The Austin weekly statesman. (Austin, Tex.) 1883-1898, 1896-06-11
SECRETARY CARLISLE'S REPLY
TO THE BOND INVESTIGATING
COMMITTEE.
EACH BOND ISSUE IS ENUMERATED.
Showing Condition of Treasury at the
Time and Calling Attention to the
Fact That Congress Refused to
Give Relief.

Washington, June 9.-Secretary Car
isles reply to the subcommittee of the
senate finance committee, charged with
the investigation of the sale of United
States bonds during the years 1894, 1895
and 1896 was made public today. The
statement is dated June 1.
Reviewing the conditions which led to
the bond issues the secretary says:
Largely on account of apprehensions
in this country and abroad as to the abil-
ity of the government to continue current
redemption of its notes in gold coin and
maintain the parity of the two metals, the
exports of gold during the fiscaly year 1893,
reached the unprecedented amount of
S10S.6S0,S44, nearly al of which was
withdrawn from the public treasury by
the presentation of notes for redemption.
Notwithstanding the most strenuous eff
forts by the department to mainain he
1OO.OOOOOO reserve deposit, on the 22d
day of April, 1893, it became necessary to
use n part of it for redemption purposes
Very little gold was being received on
account of dues to the government. and
it was therefore impossible to increase the
reserve without resorting to the issue and
sale of bonds under the authority con-
ferred by the resumption act.
The secretary. then refers to the bond
call of January II. 1894, which netted
the government $5S,965,500 From that
date to November Is, 1894, when the
free gold in the treasury was SCI .S7S,374,
the amount varied but little.
The secretary then continues
In thp mno ptimn thn frnuunnt tn
ton of notes for redemption in gold by
individuals and institutions not desiring
it for export clearly indicated the exist
ence of uneasiness in the public mind,
while foreign exchange was constantly
at or near rate which made it necessary
to export gold to pay bills at their matur-
ity, and consequently withdrawals for
shipment were daily threatened. AS the
season was approaching when large ex-
portations nearly always occur, it was
considered absolutely necessary for the
maintenance of the public credit and the
continued execution of the monetary pol
icy declared by congress in the act of July
IA, 1870, and repealed in the act of 1878,
to resort again to an issue of bonds.
The terms and result of the second
bond issue is then stated.
Secretary Carlisle then says: 1t be-
came evident that the transaction had
not been effectuall to stop Withdrawals
of gold. These large Withdrawals were
due almost entirely, so far as could be
ascertained. to feeling of apprehension
in the public mind, especially among the
holders of our securities abroad, which
increased intensely from day to day
until it reached the proportions of a
panic in the financial centers, and it was
evident that unless effectual steps were
promptly taken to check the growing
distrust the government would be com
PEELED within few days to suspend gold
payments and 10 drop to silver and
paper standard. The situation was SO
grave that the attention of congress was
called to the subject on the 2Sth of Janu-
ary. 1895.
After freely quoting from this passage
the secretary says that congress having
failed to pass any measure of relief OF
take any action to allay the present feel.
ing of uneasiness, a contract was enter
ed into on February 8, 1895, with Au-
gust Belmont & Co, of New York
Rothschilds Sons of London and ]. p
Morgan u Co., for the purchase of B.
price of -. .S0411 per ounce, to be paid
for in United States thirty-year pei
cent bonds Not less than one-half OF
the gold was to be procured abroad ant
the parties agreed so far as laid in theil
power to exert any financial influence
and make all legitimate efforts to protect
| the treasury against the Withdrawal
pending the complete performance OF
| the contract.
The secretary quotes from the presi
| dents message sent to congress imme
| diately on the execution of the contract
| in which he again calls attention to the
| Of 10 fro
He says the agreement to protect the
gold reserve was faithfully carried out
and adds
After large part of the gold had beer
| furnished from abroad. the secretary, ir
| order to prevent disturbances in tn,
sales of foreign exchange at a crtica
moment and create n condition which
would force gold exports and cOnse
uuent Withdrawals acquesced in de
parture from the liberal terms of the
contract requiring one-half of the coir
| to be produced abroad and accepted de
posts of gold then held in the city t.
complete the delivery.
Withdrawals of gold again set in and OF
December 2, 1895, the president agar
sent a special message to congress, ask
enacted, and on June 6, 1896, circular
was issued asking for subscriptions fol
500, 100000 per cents of the same char
acter as the others.
The result of the call is given.
Continuing. the secretary says: My
opinion is that the prices received for tht
bonds in 1886 were as high as it was
possible TO obtain under the circum
stances existing at the time the sales
were made.
The same conditions which make tn,