The evening herald. [volume] (Shenandoah, Pa.) 1891-1966, 1896-06-10
BOND INVESTIGATION
Secretary Carlisle Reports to the
Senate Subcommittee.
NECESSITY FOR RECENT ISSUES
The Large Exports of Gold, which Began
in 1898, Reduced the Reserve Fund Early
in 1894 to 500, 757 ,saI-A Formidable
Army pf Tiuuras

i'm 1898, Reduced the Reserve Fund Early
in 1894 to 500, 757, ,s21-A Formidable
Array of Figures.
WASHINGTON, June 1O.-Secretary Car
isles report to the subcommittee on the
senate finance committee charged with the
investigation of the sale of United States
bonds during the years 1894, 1895 and 1896
is just made public. Reviewing the con-
ditions which led to the bond issues the
secretary says:
Largely on account Of apprehensions
in this country and abroad as to the abil-
ity of the government to continue the cur
rent redemption of its notes in gold coin
and maintain the parity of the two metals
the exports of gold during the fiscal year
1898 reached the unprecedented amount
of S10S CSC, ,S44, nearly all Of which was
withdrawn from the public treasury by
the presentation of notes for redemption.
During the three months next preceding
March Z, 1898, when 1 assumed control of
this department., the Withdrawals of gold
from the treasury amounted to S35, 1858, ,O93,
and during the eight months next sue
ceeding that date Withdrawals amounted
to $50, ,697, ,219 while the exp orts amounted
to $50 ,959, 500
"These Withdrawals and shipments be-
gan on a large scale in June, 1892, and con-
tinued with only short periods Of inter
mission until the close of the fiscal year
1898. On Dec. 81 1892, the free gold in the
treasury amounted to Sl21, ,266, 662 20, and
on the 2Sth of February it had fallen to
Sl03,2 ,2lS9. The reserve fund would
have fallen below SlOO,OOO,OOO before
March 1, 1898, if my predecessor in office
had not effected arrangements in January
] M ~Nxrti ht of ph
s., ,25O,OOO in gold was procured from cer-
tain bankers at New York in exchange for
United States notes and otherwise.
Notwithstanding the most strenuous
efforts of the department to maintain the
! $780, 900 reserve intact the presentation
of notes for redemption to procure gold
| for shipment abroad co ntinued to such an
extent that on April %, 1898, for the first
| time since the fund was established, 1t be-
came necessary to use part Of it for redemp-
ton purposes, and it was reduced to S95-
| 49,, ,357 and was reduced on Jan II, 1894,
to 500, ,757, 1924
'The cash balance then in the treasury,
excluding the current liabilities, but in
Guiding the gold reserve and all subsidiary
and minor coin was only SS3, ,96l, ,4O2 Very
little gold was being received on account
of dues to the government, and it was
| therefore impossible to increase the re-
serve without resorting to the issue and
sale Of bonds under the authority confer
red by the resumption act. The call of
! Jan. II, 1894, for an issue of S50,OOO,OOO
| brought to the treasury S5S,66O,9l7.
"On March 6, 1894, after this sale had
been completed, the free gold amounted
to SlO7, ,446, 1902, and after falling to So, 1S9,
500 on Aug. 7, 1894, it was slowly replen-
ished by voluntary exchanges of gold
coin for United States notes and other cur
rency by the banks, and by small receipts
of gold in the payment of dues to the gov
ernment, until Nov. II, 1894, when it
reached S61 SIS, ,374. In the meantime the
frequent presentation Of notes for re-
demption in gold by individuals and in
stitutons not desiring it for export clearly
indicated the existence Of uneasiness in
the public mind. And as the season
was approaching when large eXporta-
tions nearly always occur it was consid-
cred absolutely necessary for the main
tenance of the public credit and the CON
tinued execution Of the monetary policy
declared by congress in the act of July ii,
1890 and repeated in the act of Nov. l,
1898 to resort again to an issue of bonds
'Public proposals accordingly were is
sued for the sale of additional per cent
ten year bonds to the amount Of S50,0O0,
600. There were 1856 bids received, amount
ing to Sl7S, ,S36 05O, nearly all of which were
at rates which would yield to the investors
per cent. or less One bid for the whole
sum of $4,000, 900, all or none, upon the
basis of 2S7S per cent, being the most ad-
vantageous offer for the government that
was made, either singly or by aggregating
the separate bids, was accepted.
"The payments into the treasury on ac-
count of this sale, amounting to sos, ,53S,
800, were not entirely completed until after
Dec 1, 1894, and it soon became evident
that the transaction had not been effectual
to stop Withdrawals of gold, and ON the
Sth of that month the reserve had been re-
duced TO S4l, $40, lS1 The situation was so
grave that the attention of congress was
called to the subject by a special message
from the president
Congress having failed to pass any
measure for the relief of the treasury or to
keep any action calculated TO allay the
serious apprehensions then existing in the
public mind, contract was entered into
on Feb. s, 1895, with August Belmont &
Co of New York, on behalf of themselves
and \. NJ Rothschilds Sons Of London
and J. p, Morgan & Co. of New York, on
behalf Of themselves and J. ), Morgan &
20, oil LOuOOlli lOF uue JutCutlot u OiOuu1OuO
ounces of standard gold at the price of
S17.SO441 per ounce, to bepaid for in United
States thirty year per cent. bonds"
Withdrawals Of gold again set in, and
on Dec ?, 1895, the president again sent a
special message TO congress asking rene
dial legislation, but none was enacted, and
on Jan g. 1896 circular was issued ask
ing for subscriptions for 500, 100000 per
cents Of the same character as the others.
The bids for the loan numbered 4,641 and
aggregated S6SS, ,OO0 900, of which $3.50, $50,
COO coming from irresponsible parties was
thrown out. The total proceeds of the
sale, exclusive of interest, were Sill 166, ,232.
Il know of no method by which the
market price of S50,0OO,0O0 or 100000, OO0
in bonds, all put on the market at the
same time and to be paid for in gold, can
be ascertained except by offering them for
sale TO the public at large or by negotia-
ting with capitalists here and in other
countries who are acquainted with the
value of such securities and are in the
habit of dealing in them,
''In relation TO that part Of the resolu-