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The Bond-Syndicate Operation

THE BOND-SYNDICATE OPERATION The action taken by the Administration, in the Treasury crisis of 1895, involved one of the most remarkable experiments in the history of finance. It was the Treasury's double problem now to restore the gold reserve and to prevent the im mediate withdrawal of the specie thus obtained, and this could not be done through another bond sale similar to that of December, 1894. It could not be done directly through the banks at all. There re mained the large international banking houses which are commonly employed as agents for important Government operations in the money market, and which had been employed by Mr. Sherman in the resumption operations of 1878 and 1879.

What terms could have been made with these in ternational interests, had they been approached in 1893 or 1894, is a matter of conjecture. Their terms as now submitted, in the crisis of January, 1895, were extremely harsh; they measured with little mercy the emergency of the Treasury. They unfolded what they believed to be a practicable plan for both restoring and maintaining the Treasury reserve, but they made the consideration for their services the allotment of a thirty-year four per cent. bond at a price equivalent to 104+, when the existing United States four per cents, with less than half as long to run, were bringing 111 on the market.' This was asking a heavy concession; no such demand has been made by any Government-bond syndicate during the present generation. On the other hand, the foreign bankers offered to bind themselves, under conditions which we shall presently examine, to guarantee the maintenance of the Treasury gold reserve, and they submitted one rather important counter-proposition. The four per cents, sold at the stipulated price of 1041, were equivalent to a 31 per cent. bond at par,' whereas the loans of 1894 had sold on a par basis of three per cent.; but the alternative proposition of the syndicate was that they would pay par for a three per cent. bond, provided pay ment should be expressly stipulated in gold. This was, on the whole, a safe proposition for the bankers to make, because express provision for gold payment could not be inserted without an act of Congress, and there was not the slightest likelihood that any such act could pass. A bill with that provision was in fact introduced in the House of Representatives in February, and was immediately defeated by a vote of 167 to 120. This vote was taken February 7th; on February 8th the Secretary of the Treasury signed a contract on the syndicate's own terms with Messrs. J. P. Morgan & Co. and Messrs. August Belmont & Co., the second of these firms represent ing the powerful foreign house of Rothschild. The bonds thus sold amounted to $62,315,400, and they brought $65,116,244.

The wild clamor which instantly broke out at Washington seemed actually for the time to stun the Administration party. It was echoed in the oppo sition press; nor, indeed, did the Administration's supporters throughout the country show, as a rule, anything but bewilderment. In the storm of angry denunciation, perhaps the only unmoved figure was the President; who, having chosen his position, held to it with characteristic resolution. In his special message to Congress, February 8th, Mr. Cleveland wrote that in his judgment the transaction " promises better results than the efforts previously made in the direction of effectively adding to our gold reserve." Ten months later, in his Annual Message of Decem ber 2d, he declared that he had " never had the slightest misgiving concerning the wisdom or pro priety of this arrangement," and that, individually, he was " quite willing to answer for his full share of its promotion." Let us now see what happened between the dates of these two declarations.

The two considerations in the contract with the syndicate, which had not appeared in any previous bond sale, were contained in the following provisions: " At least one half of all coin deliverable hereunder shall be obtained in and shipped from Europe," and " the parties of the second part, and their associates hereunder, . . . as far as lies in their power, will exert all financial influence and will make all legitimate efforts to protect the Treasury of the United States against the withdrawal of gold pend ing the complete performance of this contract." Since it was also stipulated that deliveries of gold from Europe " shall not be required to exceed 300, 000 ounces per month," and since 1,75o,000 ounces in all were to be imported in order to fulfil the con tract, it followed that this engagement in the Treas ury's behalf would hold good during about six months.

Now there had been only two important sources of gold withdrawal from the Treasury: gold-export ers who were unable in any other way to meet their obligations on an advancing foreign exchange market, and subscribers to the bond-issues who converted their notes into coin to make their pay ments. There had been practically no withdrawal for simple hoarding purposes; in his intimation to this effect, in his report of 1894, Secretary Carlisle was mistaken.' The syndicate's engagement, then, was first a pledge to obtain all gold for their sub scription elsewhere than at the Treasury, and second, it was a promise to stop, if humanly possible, the redemption of notes for export gold. The first of these pledges was simple enough; the second in volved extraordinary difficulties.

We have seen in another chapter that withdrawal of Treasury gold for export purposes had become a measure of necessity, because the sterling bankers had in the ordinary course of business contracted foreign obligations which they were forced to meet through gold remittances, while they could get no gold for the purpose except at the Treasury's re demption office. If, then, the syndicate was to " protect the Treasury against the withdrawal of gold " for export purposes, it must do one of two things—provide in this country, at its own expense, the necessary gold for export, or provide a credit fund in Europe which should make gold remittances unnecessary. The first it certainly could not do; the comptroller's compilation of the previous De cember had shown that all the national banks in the country held only $146,000,000 gold, while the New York banks in February held only $82,000,000. No banker or combination of bankers had the power, in case of repetition of 1894's exchange market conditions, to procure the $ioo,000,000 gold which had gone out that year on export.' The second expedient was possible. A banker's draft on London, forwarded to a London creditor, must be redeemed in current English funds at a Lon don institution. If the New York maker of the draft has shipped the necessary sum in gold, the draft will be honored on the arrival of the specie. But if the maker of the draft has borrowed the requisite sum in London on his individual credit, he possesses equally the means of foreign settlement. This was the principle on which the syndicate of 1895 under took to act. They proposed to sell in New York whatever drafts on London should be needed by the U. S. Bureau of Statistics; foreign-trade statement for Decem ber, 1894.

banking and mercantile community, and to meet the drafts in London through the use of their own credit on the London money market.

The magnitude of this undertaking will readily be perceived. If the demand for such remittances, which had forced the hundred million dollars gold exports of 1894, were to be repeated, the failure of the experiment was inevitable. No banker or com bination of bankers could borrow any such amount on its joint or individual credit. This well-known fact explains the reservation in the, contract, whereby the syndicate pledged results only " so far as lies in their power." Both they and the Government, however, took the chance. With the double pur pose of ensuring themselves against competitive sales of exchange and of ensuring the Treasury against export - gold withdrawals by competing bankers, the syndicate next took the unprecedented step of binding together in the undertaking every banking house and every "bank in New York City with important European connections. All of these firms and institutions were admitted to the syndi cate, part of the new four per cent. loan being dis tributed among them at profitable rates. In return for this allotment, they bound themselves, as the Belmont-Morgan syndicate had already bound itself, to draw no gold from the Treasury pending the exe cution of the contract. It was hoped by this means to set the Treasury on its feet.

The London critics instantly pronounced the undertaking impossible.' They pointed out, cor rectly enough, that the syndicate proposed to dam up a natural commercial movement; from this they reasoned that eventually the dam must overflow, and that when this happened, the artificial obstruc tions erected by the New York bankers would be instantly swept away. We shall presently see how far this London judgment had a solid basis. The syndicate, however, was working on a different theory. Its members were aware, of course, that a withdrawal of foreign capital equal to that of 1894 or 1893, with the consequent excessive demand for drafts on London, would break down the whole experiment. But suppose this demand for remit tances to Europe were not to be repeated. The mere fact that the Treasury and the currency were protected would remove one very important cause of the recent flight of European capital. If, in ad dition, such an agricultural year as 1879 or 1891 were again to be witnessed, it would be found that the syndicate operation had merely equalized the whole year's movement of exchange. In the spring they would sell their drafts on London, depositing at New York in current funds the proceeds of the sale. In the autumn the possession of this accumulated New York fund would enable them, when London needed remittances to New York, to draw on their New York deposits, sell the drafts to the European remitter, and with the proceeds pay off their London debt. It was, perhaps, a doubtful chance, but it was worth the trying.

On the basis of such contingent calculations, this remarkable experiment began. During many weeks, the moves of the syndicate were watched with scep ticism in both London and New York. But the operation went on smoothly. Except for some in significant West Indian consignments, there were no gold exports, and gold withdrawals from the Treasury fell to an unimportant minimum.' The foreign-exchange market continued very strong; in fact, the ruling rate was higher even than the aver age of 1894; but at these rates the syndicate supplied remitters with all necessary drafts on London, and the gold contracted for delivery from Europe duly arrived at the rate of five million dollars monthly. From the New York banks associated with the syndicate had been obtained, within a few weeks after the signing of the contract, most of the $37, 500,000 domestic gold pledged for delivery to the Treasury. On February 9th, these banks reported specie holdings of $82,263,900; on April 6th, they held $64,471,200. They made no effort to recoup themselves through note redemption at the Treas ury; a fact which at least suggests the possibility that skilful negotiation might have achieved the same result in 1894. On June 25th, the hundred million Treasury reserve was again intact; on July 8th, it reached $107,571,230.

Long before July, the syndicate's expectations had apparently been fulfilled by a decidedly favor able turn in all the markets, and by a complete re versal of attitude by European investors. In these regards, the events of 1895 were among the most remarkable in our history. It must be remembered that the industrial paralysis of 1894 had alike affected import trade and home production; both had fallen to the lowest level in many years. It resulted that surplus stocks of merchandise were abnormally small. A sudden demand would exhaust them very quickly, and such a demand began almost within a month of the February bond negotiation. The buying power doubtless came in some degree from actual con sumers; but it was chiefly speculative, originating in the growing belief that with the Government's finances out of danger, healthy industrial conditions would return. During this season, the commercial markets presented for a time a spectacle almost equal to that of 1879. Hardly an article of domes tic produce or manufacture failed to rise in response to this increased demand.

The iron market led the movement. From a weekly record of 157,000 tons in February, the country's iron production rose by November to 217, coo tons per week, the largest in the country's history, and in spite of this heavy increase in the output, the stock of iron on hand for sale had been decreased through urgent purchases nearly half a million tons.' The price of iron, meantime, had risen two to three dollars per ton. Along with this advance in iron came rapid recoveries in the grain markets; in cotton, provisions, oil; and notably in print cloths, the staple of the dry-goods market, whose price rose twenty-five per cent. between Feb ruary and November. While these advances in commercial prices were in their beginning, during the early spring, the market for securities moved up slowly and suspiciously, foreign scepticism over the bond operation still finding voice in speculative sales which offset the timid investment purchases at home. In May, however, came a sudden change. The month began with large purchases of new American securities by London banking houses. Bonds issued by several important railways, for im provement purposes, found a ready gale abroad, and brought unexpectedly good prices. This was ap parently the only stimulus needed for real recovery of confidence. Almost simultaneously, a buying movement in " Americans " began on all the im portant European markets.

This sudden and enormously heavy foreign buying was in part explainable by the condition of the foreign investment markets. Since the Baring col lapse of 1890, English capital had been timid and its investment and speculative ventures few. Against £189,436,000 new security issues taken by London investors during 1889, only Z49,141,000 had been floated in 18932 But now an important change was taking place. In 1885, gold had been discovered in the Kaffir country of South Africa; two years later, the gold production of that country had be come considerable, and London capital began to seek investment in the Transvaal; by 1892, the annual output of the mines on the Witwatersrandt alone exceeded twenty million dollars.' Towards the middle of 1894, the incorporation of joint-stock mining companies in London, enormously capital ized, was undertaken with unusual activity. The Rhodeses and Barnatos of the African domain began to cut an important figure on the London and Continental markets; with the opening of 1895, an old-fashioned popular craze of speculation broke forth throughout England.

It chanced, by one of those odd coincidences of which financial history is full, that this fever of speculation reached its height at the very moment when the United States Government-bond syndicate had apparently solved the problem of the Treasury. The sudden reversal in the American situation, and in particular the rise in prices on the commercial markets, offered at once a fresh field of activity for the excited London adventurers, and they started in suddenly to buy American securities. During two weeks of May, 1895, this foreign buying was so heavy on our own exchanges that every outbound European steamer carried a mass of American stocks and bonds consigned to European houses. Sterling exchange broke from the high level of $4.89, a figure which it had maintained ever since the Febru ary contract, and which would ordinarily compel gold exports, to $4.861, or par, touched in the second week of May. The syndicate bankers were already selling in London drafts on their New York deposit fund, and paying off their London money market obligations.

So far the experiment appeared to be assured of complete success. Whether, in the event of a par ticularly large and profitable merchandise-export market in the autumn, the syndicate could have achieved all of its purposes, is a matter of some uncertainty. But to those who looked below the surface, there were signs of danger in the very phenomena which were now inspiring the business community with new hopes. For one thing, the time was extremely unfortunate for hasty and ex tensive domestic speculation. The speculators ran far beyond the limit both of genuine trade demand and of available domestic capital. We have seen in previous chapters the bad results of such operations, even in the best days of the resumption year; we have also seen how far a similar movement paved the way in 1892 for the collapse of 1893. The com mercial consequences of the speculation of 1895 were similar to those of preceding years. Prices were carried so high as to serve the purpose, doubly mis chievous under existing conditions, of increasing merchandise imports and checking exports. During the first half of 1895, imports increased ten million dollars a month over the corresponding periods of the year before.

Nor were results any more fortunate in the export trade. The syndicate's hopes in this direction were utterly disappointed—partly, no doubt, because the corn-crop failure of the previous season had left little of that commodity to sell, but chiefly because of the wild domestic speculation for the rise in wheat. The early American wheat crop was dam aged by frost; the later crop was very large; but the speculators, acting on the basis of the first re ports, actually ran up the price, between February and June, thirty-three cents a bushel. As in the fall of 1879, this excessive movement brought the export trade to a halt. While speculation raged in Chicago, Russia was quietly supplying the needs of European consumers. In half a dozen staple markets, the course of events was similar. As against the .heavy excess of merchandise exports during 1894, imports during the first nine months of 1895 actually exceeded exports by forty-three million dollars—decidedly the largest balance of merchandise trade against us since the climax of speculation in 189o.

What happened with wheat happened also with securities. Prices of stocks and bonds rose rapidly in May, in response to the foreign buying; but in the next two months American speculators for the rise carried prices so much higher that Europe, still more or less sceptical over the syndicate experiment, seized on the tempting opportunity to secure a profit, and sold back in quantity its holdings of American securities. Even the new four per cents, one half of which the syndicate had placed in Lon don, taking all possible precautions to prevent their early return, were unloaded on the New York market almost as soon as they were released; the home speculators had forced up the price, within two months, from 119 to 124.

These various results followed the inexorable rule of commercial logic; but they doubled the strain upon the syndicate. Foreign exchange returned quickly to the normal gold-shipping point, after its sudden fall, and once more the bankers had to bor row heavily in London. Now, moreover, two radi cal defects in the syndicate's plan of operation began to betray themselves. The bankers had contracted to obtain one half the gold for the Treasury in Europe. Economically speaking, this was a mis take. It added precisely the sum of the gold im portations to the syndicate's London debt, and it increased a domestic money supply already notori ously excessive.

. The second defect in the syndicate plan was in evitable from the nature of the operation. By the coalition of all the international houses at New York, the bankers had in a certain sense cornered the foreign exchange market. They could not, to be sure, exact any very exorbitant price for drafts, because such a policy would have forced mercantile remitters to combine for mutual protection and ship gold on their own account. But the minimum selling price fixed for their drafts by the syndicate in midsummer was $4.90 to the pound sterling. A few months before, when drafts were " covered " in export gold, bankers had sold these sterling drafts freely at $4.88+ or less. That is to say, ,a New York merchandise importer with a foreign-trade debt of £10,000 to settle, had to pay $49,000 for his draft in the middle of 1895, whereas the highest rates of 1894 had cost him only $48,850. The motive of the syndicate bankers in exacting this high rate was ob vious enough. The success of the experiment was growing doubtful; their London borrowings had become very large. They might he forced to export gold, and they fixed their price for sterling drafts so high as to protect themselves from loss in such emergency.

But in so doing, they opened a wide inducement for competitive sales of exchange. Apparently the syndicate alliance of February had swept the market clear of competition. But the syndicate was destined to pass through the experience which awaits every manipulator of a market corner, whatever his pur poses or motive. All commercial experience teaches that the most skilful possible preparation for a corner will, in nine cases out of ten, overlook some source of supply, able to fill current demand at lower prices, or that in the final strain upon the market some new ,;ource, hitherto unheard of, will be discovered. Ex actly this happened in 1895. With a demand for millions of exchange drafts in the market, with no exchange house in New York selling below $4.9o, and with a trade profit in selling exchange at $4.881 and shipping gold to " cover," a New York coffee importing house with powerful European connec tions entered the sterling market. It offered drafts one cent per pound below the minimum of the syndicate; the syndicate houses made no change in rates, and their new competitor therefore instantly had the market in its hands.

On July zoth, this house presented $1,000,000 legal tenders at the Treasury for redemption and shipped the gold to London against its sales of sterling in New York. During the next five months, $65,000,000 gold was shipped, all of the specie being obtained from the Treasury. From its summer maximum of $107,000,000, the gold reserve declined again to $63,000,000 on December 31st.' Recognizing that its undertaking to protect the Treasury had broken down, the syndicate did what it could to help out the Government through volun tary exchange of gold for notes. In August and September, it thus paid over some twenty millions gold, which was immediately engulfed in the specie exports; this being only the old and futile expedient of 1885, of 1893, and of 1894. In October the syndi; cate contract expired by limitation, and even the voluntary " reimbursement " ended. Apparently, the syndicate experiment had failed, and nothing was left for the United States but a repetition of the financial strain of 1894.

But the situation was not by any means as hope less now as it had seemed to be a year before. The syndicate's partial mistakes of judgment and the plunge of domestic industry into speculation had done mischief, but they could not wholly offset the real recovery of trade during the interval of reassur ance. There were other reasons why the outlook was less discouraging. The Fifty-third Congress, whose action or inaction on the question of the cur rency had alternately menaced the public credit, had gone to the people in November, 1894, and had been repudiated by an overwhelming vote. The Democratic House plurality of ninety-one under the elections of 1892 was turned by the vote of two years later into a Republican plurality of one hun dred and forty. Little was expected in the way of constructive legislation, even with this radical change of membership, and nothing was obtained. But it was at least anticipated, and correctly, that the Fifty-fourth Congress would take warning from the fate of its predecessor, and put a stop to the policy of financial agitation.

But more important than either of these two in fluences were two facts which bore directly on the currency dilemma in the closing months of 1895; first, that the country's actual commercial use of money was nearly eighteen per cent. greater than in 1894 and larger by twenty per cent. than in 1893 '; and second, that the very process through which the Treasury's gold, accumulated through its suc cessive loans, had been drawn out, had added to the Government's surplus of legal tenders no less a sum than This was one fifth of the entire amount of legal-tender currency in existence. Ex cept through a revenue deficit, this Treasury legal tender surplus was removed from the outside cur rency supply, and the revenue deficit, as a result of the merchandise import movement, had fallen to comparatively small proportions. At the close of December, 1895, even the New York banks held twenty-four millions less in legal tenders than they had held a year before, and twenty-seven millions less than at that date in 1893.' These were important changes; but they had not yet undone the mischief. Trade at the close of 1895 was certainly no more active than at the close of 1891, and the outstanding supply of paper currency was as large or larger.' That the situation was still sufficiently precarious was shown not only by the gold withdrawals on the breaking of the deadlock in exchange, but by a sudden and violent outpour of gold in December, 1895, when the extraordinary Venezuela episode stirred the London investment community to its depths, and threw on the Ameri can market a load of liquidating foreign sales. But the nature of the problem was now much more plainly understood by both Government and people. The Administration acted promptly, and in a differ ent way from any of its previous experiments. On January 6, 1896, the Treasury announced a new four per cent. loan for the very large sum of one hundred million dollars.

Subscriptions for this loan were again required in gold, and the use of gold obtained from the Treasury through note redemption was again as generally practised as in 1894. But we have seen that the floating supply of Government notes available for such purposes was now materially reduced. Gold or legal tenders subscribers must obtain to cover their subscriptions, and the demand for both these forms of money was increased by the fact that the loan was offered at popular subscription to the highest bidders, and that the number of intending subscribers was known to be extremely large. The result was curious. Some of these subscribers made an open market bid for gold coin '; some adopted the much more unusual expedient of bidding a frac tional premium for legal tenders which might be used to get gold from the Treasury.' One or two bankers paid a premium for gold abroad, as the syndicate had done in 1895, and imported it for subscription purposes; and this incoming gold actually passed on the ocean outbound gold con signed from the United States to Europe.' All this situation was abnormal enough, but it arose from two really encouraging conditions—the existence of many competing bidders, which occasioned a de mand for currency several times larger than the actual face value of the loan, and the fact that the dangerous over-supply of Government de mand obligations on the market was already ma terially reduced and was about to be reduced much further. In effect, the Cleveland Administration was at last doing, by virtue of necessity, exactly what Hugh McCulloch had undertaken to do, thirty years before; it was converting its floating debt into a funded loan. That it was not retiring perma nently the notes thus redeemed from a redundant circulation, and replacing them by a conservatively constructed bank-note circulation, was not the Ad ministration's fault. From his first report to his last, Secretary Carlisle had discussed and urged this solution of the problem; but Congress would not listen.

The loan of 1896 succeeded. It was, in fact much more than merely the successful rehabilitation of the gold reserve against United States notes. The Government loans of 1894 were placed, it will be recalled, only through urgent personal solicitation with the banks, and the loan of 1895 amounted to the purchase, at a very high price, of the services of an international syndicate to protect the gold reserves. But the $1oo,o00,coo four per cent. loan of February, 1896, offered unreservedly to the highest bidders among the investing public, elicited no fewer than 4640 individual bids, applying in all for no less than $568,000,000—one of the most gratifying responses in the Government's fiscal history.' The accepted bids ranged all the way from I to' to 120, whereas the four per cents. of 1895 had been taken by the syndicate at lo4, had sold no higher than 124 at the height of that year's midsummer speculation for the rise, and had been quoted at only 113 when the loan of 1896 was on the market.

The resolution, unanimously adopted by the New York Chamber of Commerce on February 6th, the day following the opening of bids, to the effect that "the success of this loan should dispel every doubt as to the ability and intention of the United States Government to redeem all its obligations in the best money in the world," correctly enough reflected the inference of financial markets. So far as concerned the results in the Treasury's own finances, it remains only to say that on the day before the instalment payments against the loan subscriptions began, the Government gold reserve had fallen to $44,363,493, and that, within seven weeks, it had risen to $128, Gold exports, in connection with uneasiness over the Presidential campaign which followed, did, to be sure, again bring the reserve on July 23d, as low as $89,669,975, and another proffer by the banks of $23,000,000 gold in exchange for legal tendcrs in the Treasury was considered necessary.' But the swift movement of events proved that even this recourse was superfluous. Long before 1896 was over, the foreign exchanges had turned in favor of New York; the gold reserve never, after July, 1896, fell back below $too,000,000; a new era in American finance, which we shall have next to review, had opened, and in March,. 19oo, when the statute was finally passed, declaring gold to be the standard of value in the United States, this proviso was inserted: " It shall he the duty of the Secretary of the Treasury to set apart In the Treasury a reserve fund of $15o,000,000 in gold coin and bullion, which fund shall be used for such redemption purposes only." To this was added the definite instruction to future Secretaries of the Treasury, that this $130,000,o0o fund shall be maintained "by exchanging the notes so redeemed for any gold coin in the general fund of the Treasury " and " by accepting deposits of gold coin . . . in exchange for the United States notes so redeemed "; and that if, in spite of these pre cautions, "the gold coin and bullion in said fund shall at any time fall below $too,000,o00, then it shall be his duty to restore the same to the maximum sum of $15o,00l,000 by borrowing money on the credit of the United States." As for reissue of Government notes redeemed from the gold reserve, the Act of Iwo established the further highly im portant rule that such notes " shall be held in the reserve fund until exchanged for gold." It will be observed that this statute operated to reform, in five important particulars, the evils of the old system whose effect on the public credit and on private finance we have seen in our previous chapters to have been altogether disastrous. First, the gold reserve against United States notes is absolutely set apart as a distinct fund for a specific purpose, and not left to contradictory interpretation of the language of a compromise statute by legislators and courts.' Second, the $10o,o00,o00 minimum is increased to $1 5o,000,000, in line with Secretary Carlisle's opinion.' Third, the use of this gold reserve to meet a deficit in revenue is forbidden—a use which was a funda mental cause of its depletion in 1893.' Fourth, the raising of public loans to make good a serious inroad on the gold reserve; through redemption of United States notes to procure gold for export purposes, is not only authorized but required—a power over the public credit which had up to that time been strenu ously contested.' Fifth, through the holding back of notes once redeemed, until the gold reserve is made good again, provision is made for normal con traction of the outstanding supply of notes at such a juncture—the lack of which provision had repeatedly, in the preceding decade, aggravated the strain upon the Treasury, and deprived it of the self-protective power enjoyed by all great banks of issue.' In other words, the time was very near, even in the troubled year 1896, when the loose and unscientific fiscal statutes, on which had converged the doubts and around which had raged the political conflicts of a generation past, were to be replaced by a sound and unmistakable declaration of policy for the future.

I have anticipated the progress of our narrative by this glance ahead at the legislation of 19oo, because it was in many ways the logical sequel to the events narrated in this chapter. It now remains to tell con secutively the very extraordinary story of American finance after 1896—a story which has no parallel for dramatic contrasts in the history of the United States, and few, if any, in the financial history of the world.

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