The Indianapolis journal., 1895-07-01
THAT GOLD CONTRACT
NO PRETENsE THAT 1T HAS BEEN OR
Is TO DE CARRIED OUT.
We Got from Europe Less than HAN
Export Hence Was stopped.
New York World.


day that the plain letter of the contract
by which the Belmont Morgan bond syn
dicate reaped a profit of abut sl2,OoO.00o had
been violated was met with denial by the
acting head of the Treasury Department
at Washington. Assistant Treasurer Ham
lin said: There has been no modification
of the contract. The provision that one
half of the gold for the total amount or
the loan shall be brought from abroad Is to
be carried out" :
There is no longer any pretense that the
contract has been or is to be literally car
ried out. 1t has been radically modined
for the profit of the syndicate.
When the contract was made 1t was for
the placing of 3,5O0,000 ounces OF gold in
the Uniteu States Treasury. AT first the
receiving clerks began weighing the gold
as it was handed in at the assay office
This was promptly checked. as it never was
the intention of the syndicate actually TO
put In that weight in gold. The right was
claimed tc put in American coin Of
full weight If above the limit of tolerance.
This meant a possible concession of 1850
ounces, over S350,O0O worth of coin, If
payment were made in coin at the limit OF
tolerance.
Then the designation of banks as coin
repositories practically put the of mil
lions of government money at the dis
posal OF favored national banks for many
months The American contribution of the
gold purchased by the government was
promptly paid in, and dollar for dollar the
bonds were passed out and interest on
Less than half the foreign gold SUBJ
scribed for the bonds was actually inn
ported. Instead. the Belmont-Morgan syn
dicate set out to prevent exports or gold in
the ordinary trade channels. When the
price of exchange ran up close to the gold
export point, or even above it. the Amer
iacf nod cr.or. n frc
on their foreign correspondents The high
er- the rates exacted the better for the
writer's OF the exchange, and 1T was gen.
orally understood that any export of coin
In preference to taking the offered paper
would make matters very unpleasant for
the exporters.
AS most of the banking houses that profit
by gold shipments were interested in the
bond-syndicate profits, and none was cour-
mont -Rothschild operations, even if they
could do SO profitably, there was prac-
tical union Of all the finacial giants to
prevent gold exports. The government had
made the syndicate absolute master of the
exchange market.
For the bonds which were sold on the
other side, gold was paid by those who
took them after the bidding there at 49,
The original plan was to have that gold
keep the.yellow metal in the vaults of the
Rothschild and Morgan houses in Europe
ana gather up the coin for the American
treasury from American banks. This it
1t is now admitted by the partners in tile
syndicate operation that the original plan
is added that Secretary we Carlisle is highly high y
The bond syndicates absolute mastery of
the foreign exchange market is conceded
ana 1t is equally plain that if the bankers
nave 1t in their power to prevent gold
exports absolutely when it is profitable to
90 SO the enormous exports of gold prior to
enced by their operations and interests At
all events the practical results are these:
The bond syndicate received $50. 100000 in
which are selling in the open market for
about l22 They and their associates have
have not yet brought one-half Of the
s65, ,oCo geo from abroad. as was intended they
gold from the United States.
Wall street is unanimous in its admiration
OF the bond-syndicate genius..Mr. Morgan.
every outlook was blue and the whole busi-
ness world. and particularly the speculative
The sentimentaF effect of the gold drain
age was immense, and, with the stoppage
OF f,,,;h that a boom % set in which has meant
in the bettered business outlook the country
over. That is the argument which was used
at a rate entirely at variance with the
credit OF the country and which is now used
TO explain away all notifications to which
the contract has been subjected.
In a. formal statement made yesterday,
one who was in the councils Of the syndi-
cate from the start and who speaks with
inside authority, said:
There has been mystery in the trans
action, nor any need for any, and there has
been no misunderstanding about ii among
weil-fnformed men in this city. OF course,
| If some men insist on making a mystery of
prevented from doing SO. The matter. how
ever. is very simple. The government has
| received payment in full in gold for all the
bonds three months before the syndicate
could have been compelled under its con-
| tract to pay in the gold, and as result the
treasury reserve stands at the close of the
financial year at more than $107, 900 900. True
the syndicate has apparently paid for
| $l5, coo of the European half Of the bonds
| (S32,e0O,C0O with gold that was not specially
imported by them for the purpose as re-
auired by the contract, but the government
acting through their representative, accept
| is to be presumed they thought they acted
| for the best interests of the country. And
who shall say to the contrary?
Since the contract was entered into with
the syndicate not dollar of gold has been
| exported, although il is we'll known that
but for the great skill shown by the man.
ayers of the syndicate in what is termed
haute finance, many millions of dollars
| worth of gold would have been exported.
''The contract with the syndicate IS still
| in force and that they will fulfil Il like
honorable men is not to be doubted for a
moment Whether that fulfilment will re-
| quire the importation of more gold cannot
| be foretold. but apparently not"
|
After Years.