The Scranton tribune. [volume] (Scranton, Pa.) 1891-1910, 1896-10-16
IN DEFENCE OF THE
NEW YORK BANKERS
Letter from Assistant Secretary Gusts
to-Hon. G. W. Dabney.
BANKING BUSINESS IS EXPLAINED
The Terms Used by Heated Campaign
Orators and Writers Are Some what
Misleading When Applied to Our
Bankers..They Are Not Anxious

Washington, Oct. 15.--Assistant Sec
retary w. T.. Curtis, of the treasury
department. whose duties have brought
him into frequent communication with
the shippers of gold, returned from New
York today. gave out for publication a
long official letter addressed to Hon.
Charles w. Dabney, jr., assistant secre-
tary of agriculture.
In his letter Mr.. Curtis says: "Refer-
ring to your letter and our cOnverSa-
ton of yesterday concerning the cam
paign attacks upon the bankers of New
York in their relations with the gold
reserve. ! desire to submit the following
considerations:
"rhe term raids by bankers at New
York upon the treasury is one fire.
quently used by writer's and speakers
who have not accurate knowledge OF
the methods from which notes are pre-
scented for redemption at the sub-trea
ury in New York. OF the character or
number of persons making such pres
entations. The term banker seems to
he assumed i'm most cases to cover
class of men who are apparently en-
gagged in Withdrawing gold from the
governments reserve ana putting II
away in their private vaults for their
own selfish purposes and To accomplish
certain alleged improper objects. The
facts in the case are 50 different from
these fanciful statements that it seems
worth while To call attention 10 them.
by operation of certain natural
commercial laws. without the interfer
ence of legislation New York has come
to be the settling place Of almost all
contracts for the sale of our products
and in that market bill of exchange,
which represents products exported, are
offered for sale. At the same time
people desiring to remit money abroad
to pay obligations or to buy merchan-
disc. are in the same market, and in
order to pay their obligations pur-
chase these bills of exchange to remit
to their creditors abroad. The natural
results is that when we are selling our
goods abroad there are more bills of
exchange in the market than there is
demand for. which is the case at pres-
ent. the price of exchange falls. On
the other hand when we are not SELL
ing as much abroad, and are buying
more or are paying our debts to a
greater extent abroad the price of ex-
change rises.
BANKERS CLASSIFIED.
The people engaged i'm the banking
business in New York may be divided
into three classes: First, the officers
of the regular banks Of deposit or is
sue, including the national banks; Sec
Ond, the dealers in securities, some of
whom y have foreign connections
through whom they market a 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 Sc
curities sold here; third, agencies, or
branches of foreign houses, who are
whose main business Is buying and
selling exchange on Europe for the
profit which can be made in the opera
tion itself.
THE first class are especially inter-
ested in the general prosperity 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 out
standing loans, which reduces their
lines of credit diminishes their profits,
prevents them from discounting COM
mercial paper, restricts mercantile and
industrial enterprise, and in the end
creates failures in business and gen.
eral financial and commercial distress.
The second class are directly inter-
curities in this country, which they
have largely sold abroad and their in
terests are to avoid gold exports and
the public apprehension arising from
a reduction of the gold reserve. The
third class buy or sell exchange when
ever an opportunity for profit Offers
The leading members of the third class
in New York can be numbered on the
fingers of both hands, and, in fact,
three or four do almost all of the with
drawing of gold for export purposes. as
will be seen by an examination of the
list of parties exporting gold to Europe
published in the Daily press during its
| continuance. 1t will thus be seen that
great majority of the bankers are
pecuniarily interested i'm keeping the
gold reserve up to- it's full amount. and
for this reason they have been willing
in the past and are still willing to
make considerable sacrifices, and in
order to prevent shipments Of gold
have. contributed large amounts of
money to pay dealers in foreign ex-
change the profit they would have
made by such shipments. This was
notably the case in the operations of
| the so-called syndicate which bought
the bonds of the government under the
contract of Feb. s. 1895, and again i'm
the early part of this summer.
RECENT APPREHENSION.
although Withdrawals for export
| have been going on for several years
ii is only within two years that an
apprehension that the government
might be unable to redeem its obliga-
tions in gold has caused Withdrawals
for any other purpose. and at no time
has there been any evidence that with
drawals of gold from the treasury was
made for the purpose of affecting the
market. The contraction i'm the active
| currency Is caused by the large in
crease in the balance of the United
States treasury arising from the bonds
issued and from the boarding of gold
and of notes redeemable in gold. which
have been going on among the peo-
| pie for some time in view of a pos
sible failure Of the United States t.
continue their payment in gold.
| 1T must not be forgotten that the
confidence In the situation which has
placed the country in its present sat.
isfactory condition regarding it's golG
reserve was largely due to the efforts
Of the bankers Of New York in the
early summer
| 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 whether the exchange
rates were high or low. much misap.
prehensiOn on these subjects would b.
avoided"