The true northerner. [volume] (Paw Paw, Mich.) 1855-1920, 1895-12-06
WHAT CAUSED THE sHRINKAGE'
Several Reasons Given That Brought the
Reserve Down to S65, 43S,3T6.

Among the causes for this constant and uni
form s,rinkage IN this fund may be mentioned
the great falling Oft OF exports under the oper-
alton of the tariff law until recently in force,
which crippled our exchange of commodities
with foreign nations, and necessitated to some
in '' gold ' the unnatural infusion i''''' of
silver into our currency and the
increasing agitation for its free and unlimited
coinage which have created apprehension as
to our disposition or ability to continue gold
payment; the consequent boarding of gold at
home and the stoppage of investments of for
eign capital, as well as the return OF our Sc
curities already sold abroad and the high rate
of foreign exchange, which induced the ship
ment of our gold to be drawn against, as a
In consequence of these conditions the gold
reserve on the LIST day OF February 1894, was
reduced to SIS 1887 having lost more than
S3l, 10000 during the preceding nine months
or since April, 1893.
The president then gives the history of the
two first bond sales, but says that in both
cases disa .,pUintment was the result the re-
serve after botn sales becoming depleted in the
same old way until in February, 1895, the re-
serve had fallen in $4l, $40 Isl. He also tells of
his application to congress for authority to
issue low interest bond which met with
refusal
End of Gold Payments Imminent.
In February 1895, therefore, the situation
was exceedingly critical. With a reserve peril.
everything indicated that the end of gold pay.
ment was imminent The results of prior bond
Issues had been exceed gly unsatisfactory anu
the large withdrawal Of gold immediate.
ly succeeded their public sale IN open IN arket
gave rise to reasonable suspicion that a lar 20
part of the gold paid ilto the treasury upon
the presentation of United States notes or
treasury notes and found its way to the hands
with 1t in the purchase of bonds. In
this emergency. and In view OF its surrounding
perplexities, II became entirely apparent to
those uyon whom the struggle for safety was
devolved not only that our gold reserve must,
for the third time in less than thirteen month,
be restored by another issue and sale OF bonds
to the purpose, but that plcn must be adopted
for their disposition promising better results
than those realized on previous sales.
The Celebrated Bond Syndicate.
An agreement was therefore made with q
number Of financiers and bankers whereby it
was stipulated that bonds described in the re-
sumption act OF 1877, payable In coin thirty
years after their date, bearing interest at the
ing to about So, 900 UO. should exchan ed for
gold, receivable by weight, amounting to .
This gold was to be delivered in such install
ments as would complete its delivery within
about six month from the date Of the contract,
to be furnished from abroad. It
was also agreed by those supplying
this gold that during the continuance Of the
power protect the government against gold
Withdrawals. The contract also provided that
II congress would authorize their issue, bonds
payable by their terms In gold and bearing in
terest at the rate Of per cent. per annum
might within ten days be substituted at par
for the per cent bonds described in the agree
ment.
On the day this contract was made its terms
were communicated to congress by a special
executive message in which IL was stated that
more than $l6,OO0.00 would be saved TO the
government IL gold bonds bearing 3
per cent. interest were authorized to
be substituted for those mentioned In
"a Thu In ad ~,
grant the necessary authority to secure this
saving. the contract, unmodined. was carried
out, result ing In a gold reserve amounting to
el07 ,51l, 30 on the 9Th day OF July 1880. The
performance Of this contract not only restored
the reserve, but checked for a time the with
drawals OF gold and brought on period Of re-
stored confidence and such peace and quiet in
value 10 every interest that affects our people
have never had the slightest misgving con-
corning the wisdom or propriety Of this
rangement and am quite willing TO answer Tor
my full share of responsibility for its promo
ton.
Withdrawals Of Gold Begin Again.
Though the contract mentioned stayed for a
time the tide of gold withdrawal its good re-
suits could not be permanent Recent with
657 30 on the sth day OF July, 1925, to $40, $780,
s66. How long viii IL remain large enough to
render its increase unnecessary is only mat.
Ger of conjecture. though quite large with
drawas for shipment in the Immediate future
are predicted in well-informed quarters
About $l6,WOOOO was withdrawn during the
month OF November.
ditions develops the fact that after increasing