The evening times., 1896-10-16
RAIDS ON THE TREASURY
Assistant Secretary Curtis De-
fendS New York Bankers. /.
NOT RESPONSIBLE FOR THEM
Gold Exporting Is Confined Almost
Entirely to II Few Houses Which
Have Foreign Connections-TheD De
mands Upon the Treasury BASED
Upon the Laws of Trade.

Assistant Secretary Curtis. of the Treas
ury, has written n letter to Assistant Sec.
retary Dabney of the Department OF Agri-
culture, refut,ng the allegations often nade
that New York bankers are interested III
the wIthdra walls OF gold from the Treasury.
He says in part:
"by operation OF certain natural cointiler-
cial ws, without the interference of ieeis-
lauOu, New York has come to be the settiiiie
place ct almost all contracts Tor the SAFE OF
our products abroad, and IN that market the
bills of exchanges, winch represent prouuc's
exported, are offered Tor siiie. Al inc Same
time, people desiring to remit money abroad
to pay OBJ. gat ions or to buy merchandise
are III the same market, anu, III order 10 pay
their obligations, purchase THESE bhis ol
exchange 10 remit TO their creditors ABROAD
Large amounts of coffee, SILK, rice, tea.
sugar and other foreign products CON
sumed here have to he purchased with FOR
eign credits and paid for i'll New York with
fore .gn exchange. The natural result is
that when we are selling more goods
abroad ami there are more bis 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
we are not selling as much abroad and are
buying more or are paying our debts to Il
greater extent abroad the price OF eN-
change rises.
THE CLASSES OF BANKERS.
1.-The people engaged IN the banking bus:-
ness in New York may be divided into
three classes: FIRST, tie officers OF the
regular banks OF deposit or issue, lnGUd-
ing the national banks; second, the dealers
IN securities, some of " hOm have foreign
CoIue, urO-.s rlituu.n Mnu.l Inr, marN.I Il
h..
they draw corresponding amount Of eN-
change in payment for securities sold
abroad, ana 10 wnon Jncy Remit exchange
or gold III payment for securities sold here,
third, agencies or branches of foreign
houses VINO are. perhaps, also dealers III
securities, bat hose main business is buy
and selling exchange ON Europe for the
profit " men can DE made lu The operation
itself.
The first class are especially interested
III the general prosperity OF the country
and IN heeping up the value OF the securi-
ties, because il there is "a fall in securities
held by them Is collateral lney are COIN
pellcu To call III their outstanding leans,
" hIch reduces their fines - creLi,, dinlin-
lShes their profits. prevents them from
discounting commercial paper, restricts
mercantile and industrial enterprise and
IN the end creates failures i'll business and
general financial and commercial distress.
The second class are directly Interested in
keeping up the value OF securities in this
'o-.Ii, HiiI;II vIr .i.is,- IA, ,Iy IituIuau.
and their interests are 10 avoid gold eN-
ports and the public apprehension arising
from a reduction 2f the gold reserve. The
third class bay or sell eNSuaBgc " hencvcr
an opportunity for profit offers.
EXCHANGE RATES RISE
IF there are few commercial bills TO De
ll.lu o.
piitters is great exchange rates rise, and If
dealers having credit abroad find tina u tncy
can sell their bills at a higher price than the
probable cost TO them Of Withdrawing gold
from the Treasury and shipping il abroad to
meet their bills at maturity they do SO, thus
making u profit on the transaction.
The leading members Of the third class
in New York can be numbered on the fingers
of both hands, and, in fact three OF four do
almost all of the Withdrawing Of gold for
export purposes, as will be seen by an cX-
aIiIIul ION Il Tie list Of parlI, eXI urIIng
gold to Europe published in the daily press
duringits continuance. Each shipmentmade
usually represents in the aggregate Il large
Duniber of single Transactions.
"one concern may sell million dollars of
exchange in one day, hut ii may be repre-
scnted by 30 10 25O different bills, running
from e1CO upward, and they pay these
bills abroad by shipping gold for that pur-
ury IN one sum and send in one shipment. II
Will thus Dc seen that a great ajority ofthc
bankers are peCuniarily interested in keep
ing the gold reserve up TO its fun amount,
and for tins reason they have been willing
In the past and are still willing to make con-
siderable Sacriilces, and, in order TO prevent
shipments Of gold, have contributed large
amounts of money 10 pay the dealers in for
eign exchange the profit they would have
made by such shipments. This was notably
tue case in the operations of the so-caIled
syndicate which bought the bonds of the
government under the contract of February
&, So >, and again in the early part OF this
summer
The MOTIVE FOR Withdrawals
Although Withdrawals for export have
been going OH for several years. it is ONLY
within two years that an apprehension that
the government might be unable To rcdc. IN
It's obligations in gold, has caused with
drawais for any other purpose, and at no
time has there been any evidence that with
drawals of gold from the Treasury weremade
for the purpose OF affecting the markets.
The fact that the banks We're able to fur
nish all the gold required for export rp 20
The middle of thesunnn erof 81 8 Y, and did 50.
was because large amounts OF gold were
being paid to them and by them into the
Treasury, and paid out aga in i'll the courseuT
placed by the silver issues, the amount of
which had not up to that time reached such
a volume as TO form an i'm portant portion of
the ordinary commercial transactions in the
View York market.
During the past fe " weeks and al present,
and for the first time in This administration,
various factors are in combination, which
have produced low rates OF foreign ex-
change and consequent importations of gold
The principal ones are the favorable trade
the reduction i'll the volume of cur
rency outstanding and in active circulation, |
md the continued high rate OF interest for |
call llloans at New York, this latter condition |
being partly a result of the preceding stua- |
lion. The low rates for foreign exchange |
cause importations of gold from London and |
,thcr foreign countries, because at these |
points exchange OH New York is scanty, and |
rules at very high rates, and tn T. dealers AMI |
Ira wers here and their associates across the |
ocean find profit in the difference Of price |
1t which gold can be obtained abroad and at |
which it can be used h ere.
THE CONDITIONS UNCHANGED.
''In other words, those foreign markctsare
las been in at various times during the last
i've years. It's true that gold has been i'm
ported upon one or two occasions lately |
when purChas ses of government bonds we're |
being ma de, but rthis a pre- MUM was paid |
md it was purchased and shipped like cot |
on or wheat, without regard tothe rates of |