The Wilmington daily Republican. (Wilmington, Del.) 1890-1902, 1895-02-11
THE NEW BOND ISSUE
President Cleveland Tires of Wait
ing for Congress to Act.
A PURCHASE OF GOLD FOR BONDS.

The Greater Half of the Precious Metal
to be Brought from Abroad-It VIII
Increase Our Gold Reserve More Than
Hundred Million.
WASHINGTON, Feb 9-The president
yesterday sent u brief message to congress
calling attention to his recent message re-
Earding the financial situation, and say
ing that, in default Of better means, "ar-
rangements have been concluded with
parties abundantly able to fulflll their un.
dcrtaking whereby bonds of the United
States, authorized under the act of July
II, 1875, payable in coin thirty years after
their date, with interest at the rate of
per cent. per annun, to tho amount OF lit
tie less than $50, 400, 900, arc to be issued for
the purchase of gold coin amounting to
sum slightly in excess of SG5, 900, 600, to
be delivered to the treasury of the United
States, which sum- added TO the gold now
held in our reserve, will so restore such re-
serve as to make 1t amount to something
more than sl0O, 100000. Such a 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 891
cent. per annum. At least one half OF the
gold TO be obtained is to be supplied from
tbIbHut WHICH is " very llnDDTtunu anu la
vorable feature Of the transaction"
The bond transaction just consummated,
strictly speaking, is not sale of bonds
for gold, but purchase Of gold to be paid
for in bonds. The issue was not made
under the authority granted by the re-
sumption act but under section 800 of
the revised statutes, which reads as fol-
lows THE secretary of the treasury may
purchase coin with any of the bonds or
notes of the United States, authorized by
law, ut such rates and upon such terms us
he may deem most advantageous to the
public interest"
Tho contract was made with August
Belmont 81 Co., of Now York, on behalf
of Messrs. n. NJ Rothschilds & Sons, of
London, and themselves, and j. z. Morgan
& Co., of New York, ON behalf of j. 5.
Morgan S5 Co., of London, and themselves.
and provides for the delivery to tho
United States of q. 100000 ounces of stand
ard gold coin Of the United States to DO
paid for in United States per cent. bonds.
A large number of other banks and
financial institutions are interested in tho
contract itself. The department does not
know in what proportions the various par
tics are to furnish the gold coin or receive
tho bonds, as this is a matter for arrange
ment between themselves. By the terms
of the contract the parties are to bear all
the expense of bringing the gold from
abroad.
Another stipulation of great Importance
is that Mcssrs, Morgan and Belmont agree
toexert all their financial strength and
influence, and that of their associates at
homo and abroad, to protect the treasury
against Withdrawals of gold pending COM
plctc performance of the contract. No
Il. Il u.
ment for gold actually delivered In view
of the probable failure of congress to act,
treasury officials declare that these terms
are the best that could bo procured with o
coin bond. Those who are in position
to know the presidents views on the suo-
jcct give it as their opinion that this issue
will SO far restore public confidence at
home and abroad thnG any other issues
will be unnecessary, at least until tho
meeting of the ncxt congress- in Decem-
Der. If, however, it should become nooes-
sary the president will act as promptly as
may be necessary to protect the public
credit.
1t is confidently expected by the presl.
dent that this issue will render an extra
session of congress wholly unnecessary. 1t
is stated on gond authority that it was the
presidents first intention to make tho
present loan slOO,OOOiOOO ana this amount
was for some timo insisted upon by the
London bankers, but after much dclibera.
tion the president concluded the amount
announced yesterday would probably an
swer every purpose as fully as greater
amount. His decision was reluctantly
concurred in.
There is said to be no provision in tho
contract obligating the government to
dispose of any future issues to Messrs
Morgan and Belmont, or to anyone whom
soever, nor was there any specific or inn
piled understanding to that effect. 1t is
understood that the gold called for by the
terms of the agreement will bo shipped
from London at the earliest day practic
able.