New-York tribune., 1895-02-16
l.. f. CHITTENDEN SCORES CARLISLE.


DAMAGING FEATURES OF THE sEcRETARY's
CONTRACT WITH THE BANKERS.
To the Editor Of The Tribune
Sir: In reference to the contract OF February s.
which Secretary Carlisle has made with the foreign
bankers wish to say:
l. ! am certain that since the retreat Of our Army
from the Peninsula. the second Bull Run de-
feat. no event series of events has occurred so
damaging to National cred; this. In the
darkest hours O.; the Secretary Chase never
pad such enormous price. or the fourth of It,
for money. The gigantic premium paid in this con-
tract Is out of all proportion to the temporary
accommodation TO raise grave doubts of the men
tai soundness Of the Secretary who made it.
1t should be borne in mind that the rate OF inter
est on long Treasury bond ought to be not more
than 2 per cent. We settled that in 1891. when the
public offered an extension Of the bonds then
maturing at per cent and accepted the offer Moth
ing but loss OF confidence in the Democratic Ad-
ministration has since occurred TO increase this
rate.
Misfakng its cause. the Secretary has twice tried
10 stop the outflow of gold from the Treasury by
the issue of &OOo0O0O in bonds. and twice the ex-
pernent has failed. The last time the banks took
the bonds Of loyalty to the Government, and be-
fore they had time to market them the Secretary
sent one OF his impossible financial bills to Congress
which reduced the selling value of the bonds
per cent and inflicted that loss upon the purchas-
ers That fact might have been the reason why
Secretary Carlisle did not care to apply to the
banks again. but 1t no excuse for secretly
making contract with foreigners who have been
exhausting his gold. which has no parallel for
::s improvidencs.
Let subject this transaction to analysis lie
has agreed to buy 35cOOOO of gold for $1,000
600 payable in per cent thirty-year bond, or
Ss5lOlOso per cen; ihirty-year bonds These
figures pay the secretary AZ per cent premium on
his per cents and par for his threes. The va'ue
OF his fours in market the day the contract is
signed. measured by the prices OF other Govern
ments is ll9a He therefore pays to the foreigners
\ clean profit OF l9l2.ctO about N2,WWOo on
the purchase Of about So Ooo.Ooo in gold. do not
deal with the per cents for do not believe that
Congress viii authorize their issue. -
q Amazing and unprecedented as Is his proili:
y is not the half OF DIR payment The Secretary
for the next eight months. Ii is sugsr-coated by
calling 1t az option, but it is real control The
Secretary must name the price II the foreigners
regret Il; no other parties Will pay II when they
control the markets. 1t was shrewd provision for
inc ioreigners who tor reasons given hereafter
Know that another issue must soon be made II is
the to sraee M se pses ises Of to our give
g. These bonds run for thirty years. We cannot
one and three.fourths per cent extra. about two
per cent or $4,000 annually for thirty years, ag
sum Of tr!fe les than SIS. 10000
a. The foreigners know that another issue OF
-FOUR months Their agreement to bring part of
the gold from Europe amounts to nil. They cannot
tlnue until the cause is removed; or all American
securities held abroad are paid We have outstand-
which gold can be demanded over saoOOOOOOO. The
foreign holder who wishes turn his securities into
sell them for greenbacks silver certificates. which
he will present at the Treasury and receive his gold.
securities. This klnd Of transaction goes on daily
and will continue until our securities held abroad
s. Therefore although 1t may receive temporary
checks this drain will continue until Its cause 10