Lancaster daily intelligencer. [volume] (Lancaster, Pa.) 1864-1928, 1880-12-21

much by their capital and position as by
their information. The First national
bank, with its comparatively paltry capital
| of half a million of dollars, handled mil.
lions upon millions of bonds at a time.
As a member of the syndicate it enjoyed
the liberal yet discriminating commission
allowed by John Sherman. After allow
| ing uniform commission OF One-iOurth OF
one per cent. to all banks and bankers who
received subscriptions for bonds, John
| Sherman, when he felt confident that the
four per cents would be successful, issued
a circular which virtually threw the profits
of placing the bonds into the hands OF the
syndicate headed by the First national
bank. His rates of commission were as
follows; Upon subscriptions made during
six months, of less than .s1OO, 900, no COM
mission upon subscriptions of 500, 600 to
81, ,OO0, 900, one-eighth of one per cent. ;
upon subscriptions of 81, 600, 600 to $1O,-
| OOO, 900, One-fourth of one per cent, and
upon subscriptions of over 80, ,000, 600. an
| additional one-tenth of one per cent This
schedule discouraged the small banks and
bankers throughout the country from par
| ticipating in the refunding of the national
debt, except so far as their own demands
and those Of their customers made it nee
cssary. The larger banks also felt that in
justice was being done them, and they
pursued much the same course. John Sher-
man wrote that he thought this sliding
scale of commissions would provoke rivalry
among the banks. 1t not only failed to
do so, but bred discord and jcalousies.
The president of a national bank in this
city wrote to him pointing out his error
| and characteriZinS his scale of commits
sion as "a mistaken financial and political
pclicy.'' "HOnest'' John Sherman re-
piled that hc had not thought OF the
political effect of his course, and that it
was then too late to change his policy.
The political effect was felt when John
Sherman was spoken Of rs 4 presidential
candidate for the Republican party. Ac-
cording to well-infOrmed officer of one Of
the national banks of this city the officers
of national banks throughout the country
with the exception of the few in this city
who have enjoyed his favOritism, were. re-
gardless of party, unaltcrably opposed to
his nomination-and all because of his
discriminating scale of commissions.
While the hundreds of banks remained
apathetic to John Sherman's chrOmatic
device, the syndicate went on subscribing
for tens upon tens of millions and recciv
ing upon the same the commission of one
fourth of one per cent, and and Onc-tenth
additional. Tho First national bank,
though having no special partner or corrc-
spondents abroad, rs was the case with
many of the private banks that were
members of the syndicate, became men,
Der of rcorganized syndicate Termed to
sell the bonds in Europe.
But commissions were not the only
profit that the First national bank derived
from ito bond speculations. 1t seemed to
know the proper moment to sell bonds.
4 near relative of one of its dire ctOrs held
and still fills, q high place in the treasury
department. He is next to John Sherman.
Bat the general belief in Wall street is
hat no kindly relative was needed to in
tercedc for or give information to the First
national bank. Ie was we'll known in
Wall street that the occasion Of John
Shcrmans extending the time withinwhicl
payment for certain bonds was to be made
known rs his ''pet bank The allega-
tions that it was not the only time that he
came to its rescue are many. There are
hundred things, possibly incapable of
proof, that the Wal! street community i'm
plicitly believe respecting John Sherman's
connection with this bank.
lie lent it the government credit to the
extent of millions, and with comparatively
no security. This was done by allowing
the bank to take the four per cent. bonds
it had subscribed for without immediate
payment for the same. 1t had three months
from the time the bonds were delivered to
it in which to pay for them. In the mean
time John Sherman had 4 ccri iticatc of dc-
pOsit in the bank 70 the amount of the
bonds taken. Thus the bank got three
months credit for the amount of it's pur-
chase and three months interest upon it
as well. Whenever An issue of four per
cents was made six per cent bonds were
called against them. The First national,
by means Of the capital in four per cents
lent it by John Sherman, was able to pur-
chase the called skies on more advantage
GUS terms than other dealers. The interest
Oh them did not expire until three months
from the date Of the call, so that by pur
clascs Of the bonds, either for cash
or by exchanging four per cent.
bonds the bank increased its rate of in
terest upon such portion Of the capital
loaned it, thus reinvcstcd from one per
cent. to one and half per cent. for the
three months. In this way it secured at
least one per cent, interest on tens o: mil
lions of dollars. The holders of called
bonds were obliged to turn them over to
the government 1T par and interest, 1Oli,
for either cash or four per cents ut par.
AS the syndicate and the First national got
their four per cents at less than par, they
were able to make more advantageous
terms than the government to holders of
the called bonds, and make handsome
profit by the operation.
AS to results, it is certain that whereas
John Sherman was poor, now he is rich,
and the First national bank has made
greater profits in proportion to its capital
than any bank ever did in the same length |
of time. Five years ago its surplus WAS
$500, 600. In its last quarterly statement,
made Oct. l, 1880, its surplus was given at |
2.OOO 600, and its profits for the quarter
S222, 34G.53. Jan. 1, 1880, it declared a |
dividend upon it's stock of 100 per cent. !
cash, an amount in the aggregate equal to
its capital stock. This was in addition to
the 10 per cent. quarterly dividends that
it pays. The bank is practically owned
by the directors, and they having received
in the shape of one dividend the par value
of their shares, are content to hold them
for 4 profit of 40 per cent. u year. In adj
tlitiOn, it is said to have contributed libcr-
ally to the Legitimate Expenses of every
political campaign. Its contribution to
the October elections in Ohio and Indiana
is reported to have been $40, 600, while it's
share in the general election is believed to
have been large yet unknown quantity.
81 Am All Played OUT
is common complaint. Ii you feel so, get u
package of kidney Wort and take it and you