The Wichita daily eagle. [volume] (Wichita, Kan.) 1890-1906, 1895-08-15

tors Afraid Of the Syndicate.
| Washington, Aug. IA new issue of
bonds will be made the moment there
is danger to the public credit. This is
| the news which comes from close friends
| Of the president, and it is in entire har-
mony with his declarations last winter
when the contract was made with the
| syndicate Matters will not be allow
/ ed TO drift so far as at that time The
president did not feel justified in thak-
! ing action then until he had given con-
| gress an opportunity to consider the
subject of currency reform, the retire
! ment Of the greenbacks and the sub
stitution of gold bonds for bonds re.
deemable simply in coin.
1t was the original intention at the
| treasury department to let the reserve
drift little below $50, DOC. 900 before tax
ing action, but the tremendous exports
and the redemption of paper money,
which occurred during the closing days
of January, took the situation for a
moment out of the control of the treas
ury and carried the reserve down with
a jump in twelve days from $40, 76S, III
to $44, 705, 1867. This will not be allowed
to occur again.
If there are symptoms of a real panic
sion of industry and the restoration of
business confidence, an opportunity will
be offered the syndicate to take a new
issue of bonds at fair price, and If
the offer is refused, terms will be quick
ly made with other takers. Action can
be taken under section 800 of the re-
vised statutes, as was the case with the
last contract, or under general author
ity to issue certain classes Of bonds
to secure redemDtiOn funds
DON'T LOOK FOR EMERGENCY
There is no expectation at the treas
ury that a new bond issue will be called
for this summer. The admission that
it will be made if needed, and made
promptly, is simply to forestall alarm
and assure the business community
that they need have no fear that the
favorable conditions which prevail in
trade shall be Nopelessly marred by an
other breakdown in the public credit.
The administration is firmly enough
resolved upon this point to keep on is
suing bonds at regular intervals, if nee
eSsary. There is no fear that the Syndi
cate will endeavor TO bring about a
situation demanding another issue OF
bonds, for the small profit they might
derive from it would count for little
against their probable losses in placing
other cases of American securities.
The managers of the syndicate have
several times intimated plainly to Sec
rotary Carlisle that they intended to
continue their efforts to protect the
treasury and their own customers for
American securities without regard to
the exact terms of their contract. They
are continuing to offer bills of exchange
drawn against their own credits, and
they are prepared to take stronger ac-
ton than they have yet taken if the
legitimate demand for gold to settle
hSl CHI int
tive demand for profit on the shipments
The broker who looks to gold shipment
for a Specula tive profit will be very
wary before the tempting vengeance of
the syndicate, with their immense pow
er over rates of exchange, the market
for securities and the gold supplies OF
the world.
The evidence that the bond syndicate
have had no disposition to force the
treasury into another loan is afforded
by the fact that the present small de-
mand for gold for export has been de-
layed until the moment when the tide
usually turns and brings gold back into
the country.
WHEN GOLD TIDE TURNED.
The years since the passage of the
Sherman law have been years of heavy
losses of gold to the United States; but
even these years have witnessed an ex-
cess of imports in August 1891 and
1898; small excess of exports in 1894;
which turned into an excess of imports
in September, and small exports in
both August and September. 1892, which
finally turned into an excess Of imports
in October.
The Sherman law is believed to be
still at work expelling gold from the
country because of the mass of $780,
100000 in legal tender paper which it
infused into the currency.
There is no power of contraction in
the currency system except by the lock
ing up of money in the treasury or in
the banks. The treasury has at pres
ent about s32 900. 900 in Sherman notes.
so. 100000 in United States notes. s10-
100000 in silver certificates and s., 900 90
in national bank notes. The New York
banks held last week S42, 900, 900 above
their legal reserves.
These figures indicate in some meas
mand for small notes to move the
ure the congestion of paper money. 1t
is hoped at the treasury that the de-
mand for small notes to move the
crops will soon ease this congestion
and arrest the outward movement Of
gold.
Another favorable influence. although
g. small one, will be the reduction of
the monthly deficit in the treasury,
which will prevent an increase of the
outstanding circulation by the excess
OF payments over receipts.