The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1896-06-10
Secretary Carlisle Makes Reply
to the Senate Committee.
ISSUE AND SALE OF BONDS
Reviews the Conditions Which
Led to the Three Issues.
BOND SYNDICATE CONTRACT
Mr.. Carlisle Thinks That the Price
Obtained Was as High as Pos
sibIe Un6er the Existing
Circumstances.

sioie Onoer the Existing
Circumstances.
Washington, June 9.-Secretary Car
isles reply to the subcommittee of
the Senate Finance committee. charg-
ed with the investigation of the sale
Of United States bonds during the
years 1894, 1895 and 1896, was made
public to-day. The statement is dated
June 1st
Reviewing the conditions which led
to the bond issues the Secretary says:
Largely on account of apprehen-
sions in this country and abroad as to
the ability of the government to con-
tinue the currency redemption of notes
in gold coin and maintain the parity
of the two metals, the exports of gold
during the fiscal pear 1898 reached
the unprecedented amount of S10S,-
680,S44 nearly all of which was with
drawn from the public treasury by
the presentation of notes for redemp-
ton.
Notwithstanding the most strenu-
Gus efforts by the department to main
tain the 100000, 900 reserve in tact on
the 22nd day of April, 1893 it became
necessary to use a part of it for re-
demption purposes. Very little gold
was being received on account of dues
to the government to the issue and
sale of bonds, under the authority
conferred by the resumption act"
The Secretary then refers to the
bond call of Jan. II, 1894, which netted
the government $5S,660,917. From
that date to Nov. IA, 1894, when the
free gold in the treasury was $61,868,-
374. the amount varied but little. The
Secretary then continued:
"In the meantime the frequent pre-
sentation of notes for redemption In
gold by individuals and institutions
not desiring it for export clearly lndI-
Gated the existence of uneasiness in
the public mind while foreign eX-
change was almost constantly at or
near a rate which made it necessary
to export gold to poy bills at their
maturity and consequently withdraw
ais for shipment were daily threaten
ed. AS the season was approaching
when large expectations nearly always
occur il was considered absolutely ne
cessary for the maintenance of the
nublic credit and the continued execu-
tion of the monetary policy declared
nv Congress in the act of July IA, 1890,
and renealed in the act of Nov. /, 1898,
TO resort again to an issue of bonds.
The terms and result of the second
bond issue is then stated. Secretary
Carlisle saws: 81 soon became evident
that the transaction had not been Ell
fectual to stop Withdrawals of gold
These lhrge Withdrawals were due
-1.-.+ 0OIIIU he as
certaine,d. to a feeling of apprehen-
sion in the public mind and especially
among the holders of our securities
abroad. which increased i'm intensity
from dav ITO day until 1T reached the
proportions of panic in the financial
centers, and it was evident that, unless
effectual steps were promptly taken 10
check the distrust, the government
would be compelled Within few DAYS
to suspend gold payments and to drop
to a silver ana paper standard. Inc
situation was so grave that the aCteh-
ton of Congress was called to the SUD
iect on the 2Sth of january 1875.
After freely quoting from this mes
sage the Secretary says that Congress
having failed to pass any measure for
the relief of the Treasury, or TO take
any action calculated to allay the serl-
Gus apprehensions then existing IN THE
public mind, a contract was entered
into on February Sth, 1895, with Au-
gust Belmont SC Co, of New YORK;
y. NJ. Rothschild d Sons, of London,
and j. =. Morgan & Co., for the pur-
chas of 3,50O.O00 ounces of standard
gold at the pl'ice of $l7,4441 per ounce,
to be paid for i'm United States 3O-year
Il loo, lNnv,
half of the gold was to be procured
abroad and the parties agreed so far as
lay i'm their power to exert amy imam
cial influence and make all legitimate
efforts to protect the Treasury against
the withdrawal pending the complete
performance of the contract.
The Secretary quotes from the Pres
ident's message sent to Congress inn
mediately ON the execution of the con-
tract in which he again calls attention
to the financial condition of the Treas
ury.
The agreement to protect the Treas
ury gold, the Secretary says, was faith
fully carried out and he adds:
After a large part of the gold had
been furnished from abroad the Sec
retary, in order to prevent disturbances
in the rates of foreign exchange at a
critical period, and create a condition
which would force gold EXPORTS and
consequent Withdrawals, acquiesced in
a departure from the literal terms of
the contract requiring one-half of the
coin to be procured abroad, and accep-
ted deposits of gold then held in this
country so complete delivery.
Withdrawals of gold again set in and
on December 2, 1895, the President
againn sent a special message to Con-
gress asking remedial legislation, but
none was enacted and on January 6.
1896, circular was issued asking for
subscriptions for $100,00O,O00 four per