The times. [volume] (Richmond, Va.) 1890-1903, 1896-10-18
THE TREASURY RESERVE
iHL tHfHGE or RIIDs tPON fT Br
NLW IORK BINhERs.
III The Parties Attacking These Transac-
lions Would Lxainine the Report Much
apprehension Would be Avoided.

The following letter concerning the So
called raids by bankers at New York
upon the Treasury reserve is timely
ana interesting. II was written By Hon.
W. j. Curtis, of the United States Treas
| ury department. AT the request OF lion.
@ha'ies W. DaDney Jr., Assistant score
| tdIy or Agriculture. The tcAt OF the
/ letter Is rs follows:
The term raids by bankers at New
YORK upon the Treasury is one frequent
~ used by writer's and speakers who have
/ no accurate knowledge OF the method By
| Wnich notes are presented FOL redcmp-
ton az the Subtreasufy in New York, or
the character or number Of persons max
| ins sucn presentations. The term banker
seems % be assumed in most cases 10
| cover "a class of men who are apparently
| engaged in Withdrawing the gold from
/ the GOvcsnmenfs reserve and putting IL
away IN their private vaults for their
OWN selfish purposes ard 70 accomplish
/ certain alleged improper objects. The
! facts in the case are 80 different from
/ these fanciful statements. that IL seems
worth while TO call attention TO them.
BY operation Of certain natural COM
mercial laws, without the interference Of
/ legislation. New York has come 10 be the
settling place OF almost all contracts for
the sale Of our products abroad. and in
that market the bills of exchange. which
represent products exported. arc offered
for sale At the same time. people de-
string TO remit money abroad 20 pay obli-
cations or 10 buy merchandise. are i'm the
same market. and In order 10 pay their
obligations purchase these hns OF ex-
change TO remit to their creditors abroad.
Large amounts Of coffee. silk. rice. tea.
sugar and other foreign products con-
fumcd here have 90 be purchased with
foreign credits and paid FOR in New York
with foreign exchange. The natural re-
suit is. that when we are selling more
goods abroad and there are more bills
Of exchange in tho market than there
s. demand for. which is the case at pres
emit. the price Of exchange fails. ON the
other hand. when We are not selling as
much abroad. and are bgyine more or
are paying our debts 10 greater extent
abroad the price of exchange rises
The people engaged in the banking bust
ness i'm New York may be divided into
three classes; First. the officers OF the
regular banks OF deposit or issue. includ-
ing the national banks: second. the deal
ors in securities. some Of whom have
foreign connections through whom they
market q large amount of securities and
upon whom they draw corresponding
amount OF exchange in payment for
securities sold abroad. and TO whom they
remit exchange or gold In payment for
securities sold here: third. agencies or
branches of foreign houses. who arc. per-
haps also dealers i'm securities, but whose
main business is buying and selling cx-
change on Europe for the profit which
can be made I'm the operation itself
rDf a ef
I'm the general prosperity of the country
and i'm keeping up the value Of securities.
because IL there is n fall I'm securities
held by them as collateral they are COM
PEELED 10 call I'm their outstanding loans
which reduces their lines Of credit dimin-
ishes their profits. prevents them from
discounting commercial paper. restricts
mercantile and Industrial enterprise. and
I'm the end creates failures i'm business
and general financial and commercial
distress. The second class are directly in
terested I'm keeping mp the value of securi-
ties in this country. which they have
largely sold abroad and their interests
are 10 avoid gold exports and the public
apprehension arising from "a reduction of
tho gold reserve. The third class buy o.
sell exchange whenever an opportunity
for profit offers. IL there are few COM
mcrcial bills TO bc had i'm the market and
the demand by rcmitters is great, OK
change rates rise. and If dealers having
credit abroad find that they can sell their
bills at "a higher price than the probable
cost to them Of Withdrawing gold frore
the Treasury and shipping IL abroad -
meet their bills no maturity they do So
thus making "a profit on the transaction
The leading members Of the third class
IN New York can bee numbered on the
f...fH fr
or four do almost an OF the withdrawing
Of gold for export purposes. as win be
seen by an examination Of the list of par
ties exporting gold 10 Europe published
in the daily press during IT'S continuance.
Each shipment made usually represents
in the aggregate "a large number or sim
Gle transactions. one concern may sell
n million dollars OF exchange I'm one day.
but Il NAV be represented hy ono hum
dred and fifty 10 two hundred and fifty
different bills running from one hundred
pounds sterling upwards ana theN paw
these bills abroad by shipping gold for
that purpose which they draw ont or
the Treasury I'm ono sum and send in one
shipment. II will thus be seen That
great majority Of the bankers are nccun-
iarilv interested in keeping the gold re-
serve up 10 Its full amount. and FOR this
reason they have been willing I'm the past
and are stll willing TO make considerable
sacrifices. and in order 10 prevent ship
mcnts Of gold. have contributed large
amounts OF money 10 pay the dealers in
foreign exchange the profit they would
have made by such shipments. This was
notably tlc case in the operations Of the
so-called syndicate which bought tbs
bonds OF the Government under the con-
tract Of February $. 1895. and again il
tho early part of this summer.
Although Withdrawals for export have
been going on for several years. it IS only
within TWO years that an apprehension
that the Government might be unable 10
redeem its obligations in gold has caused
Withdrawals for any other purpose. and
at no time has there been any evidence
that Withdrawals Of gold from the Trea
sury were made for the purpose OF affect
Ing the markets.
The fact that the banks were able TO
furnish all the gold required for export
up TO the middle Of the summer Of 1892
and did So was because large amounts
OF gold were being paid TO them. and 10y
them into the Treasury and paid out
again iu the course Of business and it had
not begun TO be- displaced by the silver
issues. the amount Of which had not
up 10 that time reached such a volume
as to form an important portion of the
ordinary commercial transactions in the
New York market.
During the past few weeks ard ~
present. and for the first time in this
administration. various factors are in