The times. [volume] (Richmond, Va.) 1890-1903, 1895-11-01

Millions Made by Members oil '"e """"
.,,..,. carried Out Their S"n''"'''

carried out Their Contrhc''
-. ,.cptx oct. a.-The great goia
- mich undertook to preserve
- ,.'....ri,,, of the Treasury oil inc
VI 49, mas dissolved. and the prof.
~ .n't 49, been divided By Messis. -
10 no n 10 The greatest cdlc na
; ~, 90. az ,oised to prevent ppDiici'y, on"
!, il ditticult to obtain All OF u" 40
zach O., the tWenty-seNeh pd,, -
links participating in the - h",.' ,,ra
s,,st a check representing It's sualo
80 me profits with a note OF eNPld"" -,
and a statement OF the tlaISdS .l', 80
perfect secrecy has been piese.N 49, - ,,s,,
INC the allotment Of bonhs' anu ho ~. ~.
Der Of the syndicate hhoN9 """'
II viii be remembered that during the
d.srlf rate emergency that confronted tne
Treasury last spring, Messrs. NOrsaii anu
Belmont entered into contract with sec
rafarv Carlisle under which they asIeeu
TO furnish the government 5,sVlVVV ouI',
OF gold. and as much more as might pe
necessary al the rate OF Sl.p Il f'I
ounce, taking ia payment therefor per
cent thirty-year bonds to the amount
OF So So. so. AS the government price TOT
gold Is $3.50 - per ounce, the dliiefsncS
OF " cents amounted 10 N,i3Nw' WiiI.n
was a premium PAD 10y me s!IlniCa,o
Tor the bonds. so that the total proceeds
OF the loan 10 the government were S"'-
1880.
Ia other words the syndicate purchased
bonds 10 that amount at the rate OF
slOt - although the price OF the same Sc
ourities in the open market al that tlne
was about Sli9. and a similar amount
might have been sold 20 the pubic az
that rate II they had been offered by the
Treasury. Rut this sacrifice was maze
by the President. and the bonds were iur-
nishcd 10 the syndicate at price nearly
Il per cent. below the market rate as a
consideration for their SERVICES In manip-
Won -
export of gold ana protect the treasury.
n was "a very costly piece - nilancleilhs'
but WAS successful. ana Ne coin which
these bankers deposited I'm the Treasury
remains there still. They have performed
their part Of the contract faithfully. and
are entitled 10 the enormous profits they
enjoyed. They would have eXacted 2 SINH
lar percentage IL they had undertaken .
similar duty IN ordinary business transac-
tio1s with corporations or private individ-
lals.
ovrY sl5.77O.001 or GoLD I,'pofrrD.
Under the terms OF their contract the
bankers were required 40 import at least
Cne-half 81 tho . 5N .01 ounces of gold
from Europe. Jhcy thclcupOn invited
the cooperation OF nearly an the large
banking houses Zoe New York which have
fOunef tons abroad and number OF pure
- American bankers. who asreed 20 take
such share If the bonds as might be
allotted 10 them The former agreed 70
uIF tnr gold required for payment IN for
gs ,6o so Taf s Ia ,Fo were T allowed to
matter Of fact however only Sl5.75OO0
IN gold was actually imported and that
c.'me through the Rothschilis from the
Bank OF England. II is q significant fact
mat eAchange was stimulated 10 such a
degree tlal 10 vas not necessary 20 COM
ply with TIE conditions of the contract.
Inc syndicate OF eWenty-seven banks
and bankers. watch was organized By
Messrs Morgan and Belmont. applied for
tne nondS with such eacerness that II
was impossible 20 meet their demands.
ana an allotment was made by those gen
tlemel 10 such an IMPARTIAL manner that
no complaints have been heard ai'houcn
the actual amount received by the several
institutions is not known even 10 their
associates
As has been stated. the bonds amount
Ing in value 10 Sf5.1l7.50). We're purchased
from TIE Government az SlOf.is. or pre-
mlur1 or 81 n above par. They were sold
| 90 the syndicate al SIPS. an advance Of
S1.U on each bond of 500. At mat rate
rhcv yielded Mcssrs. Morgan and Belmont
sfg.oeO75. or a profit Of SiHl,j15. This
proit. however. was not retained by those
gentlemen. They simply retained three
fOurfhs Of ] per cent. as commission .vi
their trouble. or the sum OF $he,oi-' anu
divided the remainder which amounted
10 S43H.f2S. among iheir associates III
the syndicate. which is equal 10 prom.
! Of Ge72 per cent They also received -
per cent interest which accrued upon 1ilS
bonds before they were tnaly dlslIl Duee W.
THAT makes q total profit OF 81 per cei. T..
uron every dollar they furnished. As
their money was tied up for anout sie
months. the transaction netted them at
the rate OF 1851 per cent per yeal. ..,,
II was this amount, ma hels f', 49,, -
| that lleesrs Morgan x co. dlstfloulen
among The members Of the syndicate we
,fh4r dav The principal houses Nafuci-
mating were J. b. Morgan Co. Belmont
Il CO.,. Morton. Bliss * CO.. kuhn' LOO O.
IcNelheimcr & Co, and the chase. tlrsl e
Fourth. Hanover, city. Commerce anu
Gallatln national banks.
rpor r rOrrrrr ~ SALE OF BONDS.
But the members OF the syndicate, II
they were $50 disposed, were enabled 10
double their profits hy selling the BONDS
/ thus acquired, and many OF them nave
already done 500. There Is always an az
tiV. demand for government securities,
and the market rate 90 the present writ
! ing for this issue is flZ-. Iney secured
| thcir bonds at Slpiin, with the commits
sion Of Messrs Morgan and Belmont,
which was three-l0urths OF Z per cent.
added. or sl0lZ3 gross; and have sold them
or may sell them at siZ.. an advance or
| SifIl on each bond Of 500. so that, as
sIning that ali Of the bonds are sofa,
| the total profits enjoyed by the members
/
| ylded among tWenty-seFen participants,
| gives an average OF about $4,000 20 eacn.
But the bonds are not evenly appor-
toned. While the facts are not known
outside the immediate circle IN which the
managers move. fl IS generally under
stood that j. r. Morgan & CO., and Bel
mot a. Co, reserved for themselves about
one-half or &0C00O0 OF the total. III
this Is true. their reward amounts 10
something Ike 100000
II should be said. however. that the
manasement of this deal required the very
I highest finacial ability. and the skill ana
sagaCity with which Mr.. Morgan and Mr.
Belmont have controlled foreign exchange
has commanded the admiration of bank
Crs on both sides OF the Atlantic. IL is
also due TO the members Of the syndl-
, cate, which included nearly every foreicu
exchange house In the United states. 10
say that they adhered Loyalty 10 their
agreement not % shin specie. even though
exchange rates advanced 10 the highest
quotations on record. and successfully
! prott cted the government gold reserve
IL Is The opinion of bankers. however
that the government might have made p
similar trade for per cent. bonds AT NJ.
instead or { per cent. bonds at l04 4S n
/ Congress had been willing 10 give inc
authority. Washington Post.