The San Francisco call., 1896-06-10
The Secretary Dates the Begin
ming of the Trouble Back
to Harrison'S Term.
EXCESS OF THE WITHDRAWALS
Very Plausible Excuses Made for the
Frequent Issues of Interest.
Bearing Bonds.

w NAS11NU1ON, II. ", June 5'-1 uS
Senate Committee on Finance this morn
ing discussed the proposed investigation
of the sale of bonds which is ordered
under the Senate resolution, and finally
decided that the investigation should be
open to the public.
The reply of Secretary Carlisle to the
inquiries of the committee charged with
the investigation OF the sale of bonds of
the United States in the years 1894-95-96
was made public this evening.
The Secretary traces the beginning o.
the trouble back to the closing year of
President Harrison's administration and
brings the history down to Mr.. Cleveland's
first issue of bonds in the following state
ment:
Largely on account of apprehensions
in tn country and abroad as to the ability
of the Government of the United States to
continue the current redemption of its
notes in gold coin and maintain the
parity of the two metals, the exports of
gold during the fiscal year 1898, which
closed June 80, 1893, reached the unprece-
dent amount of $108, $3.50, ,844, nearly all of
which was withdrawn from the public
redemption.
During the three months next preeed-
ing the 7th day of March, 1898, when
assumed control of this department, the
Withdrawals of gold from the treasury
amounted to $35, ,563, ,093, while the exports
amounted to 500, 709 730, and during the
eight months next succeeding that date
the Withdrawals amounted to $50, 1877, 219,
while the exports amounted to $39, ,959, 529,
showing an excess of Withdrawals over ex-
ports to the amount of $40, ,237, $50. These
Withdrawals and shipments began on a
large scale in June, 1893. the last month of
the fiscal year 1892, and continued with
only short periods OF intermission until
the close of the fiscal year 1s93 On the
31st day of December, 1892, the free gold
in the treasury amounted to $121, 266 662 %,
but by January 81, 1898, it had been re-
duced to sos, ,7l3 SO, and on the 2Sth
of February it had fallen to $103, ,284, 218 81,
or only So, ,284, 218 81 in excess of the lawful
reserve. The reserve fund would have
fallen below $1O0,0000O0 before March,
1898, if my predecessor in Office had not
effected arrangements in January and
February by which the sum OF SO, $50, 600
in gold WAS procured from certain bankers
in New York in exchange for United
States notes and otherwise.
During each of the months of No
vember and December, 1892, and January
and February, 1893, the public expendi-
lures exceeded the receipts, the total de-
ficiency for the four months being $3.50
548 81, and on the 7th day of March, 1893,
the available cash balance in the treasury
was $124, ,613, $40, which includes $10O,982,-
410 in gold, or 1882, ,410 in excess of the
lawful reserve, but, by making exchanges
in currency for gold with the banks in
different parts of the country, the amount
was increased TO $107, 49,, ,6S2 on the 25th of
that month, although large Withdrawals
were made in the interval. Notwith-
standing the most strenuous efforts by the
department to maintain the 500, ,000, 900
reserve intact, the presentation of notes
for redemption to procure gold for ship
ment abroad continued to such an extent
that on the 22d day of April, 1893, for the
first time since the fund was established
it became necessary to use part of it for
redemption purposes, and it was reduced
to $95, ,432, ,357, but it was afterwards in
creased by exchanges of other forms of
currency for gold, so that on the 10th day
of Angus: it bad been fully restored ard
there was on hand $103, ,683, ,290 in free gold.
but by December 30, 1898, it had fallen to
$50, ,861 SOL 13, and was reduced on the 18th
day of January, 1894, to the sum of &c.,
757, ,824.
The cash balance then in the treasury,
excluding the current liabilities, bur in
cluding the gold reserve and all subsidiary
and minor coin, was only $50, ,961 ,4O2. Very
little gold was being received on account
of duties to the Government, and it was
therefore impossible to increase the re-
serve without resorting to the Issue and
sale of bonds, under the authority con-
terred by the act of January IA, 1875, COM
monty known as the resumption act. At
this date there was no free gold coin in the
treasury, all the coin on hand being cov-
cred by outstanding certificates. The $685.
557, S04 then held as free gold was in the
form of bullion"
Quoting the provisions of law which au-
thorzed this course to be taken, MIR. Car
lisle proceeds to state that on tie 18th OF
January, 1894, bids were invited for $50-
100000 of per cent bonds on not to exceed
a. per cent basis. The proceeds of this sale
amounted to the sum of $58, ,660, ,917 %.
which was paid into the treasury in gold
coin and gold certificates. The circum-
stances which lead to the next issue are
then described.
''On the 9Th day of March, 1894, after
this sala had been completed, the free
gold In the treasury amounted to the sum
of $l07, ,446, 1902, and after falling to $50, $780,
500 on the 7th day of August 1894, it was
slowly replenished by voluntary ex-
changes of gold coin for United States
notes and other currency by the banks
and by small receipts of gold in the pay
ment of duties to the Government, until
the 14th day of November, 1894, when it
reached the sum of SCI, ,s7S,374. In the
meantime, however, the frequent presenta-
ton of notes for redemption in gold by in
dividuals and institutions not desiring it
for export, clearly indicated the existence
of a feeling of uneasiness in the public
mind, while foreign exchange was almost
constantly at or near rate which made it
necessary to export gold 10 pay bills at
their muturity, and consequently with
drawals for such payment were daily