Staunton vindicator. [volume] (Staunton, Va.) 1860-1896, 1895-03-01
fR- CLEVELAND,S SAFE or BONDS

Mr. CLEVELAND'S SALE OF BONDS.
Tt would not be amiss for those who I'M
dertake to discuss the recent contract
of the government with the London houses
of Rothschild and Morgan for loan on U.
5. bonds at per cent. to have the facts
before them. Before Mr.. Harrisons ad-
ministration went out the financial depres-
sion had commenced, and his Secretary of
the Treasury, Mr. Foster, had expressed
the opinion that bond issue would have
to be resorted to to keep up the gold re-
serve. After Mr.. Cleyeland's administra-
ton went in the depression still grew and
the drain on the Treasury gold increased.
In March of 1893, a few days after his ad-
ministration began, the government at
tempted to maintain the specie reserved
required by law, by borrowing gold on it's
notes. The banks came forward patriOtical-
ly and furnished $4,000, 900 of their gold
on those notes, but that failed to answer the
purpose. In February, 1894, it borrowed
$5s. 900, 900 on its issue of per cent. bonds.
The syndicate that took up that loan barely
saved itself. That gold was soon drawn
out of the Treasusy by the presentation of
greenbacks and treasury notes. Last June
the government borrowed 100000 from
the New Y ork banks Oh it's own notes-that
was soon drawn out. Last November it is
sued and sold $50, 100000 worth of per
cent. bonds, and The American syndicate
that took that, lost money on the deal. That
new installment of gold was soon drawn
out of the Treasury-it had become a reg
ular business in American finance to pay
gold for the government bonds and then
promptly turn around and draw the gold
out of the Treasury. All this time the
President and Secretary had been impor-
tuning congress to pass a bill for the issue
of bonds at 3 per cent. payable in gold, but
it had refused. After the American expe-
rience MI. Cleveland turned to Europe
the only place he had to turn to. But even
in the contract with the Rothschilds and
Morgan, still hoping that congress might
come to it's senses and pass the bill, this
clause was inserted:
by reserves the right, within ten days from
the date hereof, in case he shall receive au-
thority from congress therefor, to substitute
any bonds of the United States bearing per
cent. interest, of which the principal and in
terest shall be specifically payable in United
States gold coin Of the present weight and
fineness for the bonds herein alluded to; such
per cent. bonds to be accepted by the parties
of the second part at par. .. e. at SIS. 60465 per
ounce of standard gold.
But congress with mulish obstinacy has
refused to pass such an act, and left the
President nowhere to go but abroad, and
nothing to do but to contract on the best
terms he could. He had to do the best he
could to preserve the government credit,
and has done it. In the contract, about
which there is no ''secrecy" whatever.
but which has been published in full, are
several stipulations advantageous to the
government, one being that fully one half
of the gold shall be obtained in and ship
ped from Europe" and another giving the
same parties a first option on any bonds
the Secretary Of the Treasury may desire
to sell ION or before October 1, 1895, -
from which we take it that the parties who
have taken the present contract will pro-
tect the U. S. Treasury gold reserve for the
next six months.