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ed on an obstinate filibuster and refused to allow the question to come to a vote； until their arrogance was gradually toned down by the discovery that the liberty to dump silver on the Treasury had become a precarious mining asset。 The law provided for the purchase of 4；500；000 ounces a month； 〃or； so much thereof as may be offered at the market price。〃 Secretary Carlisle found that offers were frequently higher in price than New York and London quotations； and by rejecting them he made a considerable reduction in the amount purchased。 Moreover； the silver ranks began to divide on the question of policy。 The Democratic silver Senators wished to enlarge the circulating medium by increasing the amount of coinage； and they did not feel the same interest in the mere stacking of bullion in the Treasury that possessed the mining camp Senators on the Republican side。 When these two elements separated on the question of policy； the representatives of the mining interests recognized the hopelessness of preventing a vote upon the proposed repeal of the silver purchase act。 On the 30th of October； the Senate passed the repeal with no essential difference from the House bill； and the bill became law on November 1； 1893。
But although the repeal bill stopped the silver drain upon the Treasury； it did not relieve the empty condition to which the Treasury had been reduced。 It was manifest that； if the gold standard was to be maintained； the Treasury stock of gold would have to be replenished。 The Specie Resumption Act of 1875 authorized the sale of bonds 〃to prepare and provide for〃 redemption of notes in coin； but the only classes of bonds which it authorized were those at four per cent payable after thirty years； four and a half per cent payable after fifteen years； and five per cent payable after ten years from date。 For many years； the Government had been able to borrow at lower rates but had in vain besought Congress to grant the necessary authority。 The Government now appealed once more to Congress for authority to issue bonds at a lower rate of interest。 Carlisle； the Secretary of the Treasury； addressed a letter to the Senate committee of finance； setting forth the great saving that would be thus effected。 Then ensued what must be acknowledged to be a breakdown in constitutional government。 Immediately after a committee meeting on January 16； 1894； the Chairman； Senator Voorhees； issued a public statement in which he said that 〃it would be trifling with a very grave affair to pretend that new legislation concerning the issue of bonds can be accomplished at this time； and in the midst of present elements and parties in public life； with elaborate； extensive； and practically indefinite debate。〃 Therefore； he held that 〃it will be wiser； safer and better for the financial and business interests of the country to rely upon existing law。〃 This plainly amounted to a public confession。that Congress was so organized as to be incapable of providing for the public welfare。
Carlisle decided to sell the ten…year class of bonds； compensating for their high interest rate by exacting such a premium as would reduce to three per cent the actual yield to holders。 On January 17； 1894； he offered bonds to the amount of fifty millions； but bids came in so slowly that he found it necessary to visit New York to make a personal appeal to a number of leading bankers to exert themselves to prevent the failure of the sale。 As a result of these efforts； the entire issue was sold at a premium of 8；660；917； and the treasury stock of gold was brought up to 107；440；802。
Then followed what is probably the most curious chapter in the financial history of modern times。 Only gold was accepted by the Treasury in payment of bonds； but gold could be obtained by offering treasury notes for redemption。 The Act of 1878 expressly provided that； when redeemed； these notes 〃shall not be retired； canceled； or destroyed； but they shall be reissued and paid out again and kept in circulation。〃 The Government； as President Cleveland pointed out； was 〃forced 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 he said that it was 〃a wise suggestion；〃 and that he had 〃always regretted that it was not adopted。〃
But apart from any particular error in the management of the Treasury； the general policy of the Administration was much below the requirements of the situation。 The panic came to an end in the fall of 1893； much as a great conflagration expires through having reached all the material on which it can feed； but leaving a scene of desolation behind it。 Thirteen commercial houses out of every thousand doing business had failed。 Within two years； nearly one fourth of the total railway capitalization of the country had gone into bankruptcy； involving an exposure of falsified accounts sufficient to shatter public confidence in the methods of corporations。 Industrial stagnation and unemployment were prevalent throughout the land。 Meanwhile； the congressional situation was plainly such that only a great uprising of public opinion could break the hold of the silver faction。 The standing committee system； which controls the gateways of legislation； is made up on a system of party apportionment whose effect is to give an