Evening star., 1895-02-09
THENEW Glo!oV'Ie=RNMENTLoA 3 i
Not Bond Sale for Gold, but a Purchase
of Gold Payable in Bonds
How the Contract Was Made - The
President Thinks 1t Will Restore
Public Confidence.

The new government loan privately nego-
tiated by the Secretary of the Treasury
and a syndicate of bankers, strictly speak
ing is not a sale of bonds for gold, but a
purchase Of gold with payment In bonds.
AS stated by the President, the issue of
bonds will not be made under the author
ity granted by the resumption act, but
under section 300 Of the Revised Statutes,
which reads as follows: 1.-THE Secretary of
the Treasury may purchase coin with any
Of the bonds or notes Of the United States,
authorized by law, at such rates and upon
such terms as he may deem most advan-
tageous to the public interest"
The Official Memorandum.
An official memorandum in regard to the
bond issue has been given out at the Treas
ury Department, as follows:
1.-THE contract was made with August
Belmont & Co. Of New York, on behalf OF
Messrs. N. M. Rothschild & Sons of Lon
don and themselves, and j. p. Morgan &
Co. Of New York on behalf Of j. s. Morgan
& Co. of London and themselves, and pro-
vides for the delivery to the United states
of 100000 ounces Of standard gold coin OF
the United States to be paid FOR In United
States per cent bonds. large number
of other banks and financial institutions
are interested in the transaction, but
their names are not mentioned In the
contract itself. The department does not
know in what proportions the various
parties are to furnish the gold coin
or receive the bonds, as this is mat
ter for arrangement between themselves.
BY the terms Of the contract the parties
are to bear all the expenses or bring
ing the gold from abroad: Another stipu-
lation of great Importance Is that Messrs.
Morgan and Belmont agree to exert all
their financial strength and influence, anu
that OF their associates at home and abroad,
tO the against WITHDRAWALS
of gold pending complete performance OF
the contract. No bonds are to be delivered
except in payment for gold actually de.
liyered. In view of the possible failure Of
legislation in Congress negotiations have
been pending for some time here and
abroad and the terms Of this contract are
the best that could be procured with a coin
bond"
VIII Restore Public Confidence.
1t is given as the Presidents opinion that
the present bond issue will so far restore
public confidence at home and abroad that
any other Issues will be unnecessary. at
least until the meeting Of the next Con-
gress in December. If. however, 1t should
become necessary. the President 1T is said,
will act as promptly as may be to pro-
tect the public credit. 1t is also said
to be confidently expected by the President
that this issue will render an extra session
of Congress wholly unnecessary 1t was
I
present loan $1QO OOO, co., and this amount
was for some time insisted upon by the
London bankers. but after much delibera-
ton. the President, concluded that the
amount finally agreed upon would probably
amount. Recently he stated to Messrs.
Morgan and Belmont that as s.5oo,oO
ounces of gold would place our reserve
above the s1O0,QO.O0O point, he would not
consent to purchase a greater amount.
There ia said to be no provision In the con-
tract oblgating the government to dispose
of any future issues to Messrs. Morgan
and Belmont or to any one whomsoever,
ror was there any specific or implied un-
derstanding to that, effect. 1t Is under
stood that the gold called for by the terms
of the agreement will be shipped from
London at the earliest day practicable. The
agreement on the part of Messrs. Morgan
and Belmont to use their best endeavors
to prevent gold from being withdrawn from
the treasury is understood to mean that no
part OF the gold bargained for will. either
directly or indirectly. be taken from the
treasury. Therefore it is believed that the
reserve will be augmented by the full
amount of gold purchased.