The diamond drill. (Crystal Falls, Iron County, Mich.) 1887-1996, 1896-06-13
RoND SALES.
Secretary Carlisle Tells Why They
Were Made.
Necessary TO the MaintepDace of Our
Credit Owing TO the Alarm of For
eign Investors The Eject Was
to Restore Confidence.


Washington, June 10.-Secretary Car
isles reply to the subcommittee of the
the investigation OF the sale of United
States bonds during the years 1894.
1895 and 1896 was made public Tuesday.
The statement Is dated June /. Review
ing the conditions which led TO the bond
issue. the secretary says:
Largely on account OF apprehensions I'm
this country and abroad as 20 the ability OF
the government 10 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 unprecedented amount Of $685.
S0.Si4. nearly all OF which was Withdrawn
from the public treasury by the presenta-
ton OF notes or redemption Notwith-
standing the most strenuous efforts by the
department 10 maintain the $780, goo, 900 re-
serve Intact, on the 22d day OF April. 1898.
II became necessary 10 use part or II
for redemption purposes. Very little gold
was being received on account of dues TO
the government, and II was. therefore, Inn
possible 10 increase the reserve without
resorting 10 the issue and sale OF bonds.
under the authority conferred by the re-
sumption act"
The secretary then refers TO the bond cali
ment 5S.Cs06i7. From that date to Novem-
Der IA. 1894. when the free gold I'm the treas
ury was SCI, 67S,374, the amount varied but
little The secretary then continues:
I'm the meantime, the frequent presenta-
ton OF notes for redemption I'm gold by IN
dividuals and institutions not desiring for
export clearly indicated the existence OF
uneasiness In the public mind, while for
eign exchange was constantly at or near
a rate which made II necessary TO export
gold to pay bills at their maturity. and con-
scquently Withdrawals for shipment were
daily threatened"
The terms and result of the second bond
issue are then stated. and Secretary Car
Isle says:
ut soon became evident that the transact
ton had not been effectual 20 stop with
drawals OF gold. These large Withdrawals
were due almost entirely, so far as could
be asccrtaine3. 20 a feeling OF apprehension
IN the public mind, especially among the
holders OF our securities abroad, which In
creased In intensity from day 10 day. that
the government would be compelled within
a few days 10 suspend gold payments and
10 drop TO a silver and paper standard. The
situation was so grave that the attention
OF congress was called TO the uubject on
January %. 1885
After freely quoting from thi message.
the secretary says that congf sss having
failed TO pass any measure for he relief or
the treasury. or to take any action calcu-
lated 10 allay the serious approximations
then existing I'm the public mind. a contract
was entered into on February 5. 1895. with
August Belmont & CO.. of New York: n
NJ Rothschild a Sons, OF London. and j. Il.
Morgan a Co. for the purchase OF S,oO0Op
ounces of standard gold at the price OF
IL s0iil per ounce, TO be paid for IN United
States 30-yesr four per cent bonds. Not
less than one-half OF the gold was to be
procured abroad. and the parties agreed
so far as lay I'm their power to exert any
financial influence and make all legitimate
efforts 10 protect the treasury against the
withdrawal, pending the complete perform
ance of the contract
The secretary quotes from the presidents
message, sent 10 congress Immediately on
the execution OF the contract, In which he
again calls attention to the financial condi-
ton OF the treasury. The agreement to
protect the treasury gold, the secretary
says, was faithfully carried out. and he
ADDS:
After a large part OF the gold had been
furnished from abroad, the secretary, In
order to prevent disturbance IN the rates
OF foreign exchange at a critical period
and create a condition which could force
gold exports and consequent Withdrawals
acquesced I'm "a departure from the con-
tract requiring one-half OF the coin TO be
procured abroad and accepted deposits OF
gold then held I'm this country TO complete
the delivery"
Withdrawals OF gold again set In. and on
December 2. 1895. tho president again sent a
special message 70 congress asking rem
edial legislation, but none was enacted. and
on January 8. 1896, circular was issued
asking for subscriptions for si00. 900. 900 four
per cents. of the same character as the
others. Continuing. the secretary says:
my opinion is that the prices received
by tho government for the bonds sold in
1894, 1895 and 1896 were as high as II was
possible 10 obtain under the circumstances
Al.
made The fact that bonds are offered for
sale by the government only at times when
the financial affairs or the country are
greatly disturbed and the market more or
less depressed on account or the business
situation, and the feeling OF insecurity
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 such securities In all the
markets OF the world and consequently tho
government is compelled TO make its sales
under the most unfavorable clrcum-
stances"
I'm relation 10 that part OF the resolution
which directs the committee TO investigate
and report what effect the bond sales had
on the credit and business OF the people
OF the United States have the honor 60
say that. In my opinion. the sales were
necessary for the preservation OF the credit
OF the government and the security OF the
business interests OF the people, and that
they I'm fact, accomplished those results.
In general the effect OF each sale was TO re-
store confidence. for the time being at
least. In the power and purpose or the gov
eminent TO maintain it's own credit, 10 pre-
serve the parity OF our coins. ard the value
OF our currency, and 10 check the return
OF our securities In large amounts from
other countries for sale In the market
here"
Hin Fire I'm Toronto.