Cottonwood report. [volume] (Cottonwood, Idaho) 1893-1901, 1896-10-23
DEFENDS THE BANKERS
OFFICIALS EXPLAINS METHODS OF
THE GOLD WITHDRAWALS.
Secretary Curtis Believes Confidence
i'm Present Situation Is Due TO
New York Bankers.

| department, in which he defends the New
| York bankers from the allegations often
made by those interested in the with
| drawal from the treasury. Here is the let
ter in part:
Hon Charles W. Dabney-Dear Sir:
| Referring to your letter and our CONVEX
sation concerning the campaign attacks
| upon the bankers of New York in their
| relations with the gold reserve, 1 desire
| to submit the following: The term OF
| raids by bankers at New York upon the
| treasury Is one frequently used by writ
| erS and speakers who have no accurate
| knowledge of the method in which the
| notes are presented for redemption at
| the Sub-treasury in New York, or the
character or number of persons making
| such presentation. The term banker
seems to be assumed In most cases to
| cover a class of men who are apparently
engaged in withdrawing the gold from
| the governments reserve, and putting
| 1t Immediately In their private vaults for
their own selfish purposes and to accom-
| plish certain alleged improper objects.
The facts in the case are so different
from these fanciful statements, that it
seems worth while 70 call attention to
them.
by the operation of certain natural
laws New York has come to be the set
Ting place of almost all contracts for the
sale of our products. exported or Of
fered for sale abroad. At the same time
people desiring to remit money abroad
to pay obligations or to buy merchandise
are In the same market, and in order to
pay their obligations purchase these bills
of exchange to remit to their creditors
abroad. Large amounts of coffee silk,
rice, tea, sugar and other foreign prod
ucts consumed here have to be purchased
with foreign credits, and paid for in
New York with foreign exchange. The
natural result Is that, when we are sell
ing more goods abroad and there are
more bills 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 buy
ing more or are paying our debts to
greater extent abroad, the price of ex-
change rises.
THE people engaged in the banking
business may be divided into three class
es: First the officers OF the regular
banks of deposit, or issue, including the
national banks; second, the dealers in
securities, some of whom have foreign
connections through whom they market
large amount of securities and upon
whom they draw a corresponding amount
of exchange in payment for securities
sold abroad, and to whom they remit
exchange or gold In payment for securi-
ties sold here: third, agencies or branches
of foreign houses, who are perhaps also
dealers in securities, but whose main bus
mess is buying and selling exchange on
Europe for the profit which can be made
In the operation itself. The first class are
especially interested in the general pros
per1ty OF the country and in keeping up
the value of securities, because If there
is fall in securities held by them as
collateral, they are compelled to call in
their outstanding loans, which reduces
AlNvNF, s,l,-
profits prevents them from dlscounting
commercial paper restricts mercantile |
ana Industrial enterprises, and in the end |
creates failures in business and general |
financial and commercial distress.
The second class are directly interested |
IN keeping up the value of securities In |
thls country, which they have largely |
sold abroad, and their interests are TO |
avoid exports and the public apprehen-
sion arising from a reduction of the gold |
reserve.
The third class buy or sell exchange
whenever an opportunity for profit Of |
ters. One concern may sell a million
dollars worth of exchange in one aav
out 1t may be represented by 15O to 90o
or, more different bills, running from
IoU'VOO pounds sterling upward and rh.v
pay thelr oills abroad by shipping gold
LOT that purpose, which they draw out of
tne treasury in one sum and send In one
~ Will lhuS be seen that a |
great majority of bankers are necuniar,,,, |
interested in keeping the resers. ~, ~
its run amount, and for this reason fhey
nave peen willing in the past, and are
sun WAllnS, 10 make sacrifices and in
oruer 10 prevent shipments of gold bova
contributed large amounts of MONEY ~
pay ueaiers IN foreign exchange the ,rotit
. IVY moulu nave made by such shipments
l. ls was notably the case in the onnra
, OF the so-called syndicate, whieh
Dought the bonds of the government 'i 49,
uer the contract of February 9 5Sa5 -
again IN the early part of this sumne wv
Aithoush Withdrawals for export ,1ava
zen zen gong on for several years. II 10
Sion t T-et'H ~ Two years that an apprehen-
oHr mat the government might be nm.
aole 10 redeem its ohugationo IN ~,
mas caused Withdrawals for on,, 81 l
purpose ana at no time has tboro - |
80 tny eviuehce that Withdrawals of e.oIi !
,oc ' tne treasury were made for tha - !
Us VI ailecting the markets The goa4 :
the cold onns were able to furnish ali /
lne SoId required for export mn al n
middle OF the summer of 100 ~ - " the
wa" Wa, because large amounts OF ro,S S'u So f
rHas Palu TO them, and by them in4e n
--,easuIy' ana out again in the ooi,rD 'Ie Z
Itsnin, ana 1t had not begun r. b +
If wbioh L ny the silver issues the amCupt
;Icb ld nau not up to that time reacbaS a
portion of tba aS 10 form an important
;oct tiol VI the ordinary commerciaI tran
'1 ICONS IN the New York marlIet IRAN 3
during the past few months
'tesen'' and for the first tinna aiId al 81
various factnr, IA TINS
.ot .n which have proo,,ro are IN p
es oI exchange and conse0no low
~ ~ "a Ions OF gold. The nrjndirai' I'M o
tne favorable trade balance ~ oIes
tn,' I'm IN the volume of currarI ire re-
- ana In active circuIatin,Sy Out
ne continued high rate Of i ION and "a
an loans at New York tbis IN. erest CT ii
ny sIfnafiopn ait n.y. result of the nrecad p
'ion, The low rates for foroiar tc
rom I'onao cause lmportations NJ .+n sn ell
ause at tIa. ana other foreign cities SUI &C
,orE "a at tnese points exchange on te- IN
nd ~ 10 Scahty and rules a. MOI, IA -,ew 80
bei, Tue dealers and drawers gu rates, -
nroft 'sociates across the ocaan ana ~
a opt nt at the price at wbioS era,, Ehd
a usa5 'I ,p abroad and at wbioI can
o., uSeu mere In other words Ill II can
no 1Tn dthets are in the same no5,i Lor- ne
mos ai,S, states has been M oluIlen by
aTt turing the past five vearS various Ike
, ~ must not be forgottap Is ed
40 80, .i me situation which bos Ne con- ST
,ndttIo IN its present satt S pIaced M
rn luton regarding It's gold rns.islactory fr,
> s Sgy que to the efforts ~ tsserVe vas he
lct of their o al Inc early summer, Tbs
tchanpe o or agreeing to furnish b,,,s ne
ent MONT Iates under the gold ub,o we
,out artific;,i ana endeavoring to briI pr
a Logical nd mat which We now ling ling by