The Weiser signal. [volume] (Weiser, Idaho) 1890-1904, 1896-10-22
DEFENDS THE BANKERS
OFFICIALS EXPLAINS METHODS OF
THE GOLD WITHDRAWALS.
Secretary Curtis Believes Confidence
in Present Situation Is Due to
New York Bankers.

tary w. L. Curtis OF the treasury uS-
partment has written letter to Assist
ant Secretary Dabney of the agricultural
department, in which he defends the New
York bankers from the allegations OFTEN
made by those interested In the Win
drawal from the treasury. Here Is the let
ter In part:
"Hon. Charles w. Dabney-Dear sir;
Referring to your letter and our CONVEX
sation concerning the campaign attacks
upon the bankers of New York In their
relations with the gold reserve, desire
to submit the following: The term OF
raids by bankers at New York upon the
treasury is one frequently used by writ
ers and speakers who have no accurate
knowledge of the method In which the
notes are presented for redemption az
the sub-treasury 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 a class of men who are apparently
engaged in Withdrawing the gold from
the governments reserve, and putting
1t Immediately in their private vaults for
their own selfish purposes and to accom-
plish certain alleged improper objects
The facts in the case so different
from these fanciful statements, that it
seems worth while to call attention to
them.
by the operation of certain natural
laws New York has come to be the set
Ting place of almost all contracts for the
fered for sale abroad. At the same time
people desiring to remit money abroad
to pay obligations or to buy merchandise
are in the same market, and in order TO
pay their obligations purchase these bills
of exchange to remit to their creditors
abroad. Large amounts of coffee, SILK,
rice, tea. sugar and other foreign prod
ucts consumed here have to be purchased
with foreign credits. and paid for In
New York with foreign exchange. The
natural result is that, when we are sell
ing more goods abroad and there are
more bills of exchange In the market
than there is demand for, which is the
case at present. the price of exchange
falls. On the other hand. when are
not selling as much abroad and are buy
ing more or are paying our debts TO
greater extent abroad. the price of ex-
change rises
1.-The people engaged in the banking
business may be divided into three class
es First. the officers of the regular
banks of deposit or issue. including the
national banks; second, the dealers in
securities, some of whom have foreign
connections through whom they market
large amount of securities and upon
whom they draw a corresponding amount
of exchange in payment for securities
sold abroad, and to whom they remit
exchange or gold in payment for secur
ties sold here; third agencies or branches
of foreign houses, who perhaps also
dealers in securities. but whose main bus
Europe for the profit which can be made
in the operation itself. The first class are
especially interested in the general pros
perity of the country and in keeping up
the value of securities, because If there
is a fall in securities held by them as
collateral. they are compelled to call in
their outstanding loans, which reduces
their lines of credit, diminishes their
profits, prevents them from discounting
commercial paper restricts mercantile
and Industrial enterprises. and in the end
creates failures in business and general
| financial and commercial distress.
THE second class are directly interested
| In keeping up the value of securities In
| this country, which they have largely
| sold abroad, and their interests are to
avoid exports and the public apprehen-
| sion arising from a reduction of the gold
reserve.
THE third class buy or sell exchange
| whenever an opportunity for profit of
| fers. One concern may sell a million
| dollars worth of exchange in one day
| but it may be represented by $50 to POO
| or more different bills, running from
| 100000 pounds sterling upward, and they
| pay their bills abroad by shipping gold
| for that purpose, which they draw out of
| the treasury In one sum and send in one
| shipment. 1t will thus be seen that a
great majority of bankers are pecuniarily
| interested in keeping the reserve up to
| its full amount. and for this reason they
| have been willing in the past, and are
|
| order to prevent shipments of gold have
| contributed large amounts of money to
| pay dealers In foreign exchange the profit
| they would have made by such shipments.
| This was notably the case in the opera
| ton of the So-called syndicate viii, N
| bought the bonds of the government nm
| der the contract of February g. 1895 and
again in the early part of this summer.
| Although Withdrawals for export nave
| been going on for several years. II is
| N
| sion that the government might be nm
| able to redeem its obligations in gold
| has caused Withdrawals for any ofber
purpose, and at no time has there been
| any evidence that Withdrawals of gold
| from the treasury were made for the ;,rr-
| pose of affecting the markets. The fact
| that the banks were able to furnish ali
| the gold required for export up to the
ii ll h Oh tne summer OF 1892, and did SO,
| was because large amounts of gold we're
being paid to them. and by them into The
| treasury, and out again in the course of
| business, and 1t had not begun to he
| displaced by the silver Issues. the amount
OF Whlch mad not up to that time reached
| such volume to form an importa nj
portion OF the ordinary commercial tran
| sactions in the New York market
| During the past few months and at
| present, and for the first time in tbis
| administration, various factors are IN
| combination which have procured low
rates of exchange and CONSEQUENT i'm
| portations OF gold. The principal ones
are the favorable trade balance. the re-
ducuon In the volume of currency ont
| standing and in active circulation. and
| the continued high rate of interest cf
| call loans at New York, this latter ,ondi-
| ton being partly a result of the nrered-
| ing situation. The low rates for foreien
| exchange cause importatlons of roId
| from London and other foreign cities 70
| cause at these points exchange ON ,Ja1y
| YORK is scanty and rules a. nigh rates
| and the dealers and drawers mere snd
| their associates across the ocean rod
| a pront at the price at which gold can
| be obtained abroad and at which n can
be used here. In other words. those for
| eign markets are in the same condition
| the United states has been at va-ious
times during the past five years.
| 1t must not be forgotten that the .on
ndence In the situation which has nIsced
the country In its present satisfactorv
condition regarding it's gold reserve vas
| largely due to the efforts OF the bankers
| OF New York in the early summer Ths
fact OF their agreeing to furnish hills of
eNehange at rates under the gold ship
| ment point. and endeavoring to nring
about artificially that which we nov, 800.