The islander. [volume] (Friday Harbor, Wash.) 1891-1899, 1895-12-12
were sold, yielding sos, 1884, 95.71,

were sold, yielding $68, 633, 295. II
which was added to the reserve fun,
OF gold then ON hand. As result O
this operation this reserve, which ha,
suffered constant and large withdraw
ais in the meantime, stood, March 6
1894, at the sum of $l07, 446,80 1t
depletion, however, was Immediately
thereafter so accelerated that on Jun
30, 1894. it had fallen to $64, 1878, 025
thus losing, by Withdrawals, NOR,
than $40, 000,0 900 in five months, ant
dropping slightly below its situation
when the sale Of $50, 600. 900 in bond.
was effected for its replenishment
This depressed condition grew worse
and November "a, 1894, our gold re
serve, being reduced to $57, $3.50, 7O1
it became necessary to strengthen it
This was done by another sale o
bonds, amounting to $50, 900, 900, from
which there was realized $5S, 1888, 500
with which the fund was increased tx
$111, 42I ,021 December 4, 1894.
Again disappointment awaited thu
anxious hope for relief. There was not
even lull in the exasperating with
drawals Of gold. On the contrary, they
grew larger and more persistent than
ever. Between December 4, 1894, and
early in February, 1895, period Of
scarcely more than two months after
the second reinforcement of our gold
reserve by the sale of bonds, it had lost
by such Withdrawals, more than 500,
900, 900, and had fallen to $41, $40, 1871.
Nearly $40, 100000 had been with.
drawn during the month Immediately
preceding this situation.
In anticipation of pending trouble
had, January %, 1895, addressed a
communication to congress, fully set.
ting forth our difficulties, and danger.
GUS position, and earnestly recommend.
ing that authority be given the score.
tary of the treasury to issue bonds
bearing low rate of interest, payable
by their terms in gold, for the purpose
of maintaining a sufficient gold re.
serve. and also for the redemption and
cancellation of outstanding United
States notes and treasury notes issued
for the purchase of silver under the
law of 1890. This recommendation
did not. however, meet with legislative
approval. In February, 1895, there
fore, the situation was exceedingly
critical. With reserve perilously
low and refusal of congressional aid
everything indicated that the end of
gold payments by the government was
imminent. The results of prior bond
issues had been exceedingly unsatisfac-
tory and the large Withdrawals of gold,
Immediately succeeding their public
sale in open market, gave rise to rea-
sonable suspicion that large part of
the gold paid into the treasury upon
sales was promptly drawn out again
by the presentation of United States
notes or treasury notes and found its
way to the hands of those who had
only temporarily parted with it in the
purchase of bonds.
In this emergency, and in view of
its surrounding perplexities, it became
entirely apparent to those upon whom
the struggle for safety was devolved,
not 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 high rate
of interest and badly suited to the pur-
pose, 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 financiers and
bankers whereby it was stipulated that
the bonds described in the resumption
act of 1875, payable in coin thirty
years after their date, bearing interest
at the rate of per cent per annum,
and amounting to SEQ, 100000, should
be exchanged for gold receivable by
weight, amounting to little more
than 500, 900, 900. This gold was to
be delivered in such installments as
would complete its delivery within
about six months from the date of the
contract, and at least one-half Of this
amount was to be furnished from
abroad. It 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 withdraw
ais The contract also provided that
if congress would authorize the issue
of bonds payable by their terms in gold
and bearing interest at the rate OF
per cent per annum they might within
ten days be substituted at par for the
per cent bonds described in the agree
ment. On the day the contract was
made the terms were communicated tt
congress by special executive message
in which it was stated that more thar
SIC, 900, 900 would be saved to the gov
eminent If gold bonds bearing 5 pei
cent interest were authorized to be sub
stituted for those mentioned in the con
tract.
Congress having declined to gram
the necessary authority to secure THU
saving, the contract, unmoditied, wal
carried out. resulting in gold reserv'
amounting to $17,671,3S July 8, 1895
The performance of this contract no
only restored the reserve, but checked
for a time the withdrawal Of gold ane
brought on a period of restored conf
dence and such peace and quiet in bus
mess circles as were Of the creates
possible benefit in every interest which
affects our people.
have never had the slightest mis-
giving concerning the wisdom or pro
nriety of this arrangement. and an
quite willing to answer for my ful
share of the responsibility for its pro
motion. believe it averted disaster
the imminence Of which was fortunate
- - 2;~,a r,oparo l1v UNDERSTOOD