Wheeling register. [volume] (Wheeling, W. Va.) 1878-1935, 1891-08-24
FOSTER OVERRULED
IN A NETTING OF TaR CABINET on THE
BOND QUESTION.
Some Inside History That Nay Be Of Interest to the
Opposition Of HarriSOn-Earrison Wanted
Lower Rate Of Interest for Bonds
The Extensive Period.
N. Y Herald.


absorbing topic of discussion in bank
parlors, and it will prove what Greeley
used to call mighty interesting read
ing' for the public in general.
From unquestionable authority 1t
leaked out in financial circles that the
blame for the practical failure OF Secre-
tary Fosters plan to extend the four and
half per cent bonds at two per cent
should not rest upon the shoulders OF
the Secretary of the Treasury. Mr..
Foster has been severely criticised Tor
his delay in accepting the proposition
of the New York brokers until 1t was
too late to carry it out, but he has made
no reply and put in no defence.
But Mr.. Foster has been made
scapegoat by the administration. The
responsibility for the failure OF the
scheme rests upon President Harrison
himself. The Presidents obstinacy In
opposing the scheme was the sole and
only reason for its failure. 1t was near
ly six weeks before he would consent,
and then it was too late-the opportu-
| nlty naI gone Oy,
1t is true that about SIS, 900, 900 OF the
bonds have been presented for extern
sion at two per cent, but the great plan
was to form syndicate Of big New
York banks to take all they could get OF
the four and haifs, extend them at
two per cent. and deposit them as secu-
rity for additional circulation as means
of helping out the money market, which
was then in a condition which caused
general anxiety and apprehension In
| financial circles.
The result of the opposition OF Presl-
dent Harrison and the laundering pol
lev of the administration in causing the
abandonment of the scheme will be, in
the opinion of the best posted bankers
| in Wall street, that the four and hair
per cents will sell below par on Septem-
| Der /.
az would not give more than 9s for
four and half per cents" said prom
inent bank president yesterday. 81
will make d prediction that early in
| September our bonds will be selling at
that figure"
II that proves to be the case 1t will be
| the first time United States bond has
sold below par since the darkest days
OF the war. 1t will not be creditable
fact to go upon the record OF the Har-
risOn administration, and will undoubt-
edly be made use of as Democratic am-
munition in the coming political cam
paign.
When Secretary Foster found himself
with an empty treasury and with the
prospect of no money to redeem the ma
turing four-and -a-halfs he visited New
York last May and had his famous con-
ference with the New York bank presi-
dents, whose advice and aid he badly
needed. This was the meeting, it will
be remembered, at which the resolution
of President E. H. Perkins, Of the I'm
porters' and Traders National Bank,
was unanimously adopted recommend
ing the extension Of the maturing four
and-a-halfs at per cent. All the
bankers present, representing the prin-
cipal New York banks, expressed
willingness not only to continue at
per cent all the four-and-a-halfs then
held by them, but also to take out add
tional bonds against new circulation.
They pledged themselves, moreover, to
organize powerful syndicate TO carry
out this plan. Mr.. Foster had talked
Of continuance at II per cent, but
he came from the conference heartily
in favor of the per cent rate.
When he returned to Washington the
first thing the Secretary did was to lay
before the President and the Cabinet
at special Cabinet meetlng-the re-
suit of his visit to New York. he told
of the offers of help from the New
York bankers, of the contemplated
syndicate to take the four and one
half at two per cent and of the happy
solution of the problem confronting
the treasury which this plan offered.
The President opposed this plan so
enthusiastically supported by the Sec
rotary. Notwithstanding that two per
cent is lower rate than any govern
ment bond in the world was ever fioated
at par, the President thought two per
cent was too much. He thought the
bankers ought to float the bonds at a
still lower rate. He had sentimental
idea that the appropriate figure would
| be about 1.s215 per cent, because it
was just one-half Of the old war time
3.65 bond, which cost one cent per
day.
1t will not surprise the world to know
that Farmer Jerry Rusk, the Secretary
Of Agriculture from the wild and woolly
West, supported the Presidents view of
it; but it will be a surprise, as 1t was to
Secretary Foster, to lean that the level
headed Secretary Of the Navy, Benja-
min F. Tracy, also sided with Mr.. Har-
riSon.
Mr.. Foster found himself unable to
convince the President that, having
come fresh from the financial center of
the country, where he had been in touch
with the most influential bankers of the
United States, that he was thoroughly
posted as to the situation and the posi-
bilities as to what could be done and
what could not be in the way of the
bond extension. The Secretary of the
Treasury was overruled and outvoted,
and the scheme was laid over.
II was nearly six weeks before Secre-
tary Foster could wiring from the Presi-
dent his reluctant consent to the two
per cent. extensions Meantime as the
Herald showed the other day, the New
York bankers had grown tired of wait
ing. Mr.. Perkins, the father OF the
scheme, had gone to Saratoga in dis
gust. All talk of the syndicate to take
up the bonds and buy new ones for cir
culation had ceased, and, In brief, the
opportunity had gone by.
Failing to hear anything from Secre-
tary Foster the New York brokers nat
urally held him responsible for the de-
Law and he has come in for some pretty
sharp criticism for his failure to carry
out plan in which he seemed to be so
favorably interested. 1t was not until
Yesterday that New York brokers