The islander. [volume] (Friday Harbor, Wash.) 1891-1899, 1896-06-18
THE SALE OF BONDS.
Secretary Carlisle Replies to the senaes
subcommittee.

Carlisle's 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 1895. was made public
today. Reviewing the conditions
which led to the bond issue, the seel q
tary says:
Largely on account of the appre.
hension incurred as to the ability Of
the governments to continue the current
redemption of its notes in gold coin
and maintain the parity of the two
metals, the exports of gold during the
fiscal year 1898 reached the unpfece-
denied amount of sos, $50, 844, nearly
all of which was withdrawn from the
public treasury by the presentation Of
notes for redemption.
Notwithstanding the most strenu.
Gus efforts-by the department. to main.
tain the 500, 900, 600 reserve intact,
on the 22d day Of April, 1898, it be-
came necessary to use part Of it for re-.
demption purposes.
VERY little gold being received on
account of the duties of the govern
ment, it was therefore impossible to
increase the reserve without resortipg
to issue and sale of bonds under the
authority conferred by the resumption
act"
The secretary then refers to the bond
call of January II, 1894, which netted
the government sos, 644,917. From
that date to November IA, 1894, when
the free gold in the treasury was $61,-
t78,374, the amount varied but little.
The secretary continues:
In the meantime, the frequent
presentation of notes for redemption
in gold by individuals and institutions
not desiring it for expectation clearly
indicated the existence Of uneasiness
in the public mind while foreign ex.
change was almost constantly at or
near rate which made it necessary to
export gold to pay bills at their ma
turity, and consequently Withdrawals
for shipment we're daily threatened.
AS the season approached when large
exports nearly always occur, it was
considered absolutely necessary for the
maintenance Of the public credit and
the continued execution of the none
tary policy declared by congress in the
act of July IA, 1890. and repealed in
the act of November IS, 1898. to resort
again to the issue of bonds
The terms and result of the second
issue of bonds is then stated. Secre-
tary Carlisle says:
''It soon became evident that the
transaction had not been effectual to
stop the Withdrawals of gold. These
large Withdrawals were due almost en-
tirely, so far as could be ascertained,
to feeling of apprehension in the pub
lie mind, and especially among holders
of our securities abroad, which in
creased in intensity from day to day.
until it reached the proportions Of
panic in the financial centers, and it
was evident that, unlesss effectual steps
were promptly taken to check the
growing distrust, the government
would become compelled within few
days to suspend gold payments and to
drop to silver and paper standard.
The situation was 80 grave that the at
tention of congress was called to the
subject on the 28th Of January, 1885,"
After freely quoting from this mes
sage, the secretary says that congress
having failed to pass any measure for
the relief of the treasury, contract
was entered into February 8, 1895,
with August Belmont & Co., Of New
York; N M. Rothschilds & Sons, OF
London, and J. P. Morgan & Co., OF
New York, for the purchase of $780,
900 ounces of standard gold at the
price of $l7.80441 per ounce. to be
paid for in United States 30-year per
cent bonds. No less than one half OF
the gold was to be procured abroad and
the parties agreed SO far as lay in their
power, to exert any financial influence
and to make all legitimate efforts to
protect the treasury against the with.
drawal of gold pending the complete
performance of the contract.
The secretary quotes from the presl-
dents message, sent to congress imme-
diately on the execution OF the con-
tract, in which he again calls atten.
ton to the financial condition. The
agreement to protect the treasury gold,
the secretary says, was faithfully car
ried out, and, he adds:
''After large part Of the gold had
been furnished from abroad, the secre-
tsry, in order to prevent distu1 Dances
in rates of foreign exchange and create
condition that would force gold ex'
ports and consequent Withdrawals, ac-
quiesced in departure from the literal
terms of the contract requiring one-h hall
to be procured abroad and accepted de-
pcsits of gold then held in this country
to complete the delivery"
Withdrawals of gold again set in,
and December 2. 1895, the president
again sent a message to congress, ask
ing remedial legislation, but none was
enacted, and on January 6, 1895, cir.
cular was issued asking for subscrjp-
lions for 500, 900, 900 per cent bonds.
"In general, the effect OF each sale
was to restore confidence. for the time
being at least, in the power and pur-
pose of the government to maintain its
own credit, to preserve the parity OF
our coins, and the value of our securi-
ties in large amounts from European
countries for sale in the markets here.
Late News From Cuba.
Key West, June 1.-THE following
report has been received from Las Viii
las, Cuba, by letter: The Cuban army
in this territorv il composed of more