The Cleveland Era [55]
to redeem without redemption and pay without acquittance." These conditions set up against the Treasury an endless chain by which note redemptions drained out the gold as fast as bond sales poured it in. In a message to Congress on January 28, 1895, President Cleveland pointed out that the Treasury had redeemed more than $300,000,000 of its notes in gold, and yet these notes were all still outstanding. Appeals to Congress to remedy the situation proved absolutely fruitless, and the only choice left to the President was to continue pumping operations or abandon the gold standard, as the silver faction in Congress desired. By February 8, 1895, the stock of gold in the Treasury was down to $41,340,181. The Administration met this sharp emergency by a contract with a New York banking syndicate which agreed to deliver 3,500,000 ounces of standard gold coin, at least one half to be obtained in Europe. The syndicate was, moreover, to "exert all financial influence and make all legitimate efforts to protect the Treasury of the United States against the withdrawals of gold pending the complete performance of the contract."
The replenishing of the Treasury by this contract was, however, only a temporary relief. By January 6, 1896, the gold reserve was down to $61,251,710. The Treasury now offered $100,000,000 of the four per cent bonds for sale and put forth special efforts to make subscription popular. Blanks for bids were displayed in all post-offices, a circular letter was sent to all national banks, the movement was featured in the newspapers, and the result was that 4635 bids were received coming from forty-seven States and Territories, and amounting to $526,970,000. This great oversubscription powerfully upheld the public credit and, thereafter, the position of the Treasury remained secure; but altogether, $262,000,000 in bonds had been sold to maintain its solvency.
Consideration of the management of American foreign relations during this period does not enter into the scope of this book, but the fact should be noted that the anxieties of public finance were aggravated by the menace of war.* In the boundary dispute between British Guiana and Venezuela, President Cleveland proposed arbitration, but this was refused by the British Government. President Cleveland, whose foreign policy was always vigorous and decisive, then sent a message to Congress on December 17, 1895, describing the British position as an infringement of the Monroe Doctrine and recommending that a commission should be appointed by the United States to conduct an independent inquiry to determine the boundary line in dispute. He significantly remarked that "in making these recommendations I am fully alive to the responsibility incurred and keenly realize all the consequences that may follow." The possibility of conflict, thus hinted, was averted when Great Britain agreed to arbitration, but meanwhile, American securities in great numbers were thrown upon the market through sales of European account and added to the financial strain.
* See "The Path of Empire," by Carl Russell Fish (in "The Chronicles of America").
The invincible determination which President Cleveland showed in this memorable struggle to maintain the gold standard will always remain his securest title to renown, but the admiration due to his constancy of soul cannot be extended to his handling of the financial problem. It appears, from his own account, that he was not well advised as to the extent and nature of his financial resources. He did not know until February 7, 1895, when Mr. J. P. Morgan called his attention to the fact, that among the general powers of the Secretary of the Treasury is the provision that he "may purchase coin with any of the bonds or notes of the United States authorized by law, at such rates and upon such terms as he may deem most advantageous to the public interest." The President was urged to proceed under this law to buy $100,000,000 in gold at a fixed price, paying for it in bonds. This advice Cleveland did not accept at the time, but in later years
The replenishing of the Treasury by this contract was, however, only a temporary relief. By January 6, 1896, the gold reserve was down to $61,251,710. The Treasury now offered $100,000,000 of the four per cent bonds for sale and put forth special efforts to make subscription popular. Blanks for bids were displayed in all post-offices, a circular letter was sent to all national banks, the movement was featured in the newspapers, and the result was that 4635 bids were received coming from forty-seven States and Territories, and amounting to $526,970,000. This great oversubscription powerfully upheld the public credit and, thereafter, the position of the Treasury remained secure; but altogether, $262,000,000 in bonds had been sold to maintain its solvency.
Consideration of the management of American foreign relations during this period does not enter into the scope of this book, but the fact should be noted that the anxieties of public finance were aggravated by the menace of war.* In the boundary dispute between British Guiana and Venezuela, President Cleveland proposed arbitration, but this was refused by the British Government. President Cleveland, whose foreign policy was always vigorous and decisive, then sent a message to Congress on December 17, 1895, describing the British position as an infringement of the Monroe Doctrine and recommending that a commission should be appointed by the United States to conduct an independent inquiry to determine the boundary line in dispute. He significantly remarked that "in making these recommendations I am fully alive to the responsibility incurred and keenly realize all the consequences that may follow." The possibility of conflict, thus hinted, was averted when Great Britain agreed to arbitration, but meanwhile, American securities in great numbers were thrown upon the market through sales of European account and added to the financial strain.
* See "The Path of Empire," by Carl Russell Fish (in "The Chronicles of America").
The invincible determination which President Cleveland showed in this memorable struggle to maintain the gold standard will always remain his securest title to renown, but the admiration due to his constancy of soul cannot be extended to his handling of the financial problem. It appears, from his own account, that he was not well advised as to the extent and nature of his financial resources. He did not know until February 7, 1895, when Mr. J. P. Morgan called his attention to the fact, that among the general powers of the Secretary of the Treasury is the provision that he "may purchase coin with any of the bonds or notes of the United States authorized by law, at such rates and upon such terms as he may deem most advantageous to the public interest." The President was urged to proceed under this law to buy $100,000,000 in gold at a fixed price, paying for it in bonds. This advice Cleveland did not accept at the time, but in later years