The Stark County Democrat. [volume] (Canton, Ohio) 1833-1912, 1880-12-30

called in, from the people and turn them
over to the department An immense
amount of capital was represented in
this syndicate and the syndicate that
succeeded it. But the First National
Bank was the only National Bank that
was member Of the successive syndi-
cate. In some of the syndlcates each
party specified the part it would take
and though the First National Bank had
the smallest capital of any of the mem
bers, it always in such cases spoke for
the lions share of the bonds to be
handled. 1t took $3O,0OO,OOO at one
subscription.
When the retunding operations of the
Government were closed, October l
1879. there had been $737 ,98S 800 bonds
placed. Of these $250,000, 900 were four
and half per cents, The greater part
of them passed through the hands OF
the syndicate. At one subscription it
took $3.50 600 900 of the four per cents.
It's advantages were colossal. It's mem
bers practically controlled the bond
uarket, not 30 much by tkeir capital
and position as by their information,
The First National Bank, with it's com
paratively patry capital of half a mil
lion of dollars, handled millions upon
millions of bonds at time. As mem
her of the syndicate it enjoyed the liber-
al, yet discriminating commission allow
ed by John Sherman. After allowing a
uniform commission of one fourth OF l
per cent. to all banks and bankers who
received subscriptions for bonds, John
Sherman, when he felt confident that
the per cents would be successful, is.
sued 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 com
mission were as follows: Upon sub.
scriptions made during six months of
lis than $3.50 700, no commission; upon
subscriptions of 500 900 to ST 100000,
/ of / per cent; uDon subscriptions
ot 81 900 900 to $l0,000,000, one-fOurth OF
per cent, and upon subscriptions OF
over $40 900 900 an additional one tenth
ol per cent. This schedule discouraged
the small banks and bankers through
out the country from participating in the
refunding of the National Debt, except
30 far as their own demands and those
of their customers made it necessary.
The larger banks also felt that injustice
had been done them, and they pursued
much the same course.
John Shtrman wrote that he thought
this sliding scale of commissions would
provoke rivalry among the banks. l
not only failed to do, but bred discord
and ieaIousies. The President of a Ma
tional Bank in this city wrote to him
pointing out his error, and CharaCteriZ
ing his scale of com mmission as "a mis-
taken Fl ,ancial and political policy
"Honest" John Sherman replied that he
had not thought IF the political effect of
his course, and that it was then too late
to change his policy. The political feet
was felt when JOIN Sherman was
spoken OF as a Presidential candidate for
the Republican party. According to a
we'll informed officer of one of the
National Banks of this city, the officers
of National Banks throughout the Coun
try, with the exception of the few in
this city who had enjoyed his favoritism,
were regardless of party, unalterably
opposed to his nomination, and all be-
cause of his discriminating scales of
commissions. While the hundreds of
banks remained apathetic to John Sher.
mans chromatC device, the syndicate
went on subscribing for tens upon tens
of millions and receiving upon the same
tie commission of ne.fourth Of per
cent, and One.tenth additional, The first
National Bank, though having no spe
cia partner or correspondents abroad,
as was the case with many of the pri
vate banks that were members of the
syndicate, became a member of reor
ganized syndicate formed to sell the
bonds of Europe.
But the commissions were not the
only pr, fl that the First National
Bank derived from its bond speCua
ions. 1t seemed to know the proper
moment to buy and the proper moment
to sell bonds. A near relative o! one o
It's Directors held, and still fills, high
place in the Treasury Department. He
is next to John Sherman. Blc the gen
eraI belief in Wall street is that no kind.
ly relative was needed to intercede for
or give information to the First Nation.
al Bank II was we'll known in Wall
street t nat the occasion OF John Sher.
mans extending the time within which
payment for certain bonds was to be
made was for the benefit of what had
become known as his pet bank" The
that it was not the only time
that he came to its rescue are many.
There are hundred things possibly inca
pable of proof, that the Wall street com.
mnnity implicitly believe respecting
JOhn Sherman's connection with this
hank. He 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 tour per cent. bonds it had subsCrib
ed fjr without immediate payment for
the same. II had three months from
the time the bonds were delivered to it
in which to pay for them.
In the meantime John Sherman held
a certificate of deposit in the bank to the
amount of the bonds taken. Thus the
bank got three months credit for the
AMOUNT of its purchase and three
months interest pom it as we'll. When
ever an issue of4 per cents was made
per cent. bonds were called against
hem. tt FIRST National, by means of
he capital III 4 per cents lent it by John
Sherman, was able to purchase the
called SKIES on much more advantageous
terms than other dealers. The interest
On them did not expire until three
months from the date of the calls, 80
hat by purchases of these bonds, either
'or cash or by exchanging four per cent
bonds, the bank increased its rate of in
crest upon tuch portion OF the capita
Oaned it, thus reinvested from one per
cent to one and one-hslf per cent. for the
,hree months. In this way it secured
At least one per cent. interest on tens of
millions of dollars. The holders of
,aIled bonds were Obliged to turn them
lver to the Government at par and in.
crest, l0f for either cash or 4 per cents
At par. Az the syndicate and the First
,tinool 0ok THAR a ner penta at laRa