Audubon Republican. [volume] (Audubon, Iowa) 1894-1925, 1895-12-05

apprehension as to our disposition or abil-
fty to continue gold payments; the conse-
quent boarding of gold at home and the
stoppage of investments of foreign capital,
as well as the return of our securities sold
abroad; and the high rate of foreign ex-
change, which induced the shipment of our
gold to be drawn against, as matter Of
speculation.
Bond Issues Necessitated.
In consequence of these conditions. the
gold reserve, on the LIST day of February,
1894, was reduced to $65, 1891, having lost
more than $31, 1000 during the preceding
nine months, or since April, 1893. Its re-
manner of accomplishing 1t being possible,
resort was had to the issue and sale OF
bonds provided for by the redemption act
sold, yielding $5SG33, III, which was add
ed to the 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, 1894, at the sum of $107,-
446,S02. Its depletion was, however, i'm
on the 30th day of June, 1894. it had fallen
to $64,S73,025, thus losing by Withdrawals
more than, $42,oOO,oO0 in five months, and
dropping slightly below it's situation when
the sale of $50, 900, 900 in bonds was effected
for its replenishment.
This depressed condition grew worse,
and on the oath day of November, 1884, our
gold reserve being reduced to So, 669, 7O1, 1t
became necessary to again strengthen IT.
This was done by another sale of bonds,
was realized $685. 500, with which the
-und was increased to Sill, IA, 021 on the 4th
day of December, 1894
Congress Refused to Act.
Again disappointment awaited the anxi-
GUS hope for relief. There was not even
lull in the exa5perating Withdrawals of
gold. On the contrary, they grew larger
and more persistent than ever. Between
February. 1895, period of scarcely more
than two months after the second rein
forcement of our gold reserve by the sale
of bonds. it had lost by such withdrawals
more than $4,000 Goo, and had fallen to
s41, 340,1S1 Nearly $3.50 GOO had been with
drawn within the month Immediately pre-
ceeding this situation. In anticipation of
impending trouble, had on the 28th day
of January, 1895, addressed q communica-
ton to the congress fully setting forth our
difficulties and dangerous position, and
earnestly recommending that authority be
given the secretary of the treasury to is
sue bonds bearing low rate of interest
payable by their terms in gold, for the pur-
pose of maintaining a sufficient gold re-
serve, and also for the redemption and
cancellation of outstanding United States
notes and the treasury notes issued for
the purchase of silver under the law Of
1890. This recommendation did not, how
ever, meet with legislative approval.
Another Emergency.
In February, 1895, therefore, the situation
was exceedingly critical. With reserve
perilously low and a refusal of congress
sional 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 reasonable
suspicion that large part of the gold
paid into the treasury upon such sales
was promptly drawn out again by the
presentation of United States notes or
treasury notes and found it's 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 sur
rounding perpleXities, it became entirely
apparent to those upon whom the struggle
for safety was devofved not only that our
gold reserve must, for the third time in less
issue and sale of bonds bearing high rate
of interest and badly suited to the purpose,
but that plan must be adopted for their
disposition promising better results than
those realized on previous sales.
The Syndicate Agreement.
An agreement was therefore made with
a number of financiers and bankers where
by it was stipulated that bonds described
coin 80 years after their date, bearing in
terest at the rate of four per cent. per an
mum, and amounting to about $620OO,000,
by weight, amounting to little more than
65,000,C00. This gold was to be delivered in
such instruments as would complete its
delivery within about six months from the
date of the contract, and at least one-half
of the amount was to be furnished from
abroad. 1t was also agreed by those sup
plying this gold that during the contfnu-
ance of the contract they would by every
means in their power protect the gov
eminent against gold Withdrawals. The
contract also provided that If congress
would authorize their issue. bonds payable
by their terms in gold and bearing interest
at the rate of three per cent per annum
might within ten days be substituted at
par for the four per cent. bonds described
In the agreement.
Thinks Disaster Was Averted.
On the day this contract was made it's
terms were communicated to congress by
q special executive message, in which IL
was stated that more than 100000 would
he saved to the government If gold-bearins
bonds bearing three per cent. interest were
authorized to be substituted for those men
toned in the contract. The congress hav
ing declined to grant the necessary author
ity to secure this saving, the contract, I'M
gold reserve amounting to $107, 81, 23O on the
Sth day of July, 1855. The performance OF
this contract not only restored the reserve,
but checked for a time the Withdrawals of
gold and brought on a period of restored
confidence and such peace and quiet in
business circles as were of the greatest pos
sible value to every interest that affects
our people. Thave never had the slightest
misgiving concerning the wisdom or pro-
priety of this arrangement, and am quite
sponsibility for it's promotion. / belieye it
averted disaster, the imminence of which
was fortunately not at the time generally
UNDERSTOOD Dy our people,.
Good Results Not Permanent.
Though the contract mentioned stayed
for a time the tide of gold withdrawal, it's
good results could not be permanent Re-
cent Withdrawals have rduced the reserve
from $1O7 571 ,230 on the Sth day of July,
1895, to SO, 1873, 966. How long it will remain
large enough to render its increase unnec-
essary is only matter of conjecture, though
quite large Withdrawals for shipment in
the Immediate future are predicted in we'll
informed quarters. About 600 has
been withdrawn during the month of No
vember
The foregoing statement of events and
conditions develops the fact that after in
creasing our Understanding bonded in
debtedness more than $162 100000 to save
our gold reserve, we are nearly where we
started, having now in such reserve &c.,
333, 966, as against $65, 1887 in February
1894. when the first bonds were issued.
Though the amount of gold drawn from
the treasury appears to be very large, as
gathered from the facts and figures herein
presented, it actually was much larger,
considerable sums having been acquired
by the treasury within the several periods
stated without the issue of bonds.
On the 2Sth of January, 1895, ii was re-
ported by the secretary Of the treasury
that more than STE, o00, 600 of gold had been
withdrawn for boarding or shipment dur
ing the year preceding. He now reports
that from January l, 1879. to July IA, 1890,
a period of more than III years, only little
over 900 was withdrawn, and that
between July IA. 1890, the date of the pas
"a 1e of the law for an increased purchase