The daily union. [volume] (Washington [D.C.]) 1845-1857, 1855-04-21

Diary made the following report
b. the act Of the gath March 1914 Congress aathors
the President 10 borrow twenty-five millions ~ doAs
The Treasury Department advertised for ten millions
this loan, to be taken the ID Of May following %
that day a contract duly executed with Nr JAcce
Barker and sundry other persons for portion Of these .
millions upon the following terms and conditions wit
lightweight dollars in money for each hundred dellNr,
ia stock and he United States engage II any part og M
sum Of twenty-five millions Of dollars authorised to h
borrowed by the act Of Gath March, 1914 is borrowed
OF the shall be extended 10 the persons VIE
may then hold the stock any part OF IT, Issued or ,s
present loan Of ten millions
The necessity for rosorag 10 this condition. 10 order
the negotiation OF part OF the loan be en-
planned only hy the embarrassment Of the treasury
and the uncertainty OF its future resources depending
they did upon the conclusion of the existing Th
extraordinary terms, however not uneNamp.ed Aaa
did originate with these contractors. similar
don differing only the persons entitled 10 the bcus
m Of ii had been allowed 20 MesSrs Girara Parish UPON
the negotiation Of the loan Of March, 1919 can
be doubt that the terms stipulated ia 1914 Scrr sag
gested by those of the preceding year
II was known that the enemy relying largely upOa
the embarTassmeats OF our finances and y was matter
the FIRST importance obtain the necessary funds tor
ryng pn the at almost amy sacrifice. The effect
in obtaining this loan expected 10 be ayot
the negotiation OF peace In that event the government
stock would have advanced 70 render The condition
attached TO the above loan Of consequence whatesv
But Ia the opposite contingency, which actually did hap
pen il apparent that there would be tendency 70 DE-
cline In the government stocks, which would hriag ruin
upon the contractors, without such condition as th.
which was actually adopted IL Is well known that upo
such OCCASIONS contractors for government, loans tot
paid in instruments usually rely upon the sale or pedged
the stocks received for nstent IN order 10 meet s
II is apparently therefore, that In the present The
who took the loan above market price must
without the condition have suffered losses rou
the continued depression Of Nh. market owing 90 the pro
engaon OF the The terms OF the contract per
tecy legitimate and afforded only fair security The
parties who in that dark period Of history, patriot,
ey stepped forward and rsked their fortunes for the sup
port of the government
In July following lsl4 the government advertised fos
another Of six millions part Of the twenty-five million
oan be closed the 22d August next thereafter This
loan entirely failed The British forces entered the city d
Washington on the 2sth Of that month The banks Of
New York and all south OF that city suspended specie
yments The banks OF Baltimore and Washington sen,
OF all their valuable effects upon the approach o the
N.Y. and the members Of the government dispersed aud did
not again reassembe in Washington until after the
ton Of the city by the British army which took place The
night Of the Goth ON the Both the Secretary OF the reau
opened new negotiations for Of thu twenty five nons
authorized to be borrowed as above stated On the M
lowing day, the 3lst August, ialI contract made
with the officers of the Baltimore and District banks and
sundry other persons for something like TWO and half
millions of dollars, at eighty per cent payable IN the de-
prec.ited paper OF the banks aforesaid.
Upon the negotiation Of this second part Of the twenty
Ave million loan the holders OF the stock in the first part
of the loan claimed the performance OF the condition noer
porated in the original contract Upon this demand
rious difficulties started OF which The most important
these;
FIRST The Secretary Of the Treasury Insisted that ID.
parties entitled the benefit OF the condition not he
parties holding the first stock AT the time the second osn
but the parties who held At the Time Of paying the difference
due account Of the condition. II apparent that tins
a very material point and the position OF the Secfela
nv was in direct conflict with the express terms Of the
This point however, becomes less important @h
is understood that the parties claiming the supplemental
stock have settled this question: among themselves The
committee nevertheless refer the correspondence Of tbs
department. and especially to the opinion of Mr. Pnckn
hereto appended in which the full discussion OF this gu
ton will be found.
Second The Secretary of the Treasury insisted that upon
the negotiation OF the second loan under the law OF 1914
and upon the issuance OF the supplemental stock for The
difference in conformity with the terms OF the contract
the condition exhausted and the government might
thereafter negotiate portions OF that loan upon ANY terms
Without mourning any additional obligations to the bold
sra 81 se original STOCK Saol wac the iecaiou of IN
Attorney General and the Secretary OF The Treasury Rct
upon it, for the express purposens stated in thu letter
the acting Comptroller OF the Gath November lSl4d
giving notice TO the subsequent purchasers OF the stock thai
the supGations contained in the contract had been M
filed or in other words that everything relating to a
contract far respected the stock in existence VA
deemed at the treasury to be settled aud closed The
effect Of these proceedings must have been nj
reduce the value Of the original stock in the market
for it ia plain that the condition attached imports
element in the estimate OF Its value Indeed the pub
lshed letters OF the department. the purpose Of
tfy wing subsequent purchasers prevent their paying TN
additional value given to the stock by the continuance
the condition. The committee concur in the
sion Of this point and they believe hnt nothing but ts
great esarassments OF the treasury would have
duced any public officer place such construction upH
the original contract II Ii well said by the memorable
that IL this construction be correct the treasury might n
equally exhausted the condition. and put end 10 Ga
rights of the parties by negotsn any in considcrabe
Of the loan one-eghlh vi per cent below the org
price and then proceeded sell the whole A
greatly reduced rate. Such construction wosA
have placed in the power OF the department to effect
mplee ruin OF those who had generously aided IN N
government in its extremity
1t Is true however that in adopting these harsh aud 20
just measures, TO the injury OF tho holders of stock
Comptroller Of the Treasury, ia hs letter above quo
says No exacton IL made from them Of any release ws
Of their rights aud claims this respect Their usa
will still remain with themselves and their remedies viii
Congress But the officers OF the treasury do not seem
have bad entire confidence in the legality OF their pro
ings and the sounduess OF their construction OF tie ORG
nal contract for in a short time afterwards, before lA
million loan had been half exhausted The ~
rotary OF the Treasury applied 20 Congress for powas
make new loan, which granted BY the act Of i3e
November 1914. The 9Th section Of this ACT ehpfs
ly authorized the banks in the District Of tou~ N
bs 10 take any part Of this loan. They aecofdEs
~ did subscribe for It, paying the in their gs
deprecated paper. The effect Of this stratagcm, II p3
its very OBJECT was to rid the government enuFsl
OF the condition attached to the loan authorizes r.
the act Of Gath March preceding But while the sostfs
ment Was thus relieved froma Troublesome condition y
rights and Interests OF the former Eho
sacriced Reasons Of State arising from the eaergsat"
OF the time, may have justified this evasion Of far 400
valid contract but ii Ia doubtful whether the strict s
tcnanee OF good hith the part OF the goFefnSts-
wonld not have tended 70 ssstaa igs ersdf - "
market and ITS strength IN the confidence Oi thr pee
However this may be- there can be no question AZ -
proprety Of doing complete justice the present Ise
The memoriaists do not claim any remuneration 'of =
INJURY done 70 the value Of their stock by nouiya
parues that The condition exhausted BY Tho s~M
9usnf act o setting aside the loan Of March and o
70 that Of November That these proceedings did rss
ia great injury must be admitted from the very ns'as