The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1895-12-04


the oath day of November, 1894, our
gold reserve being reduced to $685.
701, it became necessary to again
strengthen it. This was done by an
other sale of bonds amounting to $780,
600 900. from which there was realized
SIS, 5S3, 500, with which the fund was
increased to Sill, 142,021 on the 4th day
of December, 1894.
Again disappointment awaited the
anxious hope for relief. There was
was not even lull in the exasperating
Withdrawals of gold. On the contrary
they grew larger and more persistent
than ever. Between the 4th day of
December 1897, and early in February,
1895, a 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 with
drawals more than $69,000,000 and had
fallen to Sal ,340,1 nearly S43,0OO,-
900 has been withdrawn within the
month Immediately preceding this sit
uation.
In anticipation of impending trouble,
/ had on the 2Sth, of January, 1895, adj
dressed q communication to Congress
fully setting forth our difficulties and
dangerous position and earnestly
recommending that authority be given
the Secretary of the Treasury to issue
bonds bearing a low rate of interest,
PAYABLE by these terms in gold, for the
purpose of maintaining sufficient
gold reserve. and also for the redemp-
ton and cancellation of outstanding
United States notes and the treasury
notes issued for the purchase OF silver
under the law of 1890. This recon-
mendafion did not, however, meet with
satisfaction In February, 1895, there
fore. the situation was exceedingly
critical; with a reserve perilously low
and a refusal of congressional aid,
everything indicated that the end OF
gold payments by the government was
imminent. The results of prior bond
issues has been exceedingly unsatis-
factory. and the large Withdrawals of
gold Immediately succeeding their
public sale in open market gave rise
10 a reasonable suspicion that large
part of the gold paid into the treasury
upon such sales was promptly drawn
out again by the presentation OF Una
ted States notes and treasury notes and
found its way to the hands of those
who had only temporarily parted with
it in the purchase of bonds.
TIE BOND SYNDICATE CONTRACT.
In this emergency, and in view of its
surrounding perpleXities it became en-
tirely apparent TO those upon whom
the struggle for safety was deyolved,
not only that our gold reserve must,
for the third time in less than thirteen
months, be restored by another issue
and sale of bonds bearing high rate
of interest and badly suited to the pur-
pose, but that plan must be adopted
for their disposition. promising better
results than those realized on previous
sales. An agreement was therefore
made with a number of financiers and
bankers whereby il was stipulated
that bonds described in the resump-
ton act of 1875, payable in coin thirty
wears after their date, bearing interest
at the rate of four per cent per annum,
and amounting to about S620O0,0 900
should be exchanged for gold, receiv-
able by weight, amounting to a little
more than $1,000, goo; this gold was to
be delivered in such installments as
would complete it's 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 II was alsr agreed by those
supplying this gold that during the
continuance of the contract they
would by every means in their power
protect the government against gold
Withdrawals. The contract also pro-
yided that if Congress would authorize
their Issue, bonds payable by their
terms in gold and bearing interest at
the r; per cent per annlni
might, within ten days. be substituted
at par for the four per cent bonds de-
scrifed in the agreement.
On the day this contract was made
it's terms were communicated to Con-
gress by special executive message,
in which it was stated that more than
sixteen millions Of dollars would be
saved by the government if gold bonds
bearing three per cent interest were
authorized to be substituted for those
mentioned in the contract.
The Congress having declined to
grant the necessary authority to Sc
cure this saving, the contract, unmodi-
fled. was carried out, resulting in a
gold reserve amounting to S107, 571, 23O
on the 8th day of July, 1895. The per
Torrance of this contract not only re-
stored the reserve, but checked for a
time the Withdrawals of gold and
brought on period of restored con-
fdence and such peace and quiet in
business circles as were of the greatest
possible value to every interest that
affects our people. | have never had
the slightest misgiving concerning the
wisdom or propriety of this arrange
ment and am quite willing to answer
for my full share of responsibility for
it's promotion. | believe it averted a
disaster the imminence of which was,
fortunately, not at the time generally
understood by our people. Though
the contract mentioned stayed for a
time the tide of gold Withdrawals its
good results could not be permanent.