The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1873-01-17
FANCY FINANCE.
Syndicate "Whys" and "Where-
fores" Before the Ways
and Means Committee.
Mr.. MOrtOn'S Practical Views on Bout
wells Agency Scheme.
A New Anglo-American Combination
Requisite to place" the Remain
ing $5Oo,ooOO 900 OF Bonds

WASHINGTON, Jan. 16, 1879.
The following is the statement OF Mr.. Morton,
senior member Of the firm of Norton Bliss Co..
bankers, OF New York, before the Ways and Means
Committee of the House in regard to Mr. Bout
Wells lOan:-Mr Morton remarked that the Secre-
tary OF the Treasury had expressed desire that
he mr. Morton) should say something to the CON-
mIttee in regard to the loan.
The CnAIRMAN--We presume that you under
stand the plan under which the S165, 600, 600 are
Sunded2 DO you know Of any better way OF effect
ing the loan of the balance OF the five per cents
under the existing lawP
Mr.. MoRToN-I do not know of any other method
Of negotiating government loan except by bank
ers.
the metnod9
Mr.. MORTON-I do not know that can.
The CHAIRMAN--Do you know of any alteration
In the law that would be desirable for the purpose
of enecting the balance of the lOan2
Mr.. MORToN-I do not.
The CHAlRMAN-Do you think 1t advisable, all
things considered to proceed with the loan to the
extent of the balance Of the $5Oo,oOOOooS
Mr. MoRToN-I do not know OF any better method
that can be adopted at present, unless Congress
would choose to change the rate OF commission.
Mr.. kELIY-You mean by changing 1t increaS-
ing it,
MIR. MoHroN-Yes. Under the last negotiation
until the maturity OF the call OF the hve-twentes
accrued to the benefit of the Syndicate, OF the par
ties negotiating the bonds, as interest commission.
The CHAlRMAN-Instead Of that what would you
suggest9
Mr.. .MoRroN-I do not think would suggest any
. thing instead or it.
Mr.. BURcHARD-How can the negotiation be
made without paying so high commission, direct
Mr.. MoRToN-I do not know how 1t can be.
Mr.. BURCHARD-Suppose the direct commission
Is increased to one and three-quarters per cent,
one and one-quarter per cent for three months
interest on the five per cent bOndsY
MI. MORTON-That would not reduce the cost OF
the negotiation to the government
NEW SYNDICATE WITH OLD MACHINERY.
Mr.. BURCHARD-But could not the same machn-
cry be used as at present, with the payment OF this
additional commissions
Mr.. MORTON-Precisely. Some gentlemen have
argued that the government should wait for
buyers to come to the Treasury Department FOR the
conversion OF tnelr bonds: IN my opinion the gov.
1t would make any conversion of six per cent
bonds into five per cent bonds.
Mr.. MAYNARD-The money markets Of the world
do not Justify such an expectation?
Mr. MoRToN-It is not the custom. It would be
like Lowell manufacturer waiting for customers
to come to him. Machinery must be used in the
negotiation of national securities as well as of
Mr.. MAyNARD-when this proposition to place
the balance of the loan by syndicate was made
what was the general feeling on the part Of the
ultimate success OF the undertaking
Mr.. MoRToN-It was supposed to be very doubt.
The CHARMAN-were you member of that Syn
Mr.. MoRTON-I was not.
PROPOSITIONS OF INTEREST.
The CHAIRMAN-Do you propose to be a member
Of the new Syndicate
Mr.. MoRTON-I dare say.
Mr.. MAYNARD-n you had thought that the last
syndicate scheme was one that promised success,
and If you had been offered to have been admitted
into 1t, would you have accepted the offer
Mr: MoRToN-Ihe offer was made to us, but we
declined IL for certain reasons. We had very much
hands OF new house in Europe, and there mas
been no time since that loan was made up to the
present moment when the parties who bought the
bonds could get their money back.
Mr. KERR-iOu propose now to become party
to the next syndicate
Mr.. MoRTON-We do.
EUROPEAN PREcEDENrs FOR AGENCIES.
Mr.. KERR-State on what general principles out
side OF this mere machinery that you have been
taking about you think 1t advantageous to the
country to put Its loans upon the markets OF the
world in that way through an agency.
Mr. MORToN-I do not think there Is any other
way for any government to make successful ne
gOtiation unless 1t pays high price for money.
During our war, when our bonds were selling In
Europe at forty or fifty cents the dollar, there
was no necessity for such an agency. SO, too, the
French government, during the Empire, made
popular loan. But with very rare exceptions all
national loans were made through bankers in Lon
don, or bankers who have connections with the
principal money centres in Europe The French
ITS last loan without the aid OF powerful houses
like the Barlngs, Rothscnds and Others there
so many manipuations OF the market which gov
this present loan OF the United States You can
not, OF course; sell your bonds at 81 in London
when the market for the existing bonds IL only 90.
They must be manipulated
Mr. kERR-Ihat is part OF the trader
Mr.. MoRToN-That is part OF the trade.
MI. BRCK-State whether not in the present
condition OF the money market men have lost
money on the last purchase Of United States
bonds.
AN IMPORTANT STATEMENT
Mr. MoRToN-Yes. have said that there has been
no time since the negotiation was made up to the
the bonds could have resold them without loss. /
enend dSt Se success OF new would
who undertook it, their strength and influence.
Mr. BEcK-What interest would parties have in
undertaking this new negotiation If they lost
money on what they have already donep Win not
that loss place the government in a disadvantage
Gus position in regard to putting the loan on the
marketp
Mr.. MoRToN-That would depend altogether upon
who undertake 1t. The money that the govern
ment seeks to reach IL cheap money-trust funds
and the like-that seek safe investment.
Mr. kELLEY-As understand it, II il like the ad-
vice given by Shakespeare in the play OF 'As You
Like IT. ~ have often, when lost an arrow re.
gained 1T by shooting another the se-same way.n
Mr. BURcHARD-But these are different parties.
Mr.. KELLEY know they are; but the principle
seems to be the same.
Mr.. MAYNARD TO Mr.. Norton You are the head
Of the house OF Norton Bliss IL Co., 1 presume
now DO THE BONDS RETURN
Mr.. MAYNARD-I would like to know whether
these new five per cents are coming back to New
York In the ordinary course OF financial operations.
year they have come back but not to a large extent
Mr.. MAYSARD-Have they come back to the ex.
tent that they have been really needed Tor the es-
Establishment Of new national banks
Mr.. M0RToN-lt Is dilcult to answer that ques-
ton. They come back in scattered parcels,
but not 10 any great extent. In fact, there has
been no active demand Tor them here. Our people
here, except for banking purposes, are not satisfied
TO pay ITO or l12 for five per cent bonds. To my
mind the success OF the negotiation depends upon
how influential and powerful syndicate can be
made A combination with three or four Of the
most influential houses In Europe would make
almost any thing success. They have such fol-
lowing ana prestige that people Will take anything
Iney ouer, as they feel they certainly can sell at
very little attention
MT. BURchARD-Do you think that the negotia-
nohs can be made successful under the present