The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1896-10-16

! apprehension has been evoked, and at
no time has there been any evidence
I that Withdrawals of gold from the
/ treasury were made for the purpose of
/ affecting the markets The fact that
i the banks were able to furnish ali the
/ gold required for export up to the mid
4 die of the summer of 1892. and did so,
/ was because large amounts of gold
were being paid to them, and by them
into the treasury, and paid out again IN
the course of business and it had not
begun to be displaced by the silver is
sues, the amount Of which had not up
to that time reached such volume
as to form an important portion of the
ordinary commercial transaction in the
New York market
During the past few weeks and at
present and for the first time in this
administration. various factors are in
combination which have procured low
rates Of exchange and consequent i'm
pOrtatiOns of gold The low rates for
foreign exchange cause inportations of
gold from London and other foreign
cities. becau al these points exchange
on New York is scanty and rules at
very high rates. and the dealers and
drawers here and there associated
across the ocean ind a profit in the
difference of price at which gold can
be obtained abroad and at which it can
be used here
In other words. these foreign markets
are in the same condition the United
States has been in at various times
during the last five years It is true
gold has been imported upon one or
two occasions lately. when purchases of
government bonds We're being made,
but for this a premium was paid and
it was purchased and shipped like cot
ton or wheat. without regard to the
rates of exchange ruling here, and was
an abnormal proceeding. During the
year succeeding the resumption Of spe-
Gle payments and until the currency
question dlSturbe our monetary rela-
lions there was a regular movement
Of gold to this country in the late sum
mer and autumn. while We were mar
keting our agricultural products
abroad. In the spring and early sum
mer we exported gold to pay our Obli-
cations. Low rates of exchange in the
former and high rates in the latter
case were the result. with the balance
of trade usually in favor Of the United
States.
The tide of securities flowing back to
America from foreign holders since 1890
has largely subsidized, at least for the
time being, and there is not as much
of a drain from here on that account
The high rate of interest paid in the
New York market for call loans dur
ing the past few weeks has attracted
foreign capital from centers where the
interest rates have been much lower.
This popularity was also marked dur
ing August OF 1893, at the height of the
currency panic, when the ruling rates
of interest were abnOrma1ly high, and
large amounts of money were loaned
this country. The contraction is caused
by the large increase in the balance of
the United States treasury arising from
the bond issues and from the boarding
of gold and of notes redeemable in
gold which has been going on for some
time in view of a possible failure of
the United States to continue their re
demption in gold.
The critics who talk so freely about
importing millions of gold for effect
from the other side Of the ocean do not
To
a transaction and that there must be
value exchanged for it, either in shape
of exports or securities, or in some 9TH
er way. It will be seen from the pub
Hshed names of the parties who re-
ceive the gold imported that they are
mainly the dealers in exchange, or
houses or institutions having foreign
connections, and that the national
banks, except as institutions to receive
the deposits of their customers. are not
at all interested except in the case of
one or two OF the larger who have reg
ular London correspondents with whom
they do an exchange business. It must
not be forgotten that the confidence in
the situation which has placed the
country in its present satisfactory con-
dition regarding its gold reserve was
largely due to the efforts of the bankers 4
of New York in the early summer.
The fact of their agreeing to furnish
bills of exchange at rates under the
gold shipment point and endeavoring to
bring about artihcially that which we
now KNOW Is q toslcal result from nat
uraI causes, inspired so much conf
dence that the normal conditions pre- /
vailed and the situation cured itself. /
According to the published reports dur
ing April, May, June. July and the first
week in August, While gold was being
exported, the rates of sterling ez1-
change at New York have ruled from
4S81a to 1904, and during the last of
August and up to the present time /
While imports of gold were being made
they have ranged from 1894 to 1859.
If the parties attacking these trans
actions would examine the daily re-
ports and see who withdrew or import (
ed the gold and what the exchange (
market was. and why the exchange /
rates were so high or low much mis-
apprehension of these subjects would
be avoided. Yours truly,
w E CURTIS