Evening journal., 1896-06-10
CARLISLE'S BOND STORY
Sends a Lengthy Reply to the
Subcommittee.
EXPORTS REACHED BIG FIGURES


nry, to the inquiries OF the subcommittee
on finance Of tho United States senate
| charged with the investigation Of the sale
OF bonds OF the United States In the years
1Sg4-6, has b3en made public.
The secretary traces the beginning OF
, tho trouble back to the closing year OF
Presidents Harrison's administrator and
brings the history down to Mr.. Cleve-
lands first issue OF bonds lie says;
HDurng the three months preceding
the 7th day OF March 1893, when ! as
sumeh control Of this department. the
Withdrawals OF gold from the treasury
amounted TO s35, sos 003 while the ex-
| ports amounted TO $780, 700, 730, and dur
| ing the eight months next succeeding that
date the withdrawals amounted to s50,-
| 1917. .219, while the exports amounted to
$50, 9E9, 500, showing an excess of with.
drawal= over exports to the amount Of
$40 237, $50.
These large Withdrawals were due almost
entirely 80 far as could be asoertained, 20
a feeling Of apprehension in the public
mind, especially among the holders Of our
securities abroad. which increased IN in
tensity from day to day until 1t reached
theproportions OF panic in the financial
centers, and ittwas evident that unless
eifeotual steps were promptly taken to
check tho growing distFust the govern
ment would be compelled within few
days to suspend gold payments and drop
TO a silver and paper standard Hore than
| Si3, 900, 900 Of the amount Withdrawn was
not demanded for export, but was taken
out by people who had become seriously
alarmed on account OF the critical condi-
| tion OF tho treasury in its relations to the
| currency of the country. The situation
was so grave that the attention OF congress
was called to tho subject by special mes
snge from the president OF the United
| States on the 2Sth day Of January 1895.
After freely quoting from this message
the secretary says that congress having
failed to pass any measure for the reliof
Of the treasury or to take any action ca@.
culated to allay the serious apprehensions
then existing in the public mind, con-
tract was entered into on Feb. s, 1895,
with August Belmont & Co. of New
York, on behalf OF themselves and NJ M.
Rothsohild q Sons of London, and J. =.
Morgan 4 Co. OF New York, on behalf OF
themselves and J S. Morgan & Co OF
London, for the purchase OF 3, 300, 900
ounces OF standard gold at the price OF
Sl7sO44l per ounce, to be paid for in
United States 80 year 4 per cent bonds.
Not less thnn one half of the gold was TO
be procured abroad, and tho parties agreed
so far as lay in their power to exert all
financial influence and make all leg1ti-
mate efforts to protect the treasury against
the withdrawal pending the complete per-
formance of the contract. As an ounce Of
gold was worth SIS. B0465, tho difference
between that sum and the contract price
represents the premium received by the
government on the bonds, making the
| price at which the bonds were accepted
q lr| s1n
/ yield the investor 375 per cent per an
mum.
Withdrawals OF gold again set in, and
on Dec. 2, 1895, the president again sent a
special message to congress asking RENE
dial legislation, but 'nODe was enacted,
and on Jan. g. 1896, a circular was issued
asking for subscriptions for 500, 10000 900
Per cents of the snme character as the
othors Tho bids for this loan numbered
l,64i and aggregated SGSS, 600. 009, Of
which S16b, $780, 600, coming from irrespon-
sible parties was thrown out Among the
bids received was one for the whole $780,
900 900 frcm j. p. Morgan 4 Co Of New
York at sll0 6s77. After accepting all
higher bids thore remained S33, l79, $50,
which was allotted TO Morgan & Co. at
tho price offered Tho total proceeds Of
the sale exclusive of interest were SILL
i66,e32, Continuing tho secretary says;
Knows no other WAY.
'I know OF no method by which the
market prico OF 500, 0O0, 900 or $780, 600. 900
, in bonds, all put on the market at tho
Same time and TO be paid for In gold, can
bo ascertained except by Offering them for
sale 70 Tho public at large OF by negotiat-
Ing with capitalists here and in other
countries who are acquainted with tho
/ 81 nd In hn
habit OF dealing in them. OF course such
large amounts offered at one time cannot
be sold for as high price, payable in
gold, as can be obtained for smaHer
amounts to bo paid for In tka ordinary
way.
MY opinion is that the prices received
! by tho government for the bonds sold In
1894, 1898 and lSg6 woro as high as 1t was
possible to obtain under the circumstances
existing at the times when the saAss were
made. The fact that bonds are offered for
sale by tho government only at times
when the financial affairs OF the country
aregreatly disturbed, and the market more
OF less depressed on account OF tho busi-
ness situation and tho feeling OF insoouri-
" which always prevails at such periods
among investors, necessarily prevents the
realization OF as good prices as might be
procured II advantage could be taken of
the most favorable opportunities for effect
ing the sales. The same conditions which
make the issue Of bonds necessary also de-
press the price Of suoh securities in'all the
markets OF the world. and consequently
the government is compelled 60 make its
sales under the most unfavorable circuni-
stances.
In relation to that part OF the resolu-
tion which directs the committee to in
vestigate and report what effect tho
bond sales had on the credit and business
OF the people OF the United States have
the honor to say that. in my opinion, tho
sales were necessary for tho preservation
Of tho credit of the government and the
security OF tho business interests OF tho
people, and that they in faot accomplish
ed those results. IL is not possible to
state in this communication all the facts
upon which this opinion Is based, but It
may be said IN general that tho effect OF
each sale was TO restore confidence, for
the time being at least in the power and
purpose OF the government to maintain
its own credit. 60 preserve the parity OF
our coins and the value OF our currency,
! opI 10 rhar- tba SATURN Of .ttr cocf,rffi ioc