Omaha daily bee., 1896-10-16
BANKS AND THE GOLD RESERVE
Assistant Secretary Curtis Explains the
Movements of the Metal.
IDEA OF "RAlDS" ON TREASURY RIDICULEO
Letter Detailing the Operation of
business Laws Governing the
Imports and Exports and
Rates of Exchange.

rotary W. Il. Curtis OF the treasury Depart
ment has written a letter to Assistant Sec
rotary Dabney of the Agricultural depart
ment in which he defends the New York
bankers from the allegations often made
that they are interested in the withdrawal OF
gold from the treasury. Here is the letter.
Hon Charles w. Dabney Jr. Assistant
Secretary of Agriculture: Dear Sir-lte-
fcrring to your letter and our conversation
of Yesterday, concerning the campaign at
taCl<s upon the bankers of New YORK IN
their relations with the gold reserve ! de-
sire to submit the following Tor consldera-
ton:
York upon the treasury Is one frequently
used by writers and speakers who have
no accurate knowledge or the method by
which notes are presented FOR redemption
Mt the subtreasury in New York or the
character or number of persons making
such presentation. The term banker seems
to be assumed In most cases to cover
class of men who are apparently engaged
in withdrawing the gold from the govern
ments reserve and putting 1t away IN their
private vaults for their own selfish pur-
poses and to accomplish certain alleged
Improper objects. The facts In the case
are so different from these fanctful state,
ments that 1t seems worth while to call
attention to them.
by operation of certain natural CONNER
ciai laws without the Interference OF
legislation, New York has come to be the
settling place Of almost all contracts for
the sale of our products abroad and in that
sn,, nroducts cUnortcd are offered for
sale At the same time peopIc desiring to
remit money abroad to pay obligations or
10, I'D In nrdrr IN nav tbcir oblira lions
purchase these bills of exchange to re-
nit to their creditors abroad Large
amounts or coffee silk rice tea and sugar
ana other foreign nroducts consumed here
have to be purchased with foreign credits
Tnrai,,n avrhnnpn. Tho natural result Is that
when we are selling more goods abroad
The market than there Is demand for
witch is The case nj nrcscnt Inc price of
"xcbnpTo fnlls ON The Other hnnd when
We are NOT selling MS much abroad and are
Snyinc more or Arc nnying our dabts TO n
grSater extent abroad the price of ex-
Change rises
,rrIn1,I, -, ,es,,e on, n,>,,ys
iHh.T Oi'ASS.9 W DAMS
The people engaged in the banking bust
ness in New York may be divided into
three classes:
]. The ofiicers or the regular banks OF
deposit, or issue, including the national
banks.
.. The dealers I'm securities, some of whom
have foreign connections through whom
they market large amount of securities
amount of securities sold abroad and to
whom they remit exchange or gold in pay
ment for securities sold here.
J. Agencies or branches of foreign houses
who are perhaps also dealers in securities.
but whose main business Is buying and
selling exchange on Europe for the profit
which can be made in the operation itself
The first class are especially Interested in
the general prosperity OF the country and
In Keeping up the value OF securities, be
cause n there Is fall In securities held
by them as collateral they are compelled
ro To,, ~ M 'o"ns, Mhlcn
their profits, prevents them from discount
ING conmcrcinl MINOR restricts marcoptiis
and Industrial crtorpriscs and In The end
Crentes failures in husinoss ond gcrcrai
financial and commcrcioI distross
The second class arc d,ractiv Interested
countrv witch thnv have inrrciy sid
abroad, and their interests are to avoid gold
infs from a reduction of thn rnId reserve
The third cInss hnv or Sell eXrbongc
whenever an opportunity for profit Offers
If there are few commercial hills "a he
had in the market and The demand NV re-
mitters is great exchange rates rise and
r. deaiors bba,'in ra,ii, hraaJ AZ an, Inu
ibew cop s n',h hi, 'ITT npro1d ma that
than The nrobahle cost of ,yi,t7r1 IN, PnIS
from the treasury and shining abroS,S 90 70
thus making n nroGt on t6e tro y,sa uo 80
The LEADING members Of the tbird cios,
in New York can be numberc1 on Tho mas MS
gers Of hon h"n5S onJ q, Co., CO.. ga nm IN iti.
Four do Almost ali ~ tho ~ IRE OF
gold for eXnnrt n,,rnoses ne Iii Mts ol
~ iot ,ipT, rs VIII ne seen
oxro n ,nid ~ E Oh ,he ilSt OF parties
~ H. H. ,1,r6 Soju ~ rul oPe puohsheu IN the
sTpmant usuav T IN be Each
gate large number OF single transactions.
one concern may sell a million dollars of
scented by $50 to 200 or more different bills,
they pay their bills abroad by shipping
gold for that purpose which they draw I'm
one sum and send in one ship
MATTER or Sci FINTERESr
7. IN -
t,, VIII nus pc seen great majority OF
u nnrhtis nIe pecuhlarliE Interested In Keep
me .he reserve up 10 It's run amount, and
LOT inns reason they have been willing in
the past ana are Still willing to make con-
siderable sacrifices, and i'm order to pre-
vent shipments of gold have contributed
large amounts of money to pay the dealers
in foreign exchange the profit they would
have made by such shipments. This was
notably the case in the operation of the So
called syndicate which bought the bonds Of
the government under the contTnct of
February s. 1895 and again I'm No a,rS,
part of this summer AIthourb Uiths
drawals for eXport have bnen coira on ~ ~
several wears n is only v,tbi5S ', , oni ioI
that an npnrehonsion t6ot tb W. Ee''rs
might he IinnhIa 10 rado,, ~, a., sUpNUlHiHent
In roId bas nn' ~ iruI n lts opllsatlons
ntbS 80 r,, ,rno t"useu WITHDRAWALS Tor any
Ionr pu' p p1g ana AT no time has there
s ~. .h tnIhtnce lhat WITHDRAWAL of gold
rioii' me - trtnsurE was made for the pur-
poSS OF allecilhs the markets
The fact that the banks were able to
FURNISH az the gold required for export up |
70 the middle of the summer of 1892 and |
ana so; was because large amounts OF gold
We're being paid to them aud by them into
the treasury and paid out again in the
course or business, and 1t had not b gun to |
be displaced by the silver issues the
amount or which had not uD TO that time