The record-union., 1895-12-04

demanded, because by such discrimina-
ton in favor OF the sold dollar, the So
called parity of the two metals would be
| destroyed, and grave and dangerous
consequences would be precipitated by
afIlrmlng or accentuating the constant
iy widening disparity between their act
ua1 values under the existing ratio
1t thus resulted that treasury notes
issued in payment of silver purchases
under the law of 1890 were necessarily
treated as gold obligations at the OPP
tfon of the holder These notes or the
lst day OF November, 1893 when the
law compelling the monthly purchase
of silver was repealed, amounted to
more than S155 100000 The notes OF
this description now outstanding, added
to the United States notes still undi1nin-
ished by redemption or cancellation.
constitute 4 volume of gold obhga-
tions amounting to nearly $500 000 600
These obligations are the instruments
which, ever since we have had n gold re-
serve have been used to deplete this re-
serve. which had fallen in April, 1898,
to S91 oil $50. It has from that time to
the present, with very few and un1m-
pOrtant upward movements, steadily
decreased, except that it has been tenn
porarily replenished by the sale of
bonds.
Among the causes for this constant
uniform shrinkage in this fund may be
mentioned the great falling off Of eX-
ports under the operation of the tariff
law until recently in force, which GRIP
pied our exchange of commodities with
foreign nations and necessitated to
some extent the payment of our bal
ances in gold, the unnatural infusion
of silver into our currency and the in
CreaSing agitation for it's free and un-
limited coinage, which have created
apprehension as to cur disposition or
ability to continue gold payments. The
| consequent boarding of gold at home
and the stoppage of investments of
foreign capital. as we'll as the return of
our securities already sold abroad, and
the high rate of foreign exchange
which induced the shipment of our
gold to be drawn against, is a matter
| of speculation.
STATING THE ISSUE.
In consequence of these con-
ditiOns the sold reserve on the first
day of February, 1894. was reduced to
$63. .43S, ,317, having lost more than SOL
100000 during the preceding. nine
months, or since April, .-e5. It's re-
Punishment being necessary and no
other manner of accomplishing 1t being
possible, resort was had to the issue
and sale of bonds provided for by the
Resumption Act of 1919. Fifty mill
ions of these bonds were sold, yielding
reserve fund of gold then on hand. AS
| a result of this operation this reserve,
| which had suffered constant and large
| Withdrawals in the meantime, stood, on
| the 9Th day of March, 1891. at the sum
| of S107, ,446, 500 It's depletion was,
however, Immediately thereafter so ac-
| CELEBRATED that on the Both day of June,
| 1894, it had fallen to $64.S13,023, thus
| losing by Withdrawals more than ST.
| 600, 600 in five months, and dropping
| slightly below its situation when the
sale of $50, 100000 in bonds was af-
fected for its replenishment. This de-
pressed condition grew worse. and on
the 24th day of November, 1894, our
gold reserve being reduced to S57 .669,-
701, it became necessary to again
strengthen it. This was done by an
other sale of bonds, amounting to $50
Q00,000, from which there was realized
| SOS, J3S 600, with which the fund was
| increased to Sill ,142, 021 on the 4th day
of December, 1884.
| EXASPERATING WITHDRAWAL
OF GOLD.
| Again disappointment awaited the
anxious hopes for relief. There was
not even a Iull in the eXasperating
Withdrawals of gold; on the contrary,
| they grew larger and more persistent
| than ever. Between the 4th day of De-
| cember, 1894, and early in February,
| 1895, period of scarcely more than
| two months after the second reinforce
ment Of our gold reserve by the sale Of
| bonds, it had lost by such Withdrawals
more than 500 600 600, and fallen to
| &41 34Q 161. Nearly $4,000 600 had
| been Withdrawn within the month inn
mediately preceding this situation.
In anticipation of pending trouble, I
had, on the 29th day of January,
| 1S0J addressed a communication to
| Congress fully setting forth our diff
culties and dangerous position. and
| Earnestly recommending that authority
| be given the Secretary of the Treasury
| to issue bonds bearing a low low rate o9
| interest payable by their terms in gold.
! for the purpose of maintaining a sufii-
cient gold reserve and also for the re-
dempti0n and cancellation of outstand-
| ing United States notes and the treas
ury notes issued for the purchase of
! silver under the law of 1890. This
recommendation did not, however,
meet with legislative approval.
| In February, 1895. therefore, the stu
| alton was exceedingly critical, with q
reserve perilously low, and a refusal of
Congressional aid everything indicated
| that the end of gold payments by the
Government was imminent. The re-
suits Of prior bond issues had been ex-
ceedingly unsatisfactory, and the large
Withdrawals of gold Immediately sue
CGGQlnS tneT puDuC SAFE III open mar
ket. gave rise 10 a reasonable suspicion
that a large part of the gold paid into
the treasury upon such sales was
promptly drawn out again by the pre-
sentation of United States notes or
treasury notes, and found its way 10
the hands of those who had only tenn
porarily 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
ard sale of bonds bearing a high rate
of interest. and badly suited to the pur-
pose, but that a 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 bank
e!s. whereby it was stipulated that
bonds described in the Resumption Act
Cf 1870 payable thirty years after their
CVTD 70