The Wichita daily eagle. [volume] (Wichita, Kan.) 1890-1906, 1895-07-03
calculated upon in shipping gold at the

| calculated upon in shipping gold at the
then ruling rates.
After selling bills at the highest prices
to a very large amount the syndicate
| began to place in Europe first class
securities, such as New York Central
stock, very desirable railroad mortg-
/ ages, New oYrk city and other securit-
| les, and then they drew against them.
j which resulted in decline in sterling
| exchange early in May to S4S61z for
sixty day and s4.S71a for sight. At the
same time there was good demand in
Europe for other American securities.
and some of the large bankers drew
| exchange against stocks and bonds
which they had placed abroad. Thus
| the syndicate was enabled to cover
| the bills which they had sold 1T high
prices and at the same time to con-
tinue to import gold as merchandise in
p yment for the bonds under their con-
tract. When they had covered their
exchange the market for sterling grad
uaIly advanced, and before the end of
May it was up to 81 SO for long and $3.50
for short, and it is now 1857 for sixty
day and s4.90k for sight.
MANIPULATION OF MONEY.
After the sale of. the American half
of the bonds to subscribers, large part
of the proceeds. accruing after the de-
livery of the bonds on March 1, was
kept out of circulation, resulting in
an abnormal advance in the rates for
money on call to 3GI31s per cent. This,
to some extent affected exchange by
enabling bankers generally to draw
bills in anticipation of covering later
on, and the proceeds of these bills were
loaned in the money market at fair
rates
The desired object was soon accom-
plished. and eraly IN May the syndi-
cate began the distribution of 40 per
cent. amounting to about s12, 0O0. 900. of
these legal tenders among the 'partici-
pating" banks, thus directly easing the
money market Then followed call
ing of the gold due from those of the
subscribers for the bonds who had not
deposited the full amount of the metal
at the time. and this and the transfer
og so, 449, 1920 June z, and of the &c.
$50, 1872 81 on June q, had more or less in
f7uence on the bank reserve, but the
rates for money were not affected.
This is the question which now ma
turally arises. 1t has until recently
been suspected that the contract would
remain in full force at least until Oc-
tober ], and that as the payments by
the syndicate on foreign account were
much in advance of their requirements,
and they would leisurely proceed to i'm
port the gold necessary for the fulfill
Messrs Belmont nor Morgan Will tell
why they have taken the action they
took yesterday, and as it is presumed
that the treasury officials and the parti-
cipating bankers, and indeed all con-
cerned are indisposed to make any eX-
PLANTATION the public are left to conjec-
ture the motive.
One good guess that can be made is
that the syndicate contract has been
closed so as to leave the way open for
another issue of bonds.
BY referring to the signatures of the
syndicate contract it will be seen that
Mr.. Francis Lynde Stetson is one of the
witnesses. Mr.. Stetson is law partner
of the president and Mr.. StetSon doubt
less was aware of all the circumstances
which led up to the making of the con-
tract and also TO all the unwritten agree
Inents connected Herewith. But Mr..
Stetson won't talk.
THE MOTIVE SUGGESTED.
Now, suppose that Mr.. Morgan dis
covered while he was in Europe that
there was a very great probability that
the S31, 157,7OO bonds which had been
sold to Europeans, and which were re-
Gently delivered. would speedily be re-
turned and also that foreigners who
had bought other American securities
were indisposed longer to hold them,
and that these also would come back
back.
This discovery, if it were made, would
very naturally induce the Rothschild
branch of the syndicate to counsel a
termination of the contract, while It
could be terminated with glory to the
syndicate, with view of being prepar-
ed to take hold of new or a secret I'M
derstanding of the old contract, and
thus keep control of the business of fur
nishing gold to the government.
If this really is the scheme, how beau
tifully it worked. The profits of the
syndicate have been enormous; the
banks and bankers who participated in
the contract have realized. of will re-
alize, a very large amount of money;
the foreign bankers certainly have lost
nothing by their adherence to the agree
ment, and one and all of them will be
only too glad to get into new deal