Richmond dispatch. [volume] (Richmond, Va.) 1884-1903, 1895-12-04


gold. or siIver coin. at the discretion OF
the Secretary OF the Treasury ~ was
however declared I'm the act TO be the
established policy OF the United states
TO maintain the two metals on parity
with each other upon the present regal
ratio. or such ratio as may he proV'deo
by law"
In view of this declaration IL was not
deemed permissible for the Secretary OF
the Treasury 10 exercise the discreuoh
in terms conferred on him. by refusing
to pay gold on these notes when de-
manded. because. by such discrimination
I'm favor OF the gold dollar, the so-called
rarity of the two metals would be de-
stroyed. and grave and dangerous conse-
auences would be precipitated by atiirm-
ing or accentuating the constantly widen
ing disparity betwee their actual values
under the existing ratio.
GOLD OBLIGATIONS.
1t thus resulted that the Treasury
notes issued i'm payment of silver pur-
chases under the law Of 1880 were neces-
sarily treated as gold obligations, at
the option OF the holder. These notes
on the LIST day OF November, 1899. when
the law compelling the monthly purchase
OF silver was repealed. amounted TO more
than sl55.Oo0OOO. The notes OF this de-
scription now outstanding. added TO the
United States notes stu undminished by
redemption or cancellation. constitute
volume Of gold obligations amounting 10
nearly s500COOoc0 These obligations are
the instruments which. ever since we
have had a gold reserve. have been used
10 deplete IL.
This reserve. as has been stated. had
fallen in April 1898, to S7,0li350. IL
has from that time to the present with
very few and unimportant upward move
ments. steadily decreased, except as II
has been temporarily replenished by the
sale OF bonds.
Among the causes for this constant and
uniform shrinkage I'm this fund may be
mentioned the great falling of OF exports
under the operation of the tariff law until
recently in force. which crippled our eN-
change OF commodities with foreign ma
tions. and necessitated TO some extent the
payment Of our balances In gold: the I'M
natural infusion OF silver into our curren-
cy. and the increasing agitation Tor us
free and unlimited coinage, which have
created apprehension as TO our disposition
or ability TO continue gold payments the
consequent boarding of gold at home ana
the stoppage OF investments OF foreign
capital. as well as the return OF our Sc
curties already sold abroad, and the hlsn
rate Of foreign exchange, which induced
the shipment Of our gold TO be drawn
against. as a matter OF speculation.
SALES OF BONDS.
In consequence OF these conditions the
gold reserve on the lst day of February,
1894 was reduced to Se5. 43S.377. having
lost more than S3l 10000 during the pre-
ceding nine months. or since April 1898.
/ Its replenlshment being necessary. and
/ no other manner Of accomplishing 10 being
| possible. resort was had to the issue and
sale OF bonds provided for by the re-
SUMPTION act of 1875. Fifty millions or
these bonds were sold yielding Sos.eS3, o.
2a57l which was added TO the reserve
| fund Of gold then on hand As a result
! of this operation. this reserve, which mad
suffered constant and large Withdrawals
/ i'm the mean time stood on the 6th day OF
March 1885, at the sum OF flOi 40 ovz- us
depletion was. however Immediately
/ thereafter so accelerated that on the @th
day OF June. 1894. 1t had fallen TO So4. 500
O25. thus losing by Withdrawals more than
| si2 600 O9O i'm five months, and dropping
| slightly below It's situation when the sale
| OF $50 900 OC0 i'm bonds was effected for us
replenishment.
This depressed condition grew worse
and on the 2ith day of November, 1871
our gold reserve being reduced to Soh6os -
I 7Ol. II became necessary 10 again Strength
on II. This was done by another sale OF
bonds. amounting TO 100000. from whlch
there was realized s5s53s,50o with when
the fund was increased TO Slll'l4-'oA on
the ith day Of December 1871
Again disappointment waited the
anxious hope for relief. There was not
/ even lull in the exasperaung with
! drswals of gold. on the contrary, they
grew larger and more persistent than
ever Between the 4th day of December
1894. and early in February, 1870, pc
rlod of scarcely more than two months
after the second reinforcement OF our
gold reserve by the sale OF bonds II had
lost by such Withdrawals more than
$50 900 900. and had fallen 10 N,5p'isl
Nearly s4O0O.OO0 had been withdrawn
within the month Immediately preceding
this situation.
MESSAGE TO CONGRESS.
In anticipation Of impending trouble.
] | had on the 18th day OF January. 1870,
addressed communication 10 the Con-
sress fully setting forth our difficulties
and dangerous position. and earnestly
recommending that authority be given
the Secretary Of the Treasury 10 issue
bonds bearing a low rate OF interest,
payable by their terms in gold, for the
d. rpose OF maintaining a sufficient gold
] reserve. and also for the redemption and
I cancellation Of outstanding United states
notes and the Treasury notes issued for
the purchase Of silver under the law OF
1890. This recommendation did not. how
ever. meet with approval.
SITUATION CRITICAL.
In February. 1896 therefore. the situa-
ton was exceedingly critical. With a
reserve perilously low and a refusal or
| congressional aid, everything indicated
that the end OF gold payments by the
government was imminent. The results
I of prior bond issues had been exceedingly
unsatisfactory. and the large Withdrawals
Of gold Immediately succeeding their
public sale in open market gave rise TO
a reasonable suspicion that a large part
/ OF the gold paid into the Treasury upon
such sales was promptly drawn out again
by the presentation OF United states
notes or Treasury notes. and found its
way 10 the hands of those who had only
/ temporarily parted with it in the pur-
chase OF bonds.
BOND-PURCHASE SYNDICATE.
/ In this emergency and in view OF its
surrounding perplexities IL became en-
tirey apparent 10 those upon whom the
struggle for safety was devOiyed. not
l only that our gold reserve must for the
third time in less than thirteen months
be restored by another issue and sale OF
bonds bearing a higher rate of interest
and badly suited 10 the purpose. but that
a plan must be adopted for their disposi-
ton promising better results than those
realized on previous sales. An agreement
was therefore made with a number OF
fnanciers and bankers whereby IL was
stipulated that bonds described in the
resumption act Of 1873. payable In coin
thirty years after their date. bearing in
terest at the rate OF 4 per cent. per an
uum. and amounting TO about s62,oO0OD
should be exchanged for gold receivable
by weight amounting 10 a little more
/ than SIS 10000 This gold was TO be de-
I llyered in such instruments as would