The herald., 1896-06-10
THE CAUSES AND RESULTS
Set Forth Ia the Secretary's Usuai Forci.
bic Style
~. ess.ct n Each Sale Was to Restore Con-
fidepce In the Honssty Of the
Government
4 Associated Press Special Wire.

Reviewing the conditions which led
to the bond issue, the secretary says
ssLargely on account of the appreneh-
sion incurred as to the aDllity OF the soN
eminent to continue the currency re-
demption of it's notes in gold com ana
maintain the parity of the two metals,
the exports of gold during the fiscal year
Of 1899 reached the unprecedented
amount Of s10S, ,6s0,S44, nearly al OF
which was withdrawn from me pupilc
treasury by the presentation OIL ho'eS
for redemption. . u.ro,u
ous efforts by the department to main
tain the 500 O00, 900 reserve intact, on the
22d dav of April, 1898, 1t BECAME neces-
-o-v ~ nee a part of it for redemption
purposes. ,o-
every little gold being re,eivedon ac-
count Of the duties of the government
A. was therefore impossible to increase
me reserve without resortintg to the ISSUE
nmd sale of bonds under the authority
conferred by the resumption act,
The secretary then refers to the bona
,c1i cF January II, 1894, which netted
~ covernment SIS, ,660,917. From that
date to November IA, 1894, when the tree
Kold in the treasury was S0I oIe,oss, INC
1mount varied but little. The secretary
continues: .,t ,ro-
..r+o t,on of notes for redemption IN golu
by individuals and institutions NO. u
.;r,r0 it for exportation clearly lhdl-
Gated the existence Of uneaslness IN tne
nublic mind, while foreign excnanse
was almost constantly at OF near a'S "a.
wbich made it necessary to export golo
- nov hills at their maturity. and conse-
r,,enfIv Withdrawals for Shipment were
5ailv threatened AS the season ap-
nroached when large exports nearly d
1revs occur. it was considered absoiuteiy
necessary for the maintenance VI ee
nublic credit and the continued eAsIu.
fion of the monetary poicy uecianeu lsao S ~
coneress in the act of July IA, 1881 anu
~oneaieG In the act of Nivenaber Is, 1885,
to resort again to the issue OF oonos.
rha terms and result OF the secono
bond issue are then stated.
Secretary Carlisle says.
sIt soon became evident that the tran-
saction had not been ehectual 10 sup
9he withdra,vals of gold. These large
r,,tbdrawals were due almost entlreiy
60 far q coul be ascerta1ned, 10 leei-
ING Of appreh ension in the public nina,
ana especially among the holders OF our
securities abroad, which increased IN III
tensity from day to day until IL reacheo
the proportions OF panic IN tne ntian
cial centers, and it was evident tnat un-
less effectual steps were promptly taken
10 check the growing distrust, the gov
erpment would become compelled With
in a few days to suspend solo pay
ments and to drop to silver ana paper
standard. The situation was SO grave
that the attention of congress was calied
To the subject on the 2Sth of January,
After quoting frtpm this message the
secretary says the congress, haVing
failed to pass any measure FOR the relleI
of the treasury, a contract was entered
into on February 3, 1895, with August
Belmont & Co. of New York, I'M. Roth
schilds G. Sons of London and j. +.
Morgan & Co., for the purchase OF $780,
900 ounces of stand, ird gold at the price
of SIT. .S0441 per ounce, to be paid for In
United States thirty-year four per cent
bonds Not less than one-half of the
gold was to be produ red abroad and the
parties agreed so far as lay in their
power to exert any financial influence,
to make all legitimate efforts to protect
the treasury against the withdrawal
pending the complete performance of
the contract"
The secretary quot es from the presi-
dents message sent to congress immedi-
ately upon the execut on of the contract
in which he again Calls attention to the
financial condition. The agreement to
protect the treasury iyold. the secretary
SAYS, was faithfully arried out and he
adds:
After large part of the gold had
been furnished from abroad the secre-
tary, in order to prevent disturbances
in rates of foreign exc ha.nge and create
a condition that would force gold ex-
ports and consequent Withdrawals, ac-
quiesced in a departure from the literal
terms of the contract req uiring onehalf
to be procured abroad a. Id accepted de-
posits of gold then held in this country
to complete the delivery.
Withdrawals of gold a gain set in and
on December 9 1895 the president again
20 G, oyly
dial legislation; none was enacted and
on January 6, 1895. a circular was is
sued asking for subscriptions for $780,
900 900 four per cent bonds.
TheSecretary says:
MY opinion is that the prices re-
eived by the government for bonds in
1894, 1895 and 1896 We're as high as it
was possible to obtain under the cir
cumstances existing at the time when
the sales We're made. The fact that the
bonds are offered for sale by the gov
eminent only at times when the flnan-
cial affairs of the country are greatly
disturbed and the market more or less
depressed on account of business feel
ing and insecurity, which always pre-
walls at such periods among investors
necessarily prevents the realization of
as good prices as might be procured If
advantage could be taken of the most
favorable opportunities for effecting
the sales
The same conditions which make the
issue of bonds necessary also depress
the price of such securities in ali the
markets of the world and consequently
the government is compelled to make its
sales under the most unfavorable cir
cumstances
In relation to the part of the resolu-
tion which directs the committee to in
vestigate and report what effect the
bond sales had on the credit and business
of the people of the United States. / have
the honor to say that in my opinion he
sales were necessary for the preservation
of the credit of the government and the
security of the business interests of the
people and that they in fact ACCOMPLISH
ed those results
In general the effect of each sale was
TO restore confidence for the time being
at least, in the power and purpose of the
government to maintain its own credit
10 preserve the parity of our coins and
the value of our currency, to check tha
return of our securities in large amounts
from European countries for sale in the
markets here" '-'e
In Her o3d Year
Probably the Oldest person 1iyipcr :.