to Mr. Evarts.
Vienna , January 17, 1879. (Received February 1.)
Sir: I learned last evening that in yesterday’s session of the administrative council of the Austro-Hungarian Bank (national), a resolution was adopted to suspend for the present all purchases of silver. Inasmuch as each successive diminution of the category of national silver-consumers produces a new influence tending to the depreciation of that money standard, and is likely to affect American interests, I deemed it [Page 42] desirable to learn-the motive of this action. To that end I this morning paid a visit to a great banking-house here, holding intimate relations with the government, and had a long conversation with its chief, from him I learned the following facts relating to the silver question:
The nominal motive for this action of the Austro-Hungarian Bank is that the mint has now on hand all the silver it can coin from this time to the month of June, and will take no more for the present. The real motive is that both the government and private business circles have become alarmed about the 11 actuating silver-market and its effect upon the future of the country. Under the laws of Austria, establishing and regulating silver as their standard of money, foreign speculators have been sending here the surplus silver of other countries, and disposing of it at rates which gave them a profit of between two and four per cent. In the aggregate, it inflicted a serious loss on the people of this empire. Austria could not refuse to accept silver payments, but she could refuse to store up silver in the mint; and so the banks and dealers would have reason to also refuse its acceptance when offered in bulk. This would stop the speculation in it, which has been going on to the disadvantage of Austria. In a word, Austria will for the present cease to furnish a market for bulk silver; and is hot obliged to increase her silver coinage by any definite amount annually. She is free to act according to the varying circumstances.
From the same personal authority I learn that the German Government has admirably succeeded in keeping secret the amount of its stock of silver remaining on hand. Even with his special means for gaining financial information, he has been unable to procure official data for an estimate of the amount. From such general information as he has gathered, however, he estimates that not more than two thirds of the original stock of Germany has been sold, and that they are managing the remaining third on the basis of a sale at about 50d.
You have doubtless been advised from other legations of the like restrictive action against silver in some other countries of Europe. This is becoming so general a movement on the Continent, almost in proportion to the financial credit and authority of the nations concerned, that it may reasonably raise a question of the propriety of some American legislation which shall increase the liberty of action at the mint of the United States.
I have, &c.,