The daily morning journal and courier. [volume] (New Haven, Conn.) 1894-1907, 1896-06-10
SECT. CARLISLE'S REPLY
HE GIVES 4 DETAILED STATEMENT
OF the NATIONS FINANCES.

We're Necessary for the Preservation of
tho Credit of the Government.
Washington, June 9.-The reply of
Secretary Carlisle to the enquiries of
the senate subcommittee of finance
charged with investigating the sale of
United States bonds in the years 1S94-5-6
was made public to-day. The secre-
tary traces the beginning of the trouble
back to the closing year of President
Harrison's administration. He says
that largely on account of apprehen
sions in this country and abroad as to
the ability Of this government to con-
tinue the redemption of notes in gold
during the year ending June so, 1898,
reached the unprecedented amount of
$l0S, $50, ,S44, nearly all of which was
withdrawn from the treasury by pre-
sentatiOn of notes for redemption. Dur
ing November and December 1892, and
January and February, 1893, the public
expenditures exceeded the receipts, the
total deficiency for the four months be-
ing $5,S1O,549, and on March 7, 1893,
when Mr. Carlisle assumed office, there
was IN the trasury only $1o09S2,410 in
gold, or about $9e2, ,410 In excess of the
lawful reserve. BY making exchanges
in currency for gold with banks the
reserve was increased to $107 ,462, 6S2 but
presentation of notes for redemption
continued and on April %, 1893, the re-
serve was reduced to $95, 432, 357. After
wards it was increased, and on August
10 it was $103, ,6SS 200. Withdrawals con-
tinued, ana on June II, 1894, the re-
serve had dwindled to s69 757 ,S24. Very
little gold was being received on account
of dues to the government and it was
impossible to increase the reserve ex-
cept by selling bonds under the act of
1875, known as the resumption act.
On January II, 1894 therefore, bids
We're invited for fifty millions of per
cent. bonds not to exceed per
cent basis. The proceeds of this sale
amounted to $685. $50, 917 in gold coin and
gold certificates.
The secretary states that on March 6,
1894, the gold reserve amounted to $107,-
AL ,402. BY August it had declined to
S52, 1S9, 500 It was slowly replenshed
374. Owing to the feeling of uneasiness
in the public mind and threatened fur
ther withdrawals it was considered
necessary Cor the maintenance of the
credit and execution of the monetary
policy declared by congress in 1890 and
1893 to resort again to an issue of
bonds. one bid for the whole sum of
$50, 900 600, upon the basis of 2S7S being
the most advantageous offer was ac-
cepted and the proceeds were $5S 53S, 500.
The payments We're not entirely COM
pleted until December /, 1894, and
it soon became evident that the trans
action had not been effectual to stop
Withdrawals of gold. Withdrawals be-
gan again and on February s. 1895, the
reserve had been reduced to Sal, SAC, 1Sl,
and several millions more had been de-
manded,
These large Withdrawals, the secre-
tary says, were due almost entirely, so
far as could be ascertained, to a feel
ing of apprehension in the public mind
which gradually reached the proper
tons of panic in the financial centers
and it was evident that unless steps
were promptly taken to check the grow
ing distrust the government would be
compelled soon to suspend gold pay
ments.
On January 2S, 1895, the president sent
q message to congress recommending
that the secretary of the treasury
should be authorized to issue sufficient
bonds to maintain the gold reserve and
to redeem and cancel the legal tender
and treasury notes. Congress failed to
pass any measure for the relief of the
treasury and consequently contract
was entered into by the secretary of
the treasury on February s with August
Belmont &, Co. and J. 2. Morgan & Co.
of New York for the purchase of g.
500, 900 ounces of gold at $17.804n per
ounce, to be paid for with thirty year
United States bonds bearing per cent.
interest The price at which these
bonds were sold was 104496. which
would yield to the investor 3.75 per
cent. per annum. The bankers buying
the bonds agreed to procure not less
than half of the gold abroad and to ex-
ert their influence to protect the treas
ury against Withdrawals of gold, pend
ing the complete performance of this
contract.
The secretary says that the president
on the same day and Immediately up
on the execution of the above contract
transmitted a message asking congress
to provide for 5 per cent. gold bond
which would effect a saving of over
SIG, 900, 600 to the government. A per
cent. gold bond was introduced in the
house. but it failed to pass and conse-
uuently the contract was carried into
effect after the syndicate had furnish
ed a large part of the gold from abroad.
The provision of the contract requiring
one-half of the coin to be procured
abroad was waived and deposits of gold
held in this country were accepted.
Mr. Carlisle next refers to the presf-
dents request for financial legislation
in his message of December 20, 1895,
and the failure of congress to act there
on. He then tells of the issue of $780,
900 600 bonds under the circular of jan
uary 6, 1896. He says that the emer-
gency in February, 1895, was so press
ing that there was no time to adver-
tise for bids, and, besides, it was doubt
full whether sales could have been made
to the public as were made to the syn
dicate He expresses the opinion that
the bond sales were necessary for the
preservation of the credit of the gov
ernment and the security of the bust
ness interests of the people. and that
they accomplished those results.