The morning call., 1891-06-07
The STORY OF A
GREAT FAILURE.
How the Barings Lost Money
in South America.
Millions Invested In Doubtful Enterprises.
Wholesale Bribery Of Govern
ment officials.
Special to THE MORNING CALL

NEW YORK, June 6.-As soon as the col
lapse of Barring Brothers, the London bank
er5, was announced the New York World
sent staff correspondent to the Argentine
Republic to inquire into the investments
which preciptated their failure. The cor
respondent made a thorough investigation
and his report makes a remarkable story,
showing how Charles Ii. Sanford, Yankee
drummer for the sale of pills and toilet
preparations, first secured a membership in
the American firm of S. B. Hale & Co. in
Buenos Ayres, and after making S1,000000
by financial coup, went to London and
won the confidence of Lord Revelst0ke. the
head of the Barring firm. thence returning
to the Argentine and investing untold mill
ions OF the Barings' gold in doubtful enter
prlses ahd securities.
AN AMERICAN ADVENTURER.
Twenty-Five years ago Sanford was on
the east coast of South America and
travelled as drummer for New York
firm, dealing in drugs and chemicals. The
firm failed and he turned his attenton to
the firm OF s. B. Hale & Co., whose
members were about to retire. He used
the maternal love of Mrs. Pearson,
daughter Of Samuel Hale and the wife of
John r. Pearson, as lever to further his
Interests. He argued that the gories of the
old house of Hale & Co. might be revived,
and in its operations there was a brilliant
future for Mrs. Pearson'S sons. The
ambitious hopes thus instilled in the lady's
mind found cooperation in the minds of
the other feminine members of the family,
and, although Pearson demonstrated, the
house was continued, with Sanford as one
of the partners. He obtained full control
and engaged in foOlhardy enterprises,
which would have ended in ruin but for the
private fortunes of Hale and Pearson.
Then came The stroke OF the Yankees life.
HIS FIRST GRAND COUP.
After the revolution the Provincial Gov
ernment found it necessary to consolidate
the debt. In order to accomplish this pur-
pose the outstanding loans had to be taken
up. including the popular loan," held by
Hale & Co. The real ability which Sanford
possessed now became apparent. He in
trigued with the Government in behalf of
the "po uar loan" and il is current here
thoe AO SNhoiOAAOu Col ldlu OulfIdlSs 6Ulu
anu paper were now at par. The lean was
taken up by the Government in paper, and
the safes OF Hale IL Co. were cleared OF the
certificates which had cost the titIn many
anxious moments and sleepless nights.
Tie European loaus were repaid IN gold,
and the profit which ensued, solely by reason
of good luck and the parity Of gold aud
paper, turned in prO1t of upward Of
S1,000,000.
Shortly after Sanford went to London.
where he besieged Lord RevelstGke, the
head of the firm Of Barring Bros. Sanford
talked to Revelstoke about the exsraordi-
nary resources of the Argentine and the un-
bounded prospects of the country. When
Sanford departed from London, carrying
with him the confidence and admiration OF
Lord Revelstoke and with the millions of
the Barring Bros Bank behind him to spend
and invest. universe Of chances was re-
vealed to his triumphant vision. The corre-
spOndent relates in detail the story of the
investment of tue Barings' gold by Sanford.
BRIBED THE OFFICIALS
First, he was Obliged to subsidize the
Government officIa to obtain Il great water
works contract. The estimated cost Of the
entire works, on which interest was to be
allowed, was $50, 500. 900 gold. The price of
the concession 10 Barring Bros, through
hale 81 Co., was S21, 600, 900 gold, payable 10
the Minister Of Finance in three Install
mentS This was the public price, but
nothing was conceded from the Government
in Argentine without price. The officials,
from the President down to the janitors of
public officers, expect a consideration, and
greater coup was never accomplished in
this capital, where bribery, corruption and
fraud thrive as they rarely do elsewhere.
In order TO secure the great contract Sanford
was compelled to bid high, and the success
he attained placed him on pinnacle toward
the apex of which less fortunate operators
gazed with eyes fraught with admiration.
HOW MUCH THEY RECEIVED.
Juarez Celman was the Chief Executive
Of the Argentine Republic. He received
upward of $5O0,OOO for his fee in granting
the concession. An additional sum of
100000 was also paid to the President, if
the statements of some responsible men are
accurate Minister of the Interior Wild re-
ceived 100000 for his share. 1t proved a
difficult task for the correspondent to trace
the entire disposition of the Barring corrup-
ton fund but the belief is current that
nearly $3,0O0.0Oo was spent in preliminary
work. Sanford is popularity credited with
securing personal commissions which put
him high above tha water. The Govern
ment's liability to the Blring Brothers on
this single enterprise is nearly $39,000,000
Their losses from this water-workS invest
ment will not be as great, proper
tionately, as in the purchase of bonds
and other money securities. There are
extensive investments Of their money here
which no one outside of the confidential
circles of the firms employees and those of
their agents can describe. Notwithstand-
ing the difficulties met with, the corre-
spondent learned that amounts ranging
from S5,000.0O0 to twice or three times that
amount was obtained by the various prov
inces for internal Improvements" One
of these loans to Cordoba, correspondent
says, is larger than the entire province is
worth. The Barngs also have large in
vestments in railroad bonds. but these will
yield fair returns in time.