New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1896-01-06
MONDAY,
JANUARY 6, 1896.
NO HASTY ACTION LIKELY
THE BOND ISSUE MAY NOT BE MADE FOR
A MONTH


AMOUNT OF GOLD NOW IN THE COUNTRY
There may not be Government bond issue In
month but again there may be one in a week
Information to be relied on is that the President
intends to allow the Senate ample time In which
to act on the Bond bill now in the hands OF the
Finance Committee of that body
AS has previously been said there Is held to be
no need FOR haste on the part OF the Admin
stration to replenish the Treasury gold reserve.
The knowledge that there Is to be a bond issue
has caused a scramble for gold with which to
pay for the bonds. This of itself has served in
a measure to restrict expectations of gold. The
chief obstacle to the outgo of gold, however 10
the fact that all of the houses that usually APP
pear as shippers have, with single exception,
joined the syndicate organized by J. Pierpont
Morgan and President James Stillman OF the
National City Bank. to buy the bonds They
are in consequence estopped from shipping.
The house in question will not ship gold II II
can obtain bills of exchange at rates which will
make it more expensive to send bills than
gold. 1t is calculated that consignments OF
gold to Europe ought not to average over 81 000-
900 week hereafter long as present condi-
tons exist and possibly they will cease alto
gether That being the case, 1t is plain to see
why the President is in no hurry 70 make bar
gain with the bond syndicate.
IMPROBABLE TO DO So
The reason the house spoken of above has not
subscribed for bonds and become member Of
the syndicate is that it believes 1t would be
profitable for IT to do 1t does enormous
exchange business, and is perforce at times a
heavy exporter OF gold. 1t belonged to the syndi-
cate which handled the bond issue OF 1885, and
was bound not TO export gold. The result was.
as alleged, loss on its regular business which
far overbalanced It's Sain on the bond transact
ton. Accordingly it has kept out OF the new
syndicate. and will not curta its dealings in ex-
change.
When bonds sold In February. 1896. the
gold reserve was lower by some 1900 900 than
it is now Estimates as to the amount Of gold
in the United States outside OF the Treasury
run from $500 600 900 to S75O.0O 900 The first
named sum is certainly within bounds Tho
banks of the country hold $3.50 900 OOO and the re-
naming $3.50 1000. or whatever it may be, 10
held by trust companies insurance companies
and other Institutions and by individuals The
banks will not, as rule. to give up over
half of their holdings Of gold. and the same will
probably be found tue of other corporations and
of individuals.
The bond syndicate has pledge OF $3.50 0000 900
of gold in the United States and $4,000 900 in
Canada. Germany and England, The first call,
according to the programme which has been
prepared will be for one-half Of the gold pledged;
therefore, there will be left sl75,Oo0.OOO Of the
gold in the United States which is counted
available" or more than twice as much as will
be needed first and last. The fnancers do not
! believe in a popular loan at all. They say II
would not bring out the gold. The object IL not.
TO find sale for bonds. but TO acquire gold.
/ The Government has money enough at present.
What 1t needs is gold and this only the banks
and concerns in the syndicate furnish in the
amount needed.
TO REGULATE STERLING EXCHANGE.
! The syndicate which is to buy the bonds WILL
it is understood, undertake to regulate the ster-
ling exchange market so as to prevent the out
flow of gold. the same as IT did last year; and a
point financers make is that this could not be
done with popular loan. The syndicate will
not be likely 10 have as hard work controlling
foreign exchange in 1896 as it had in 1895. be-
cause the vast liquidation by holders OF Ameri-
can securities abroad has come to an end. and
there are practically no more stocks and bonds
to be returned 70 this country In 1895 the syndi-
cate supplied bills to firms and persons who had
obligations to meet on the other side II secured
the bills from the correspondents here Of foreign
houses and paid these houses one-half cent
pound more than the price at which the bills
were sold for for drawing them This premium
of one half cent pound deducted from the
profits Of the syndicate 1t is believed that bills
can be obtained this year az premium of one
quarter of a cent a pound. 1t is true that gold 10
scarcer this year than il last. but this Is Q
condition which the individual members OF the
syndicate have to meet. and not the syndicate as
A whole Many Of the members OF the syndicate
have no gold of their own, and they actually find
il cheaper to bring it from Europe than TO pick
il up in this country. The syndicate agreement
provides that S25 100000 of the first lot of $780,,
coo 900 of bonds shall be placed abroad. Thus
not only will S25.00O.0Oo in gold 10 pay for these
bonds be brought from Europe. but probably
SO 900 900 more. 70 be used in paying for the
bonds subscribed for in the United States. and
this situation will probably be repeated when the
second $1,000 900 OF bonds are issued, IL they
are issued
1t is said that $1,000 900 in gold is now on It's
way from London to New-York. II is known
further than the output Of the western smelling
works for some time to come has been con-
tracted for. one per cent Is freely bid for gold,
but II is held at Ia 60 ~ per cent advance.
The affrOnt to Great Britain which con-
tanned in the dispatch from Emperor William OF
Germany President Kruger Of the Transvaal
Republic is taken by Wall Street men To mean
that Germany sides with the United States In
the Venezuelan dispute. and market not only
for United States Government bonds. but also
for all kinds Of American securities. is to be
opened in Germany.