretion in
terms conferred on him, by refusing To pay gold
on these notes when demanded, because by sucn
discrimination in favor ~ the gold dollar the Sc
called parity Of the two metals would be 90
stroyed ard grave and dangerous consequences
would he precipitsted by affirming or accen.u-
ating the constantly widening disparity between
their actual values under the existing ratio.
II thus resulted that he Treasury notes Is
sued In payment Of silver purchases under the
law OF 1890 were necessarily treated as gold
obligations. at the option OF the holder. These
notes on the first day Of November. 1899. when
the law compelling the monthly purchase OF
silver was repealed. amounted TO more than
Sl5S.oo0.oco. The notes Of this description now
outstanding added to the United States notes
eth undminshed by redemption or cancea-
ton constitute a volume Of gold obligations
amounting TO nearly $500 600 900 These obga-
t,ons are the instruments which. ever since we
have had gold reserve. have been used 10 de-
riete H.
sHRINKAGE IN THE GOLD RESERVE.
This reserve "a has been stated, had fallen
In April 1893. TO s97 1880 1t has from that
time to the present. with very few and unim-
portant upward movements. steadily decreased
except as It has been temporarily replenshed
by the sale OF bonds.
Among the causes for this constant and uni
form shrnkage in this fund may be mentioned
the great falling off of exports under the opera
of h. In
which crippled exchange OF commodities
with foreign nations and necessitated 10 some
extent the payment OF our balances IN Solu
the unnatural infusion of silver into our cur
rency. and the increasing agitation for It's free
and unlimited coinage. which have created APP
prehension TO our disposition or abilty 10
continue gold payments: the consequent hoard
ing OF gold at home and the stoppage OF invest
ments Of foreign capital, as well as the return
~ our securities already SOLD abroad: and fhe
high rate Of foreign exchange. which inducei
the shipment OF our gold to be drawn against
as matter of speculation.
In consequence Of these conditions the gold
reserve on the first day OF February 1884. was
reduced 10 500 81 having LOST nor s"@ an
s31 600 600 during the preceding nine months. or
since April. 1898. Its replenishment being neces-
sary, and no other manner Of accomplishing II
being possible. resort was had TO the issue ana
sale Of bonds provided for by the resumption
act OF 1875. Fifty millions OF these bonds were
sold Welding SIS 633 295 Il, which was added to
the reserve fund Of gold then on hand AS
result of this operation this reserve, whlch haa
suffered constant and large Withdrawals in the
mean time stood the 9TH day or MaIcH, 1881
ut the sum of slo7ii6sO2 Its depletion was;
however. Immediately thereafter so accelerated
that the 30th day Of June. 1924, II had ialIen
To s64 S73 025 thus losing by WITHDRAWALS more
than s42 900 900 In five months and dropping
slightly below It's situation when the sale OF
$50 900 in bonds was effected for its repieh-
ishment
This depressed condition grew worse and on
the Path day OF November. 1894. our gold re-
serve being reduced to S5LS69,Ol ~ became
necessary TO again strengthen it. This was
done by another sale of bonds amounting TO
$4,000 900. from which there was realized S's'-
b3s 500 with which the fund was Increased 10
slll142 O21 on the 4th day Of December, 1894
Again disappointment awaited the. ANXIOUS
hone for relief There was not even a iuli in
the exasperating Withdrawals of gold on the
contrary, they grew larger and more persistent
than ever. Between the Attn day OF DeceHper
1894 and early in February, 1895. period OF
scarcely more than two months after the second
reinforcement of our gold reserve by the SAFE OF
bonds, i had lost by sacn Warhdraw s a4o ISL,
Nearly SAB 900 900 had been Withdrawn wlthh
the month Immediately preceding TINS SITUATION
In anticipation of impending trouble, had
on the 2sth day of January. 1895. addressed
communication to the Congress fuly seuins
forth our difficulties and dangerous posivlI he
given the Secretary Of the Treasury to issue
bonds bearing low rate OF interest payable
by their terms in gold. for the purpose or MAIN
tanning a sufficient gold reserve ana also lor
the redemption and cancellation or outstanding
United States notes and the Treasury notes
issued for the purchase of silver under the law
Of 1890 This recommendation dd not now
ever, meet with legislative approval s,,ro.,or
In February 1895 therefore the situation
was exceedingly critical With reserve peril
ously low and refusal of Congressonal aid
everything indicated that the end of gold pay
ments by the Government imminent. The
results OF prior bond issues had been exceeding
~ unsatisfactory, and the large withdraWais
OF gold Immediately succeeding their public
sale In open market gave rise TO reasonable
suspicion that a large part OF the gold pald INTO
the Treasury upon such sales was promptly
drawn ont again by the presentation of United
States notes Treasury notes and found It's
way TO the hands Of those who had only ten-
porarily parted with 1t in the purchase OF bonds
THE BOND SYNDICATE AGREEMENT.
In this emergency, and in view of its sur
rounding perpexities, it became entirely APP
parent to those upon whom the struggle for
safety was devolved not only that gold re-
serve must for the third time in less than thir-
teen months be restored by another issue and
sale Of bonds bearing high rate Of interest
and badly suited 10 the purpose, but that plan
must be adopted for their disposition promising
better results than those realized on previous
sales. An agreement was therefore made
with number Of fnanciers and bankers
whereby It was stipulated that bonds
described In the resumption act OF 1870
payable in coin thirty years after their date
bearing interest at the rate Of per cent per
annum' and amounting to about $50 900 900
should be exchanged for gold. receivable by
weight, amounting to little more than Seo'-
100000.
This gold was 10 be delivered in such install
ments would complete its delivery within
about six months from the date or the con-
tract and at least one-half Of the amount was
TO be furnished from abroad. 1t was also agreed
by those supplying this gold that during the
continuance of the contract they would by every
means in their power protect the Government
against gold Withdrawals. The contract also
provided that If Congress would authorize their
issue, bonds payable by their terms in gold and
bearing interest at the rate Of per cent per
annum might within ten days be substituted at
par for the per cent bonds described in the
agreement.
On the day this contract was made its terms
were communicated to Congress by a special
Executive message, in which II was stated that
more than SIG 900 900 would be saved to the Gov
eminent II gold bonds bearing per cent interest
were authorized to be substituted for those men
toned in the contract.
WILLING TO TAKE THE RESPONSIBILITY.